Referral Management White Paper Abstract
Referrals are a critical moment in a patient’s journey with significant implications for providers, patients, and payers. However, many referrals are not sent “successfully,” i.e. to a provider that meets the patients needs, within the time frame that the patient needs it.
According to a study by The Archives of Internal Medicine, in 2009 105 million patient visits resulted in a specialist referral, but “only about half of referrals result in a completed appointment.” Our analysis shows that less than 25% of referrals are completed as intended by the sending provider. While all hospitals focus on high quality care, relatively few tie this to excellence in referral management.
For providers, referrals represent a unique inflection point where the next step in care is driven not only by clinical goals, but also by plan design and the resources available within the provider’s organization. Providers can also use referrals to connect to a broader network across multiple electronic medical record systems (EMRs).
For patients, a referral is an important moment that reflects a change in diagnosis or an escalation in care. Today, many patients experience the burden of navigating the next step on their own, often without understanding whether suggested providers accept their insurance or can see them when needed.
After seven years in referral management and having processed over 1.5 million referrals for over 850,000 patients, our core belief stands: While technology is a necessary prerequisite to successful referral management, the implementation process and the people involved in creating organizational change are equally as important.
Payers know that each primary care provider (PCP) determines, on average, $10 million in annual revenue, of which only 5% is attributed to primary care spending -- the remaining 95% is attributed to downstream care including specialty referrals, imaging and other medical testing, invasive procedures, and hospitalizations2. Payers are motivated to ensure that patients receive the highest-quality, lowest-cost care that meets the patient’s clinical needs.
In order to have successful referrals, payers understand that it matters where you refer, how you refer, and whether the process is simple and scalable.
The purpose of this paper is to present the five components of successful referral management, gathered over seven years and over one million referrals across a range of providers, payers, and self-insured employers. We have found that while technology is a necessary prerequisite to success in referral management, it is not sufficient by itself. The process of implementing referrals within existing workflows and the people involved in creating organizational change are just as important as the selected referral platform.
These five components are: