How managing the referral pipeline can impact the value-based model

The impact of managing your referral network is at the core of the Accountable Care Organization (ACO) model. If your organization has an ACO, then the need for referral management technology should be at the top of your list. Why? In order to qualify for shared savings, an ACO must demonstrate that it met the quality performance standard for that year. 

There are 33 quality measures listed under four domains.  Managing your referral network could impact 26 of 33 quality metrics and 3 of 4 domains.  As healthcare models continue to change from fee-for-service or process-of-care measures to outcome-based measures, it is critical to implement a solution to manage the referral process.

Q. How will the move to value-based reimbursement impact the market for IT solutions that enable smooth patient referrals and care transitions? 

A.  If a provider organization accepts risk for an attributed patient population, a central goal is to close gaps in care by providing preventive care that can avert expensive utilization.  Analytic tools are necessary for risk stratification based on chronic or co-morbid conditions and assigning them to cohorts with personalized care plans.  However, analytics without action are static and thus do not directly enable health or reduce financial risk.  Hence, it’s that need for action that makes population health management a verb.  This requires a platform that can easily guide clinically appropriate utilization within the network to high value providers.  This means patient referrals, payment authorizations and appointments need to be smartly coordinated across the network in accordance with evidence-based pathways indicated by the care plan.     

Q.  How can information technology be leveraged to ease the referral of patients from one provider to another?

An ideal system will electronically capture all demand for outpatient services (referrals, orders and transfers) in a common platform, regardless of referring provider EMR or modality such as web, fax or EMR.  Once digitized, clinical appropriateness rules, medical necessity, eligibility, payer/plan network inclusion checks, eligibility, provider network inclusion checks and preference rules (gender, location, specialty/sub-specialty), and insurance prior authorization rules should be satisfied. 

Referring providers and patients should be able to easily understand availability for desired destination providers and conveniently schedule appointments electronically from any device. Analytic tools with advanced search algorithms, such as third-next available appointments, network performance, efficiency, and compliance with goals should be easy to use and show data in real time vs. retrospective data that is months old. 

Q.  What type of financial impact is possible if the referral system is managed by the use of technology?

A.  According to the Journal of General Internal Medicine, on average, 54% of referrals become appointments. Integrated cloud-based referral and patient appointment platforms have been shown to increase referral to appointment conversion rates from 54% to 86%, a 59% performance improvement.  

For example, if a hospital has 100,000 outpatient diagnostic studies per year with an average net revenue of $304 per study, each 1% improvement in conversion of referrals to appointments represents an incremental increase of $304,000.  This means improving referral-to-appointment conversion rates from the industry average 54% to the 86% organizations experience using a referral and appointment platform – an uptick of 32 percentage points -- results in an annual revenue improvement potential of $9.73 million ($304,000 x  32).  

In conclusion, managing your referral workflow can significantly impact revenue, patient satisfaction and physician satisfaction.  Are you finding ways to maximize your referral program with technology? 

About the author: Joel French has more than 25 years of experience in healthcare technology leadership. Prior to joining SCI, Joel founded, led, or provided consulting on behalf of various publicly traded and privately held technology services firms. He has been an active contributor to the growing body of health industry knowledge as a widely published author and speaker.

Interviewer: Claude Blenman has more than 17 years of experience successfully selling a broad range of products and services and is the owner of Quest Biomedical International, Inc.