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Referral Leakage: Definition & Ways to Reduce

Disclaimer: Virgin Pulse and HealthComp are now Personify Health

Did you know that about 25% of physician-made referrals go out of network, which is lost revenue for health systems? In the wake of COVID, many hospital CFOs are focusing on referral leakage as an opportunity to generate revenue, and physician relations teams are feeling the pressure to perform.

Before teams can act, they must understand why and where leakage is occurring, develop action plans and strategies to address the issues, such as improving the referral process, to boost referral relationships and patient satisfaction. They also have to continually evolve by using market data to evaluate what is working and to determine what is the next greatest opportunity for keeping patients in network.  

Our physician referral management team of experts helps health systems across the nation leverage data and business intelligence tools to stay at the forefront of their network. Here are some basics about referral leakage to help your team keep more patients in network.

What is referral leakage?

Patient referral leakage, also commonly called network leakage, occurs when patients leave a hospital’s network and seek care with out-of-network providers.

One of the primary challenges in this field is dealing with physician network leakage, where referrals bypass the intended in-network providers.

Why does network leakage occur?

Network leakage can occur for many reasons. Negative patient experiences, such as a challenging referral process, can impact patient satisfaction and drive patients to seek care elsewhere. Providers can also be a source of network leakage. For example, even the perception that “it’s hard to get an appointment” might drive an in-network provider to send patients elsewhere.

Efforts to reduce network leakage must focus not only on the processes but also on enhancing the overall experience for both patients and providers.

What are the benefits of addressing referral leakage?

Addressing referral leakage delivers benefits for both patients and health systems. Patients who stay within a network experience a more streamlined and personalized experience through a shared clinical record. Health systems benefit by generating patient volumes and associated immediate and downstream revenues by driving higher utilization of services.

An effective strategy to minimize network leakage involves fostering a stronger, more collaborative physician network.

How can physician relations teams identify where leakage is occurring?

The only true way to know where leakage is occurring is by looking beyond a health system’s encounter data and tapping into claims data. With this view of internal and external data, teams can clearly see where patients are out-migrating, and to which providers and systems. A physician relationship management (PRM) tool can give teams the power to not only access this type of data but also to visualize it and build action plans based on what it says.

For example, a PRM can show not only which providers are splitting or referring imaging patients out of network but also insights about why. Innovative physician relations teams utilize these insights to develop targeted action plans to keep more of these valuable patients in network by addressing removable barriers, like a perception that it’s hard to schedule an appointment, with messages outlining the simple steps they can use to book an appointment.

By closely monitoring referral management leakage, teams can pinpoint specific areas for improvement and intervention.

How Personify Health can help you minimize network leakage

Personify Health’s PRM, called Physicianology™, helps health systems of all types simplify the process of accessing and visualizing data, empowering them to develop strategies to minimize referral leakage. Our easy-to-use PRM makes it possible for physician liaisons to stay at the forefront of their network, so their outreach captures more in-network revenue and supports future physician network growth initiatives. Want to learn more? Let’s talk about how we can help you level up your strategies to minimize network leakage too!

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