The Financial Impact of Losing Patient Referrals

Written by Lance Fusacchia, CFO, MyHealthDirect | July 8, 2016

Today’s referral process suffers from an array of challenges that often make it difficult for patients to obtain the care they need. Given that an increasing number of patients are scheduling their appointments on their own, it is no wonder that one-third of patients never follow through on their referral.

From a financial perspective, this lack of patient follow-through has deep ramifications. When patients forgo referrals, provider organizations lose revenue because the missed opportunities translate into problems such as low completion rates (no-shows), lost staff efficiency from time spent coordinating appointments, and a poor patient experience for those who never receive the care they were prescribed. The losses are real, but many healthcare organization executives do not fully recognize them. Senior finance executives therefore have an important role to play in educating executive teams on the financial impact of losing network referrals, or what is sometimes called “outward migration.”

The need for such education is all the more acute because of the growth of value-based care, and the increased financial risk providers are assuming as a consequence. These factors make it all the more important for healthcare organizations to rethink how to streamline physician and patient communication, strengthen patient education, and create visibility for providers to track a patient’s care across the care continuum.

The Cause of Outward Migration
Studies show that approximately 20 to 40 percent of patients who receive referrals never complete them, possibly because they were never scheduled or they became no-shows due to bad appointment timing. Patients also miss referral visits for other reasons, such as when their medical situation resolves itself, a conflict arises, or they disagree with the referral in the first place.

The following factors contribute to low referral completion.

Read the rest of the article on the HFMA site.

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