Featured in Healthcare Business Today, February 2020
By: Dereck Tatman, AristaMD Chief Operating Officer
Patients are the lifeblood of any thriving health care network. Through effective referral management, these networks can dramatically enhance vital patient retention, which is key to the success of both fee-for-service (FFS) and value-based health care organizations.
Attracting new patients is always beneficial; however, this tends to be resource-intensive. Existing patients typically account for the majority of appointments, making retention a key metric to monitor closely and integrate into organizational goals. When a patient seeks services outside of their established health care network, the network undergoes what is commonly known as “patient leakage,” a generally undesirable result for health systems, patients and payors. In addition to clear loss of retained patient revenue, this causes difficulties in care coordination laddering up to implications within quality goals for both FFS and value-based organizations. Patient leakage is especially undesirable for Accountable Care Organizations (ACO), as these providers still bear the responsibility, financially speaking, for these patients’ outcomes. Patients may pay more out of pocket expenses for out-of-network care, which in turn may negatively impact appropriate follow-up care, outcomes and satisfaction. This begs the following question: how can a healthcare network better approach referral management in a manner that benefits all healthcare stakeholders?
Most patient leakage occurs in the form of referral leakage, where patients in need of specialty care are referred out of network. Referral leakage occurs due to factors including referral habits and behavior of treating providers, patient preference based on reputation or recommendation, as well as appointment availability and timing. In some cases, referral leakage is unavoidable. The quality of care that patients receive must always be the top priority, and some networks simply lack resources in particular specialty areas. Even so, health systems are increasingly recognizing patient retention as a metric to focus on for improvement and are angling toward innovative referral management solutions as a means of reducing leakage.
In this article we will discuss why health systems are prioritizing improved patient retention through referral management as a key strategy, as well as how an eConsult platform can support these goals for FFS and value-based health systems.
Improving referral management as a means of reducing patient leakage
Health systems should prioritize efforts around referral management and leakage to enhance revenue under FFS contracts and to continually improve performance for risk-based arrangements (such as HMO, ACO, PPO shared savings, etc.). According to 2018 survey data, 43% of healthcare organizations are losing more than 10% of revenue and 19% are losing more than 20% of revenue as a result of patient leakage. This has significant implications for FFS providers in particular. Meanwhile, an estimated 60% of organizations do not know if patients received care for which they were referred, a worry for any healthcare provider, but particularly for those under risk-based arrangements.
For both FFS and risk-based arrangements, enhancing network retention helps improve quality gap closure as well as documentation and reporting of those closed gaps. When provider systems lose track of the coordination of care for patients, primary care providers are unable to monitor and manage patient progress along the recommended care plan, or make changes depending on how a patient’s treatment progresses. One solution to overcoming challenges in coordination associated with specialty referrals is to increase the breadth of capabilities maintained within primary care, which is in line with Patient Centered Medical Home (PCMH) principles, the ability of PCPs to manage more within their practice and reduce the need for face-to-face specialist appointments. This approach, which reduces care fragmentation and in turn lowers the cost of healthcare, improves quality outcomes and decreases rates of hospitalization. Overall, more integrated care can help patients receive more timely care, avoid costly complications and produce better outcomes.
For health systems overall, retaining patients in the system for specialty care and related services can be better achieved by adopting an eConsult platform, which will both increase revenue for FFS arrangements and improve performance under value-based care arrangements.
eConsults show promise for both FFS and value-based arrangements
For both FFS and value-based healthcare models, eConsults provide two major benefits. First, eConsults expand access to timely specialty care support, enabling primary care physicians to manage a larger portion of patients without needing to schedule a face-to-face specialist referral. This is primarily because more than 70% of eConsults eliminate the need for a face-to-face specialist visits entirely by giving PCPs the ability to consult with specialists remotely and provide near-immediate care. Under the current status quo, only 54% of referrals lead to completed specialist appointments, many of which are out-of-network. eConsults can increase both specialty care support for the ~46% of patients forgoing care, as well as the likelihood of completed referrals being supported by in-network specialists. Further, this empowers PCPs to initiate, monitor and manage specialty treatment regimens, thus retaining patients for follow-up care in a more ideal, in-network setting, all of which build network loyalty.
As a second benefit to FFS and value-based models, for those patients that require face-to-face specialist consultations, eConsults increase the utilization of in-network system specialists, helping avoid leaking patients outside of the system. According to Health Care Dive, almost half of doctors noted that they struggle to determine what specialists are in-network. Improved information regarding in-network specialists could help avoid a third of out-of-network referrals, the doctors estimated. This improves health system/in-network specialist FFS revenue reimbursement and, under value-based arrangements, reduces overall costs.
A Kaiser Family Foundation report found that nearly 18% of inpatient admissions by enrollees in large employer health plans include a claim from an out-of-network provider. Out-of-network care drives up costs for both payors and patients. Additionally, 7.7% of outpatient service days include a claim from an out-of-network provider. All too often, these rising out-of-pocket costs are causing Americans to delay healthcare. A recent Bankrate survey found 22% of surveyed patients said they or a close family member delayed necessary medical care because of the cost, and 77% said cost led to care avoidance.
In sum, eConsults reduce the need for face-to-face specialist consults while improving timeliness and access to specialist support of care. If a face-to-face appointment is needed, eConsults can help steer referrals to an in-network provider, thereby reducing cost and improving communication and quality of care.
The impact of eConsults in supporting providers through health system referral retention
As a further benefit, health system retention from eConsults helps health care providers more effectively implement, monitor and manage care. For instance, eConsults allow PCPs to develop a rapport with in-network specialists and other in-network care providers, as they provide more structure around common referral communication challenges and remove ambiguity from request and recommended course of action. Furthermore, eConsults provide structured templates for common referral questions, thus ensuring specialists have the necessary information to provide direction and prevent delays in care. This increases productivity, as PCPs can access specialist input and navigate the healthcare landscape more efficaciously for the patient.
As well, PCPs and organizations are measured on patient outcomes by various process measures and utilization metrics such as cost performance and quality – thus, it is imperative to accurately document attainment of goals and completion of metrics. When patients receive care from out-of-network providers or facilities, documentation and/or completion of metrics can suffer inaccuracies, leading to poorer outcome metric reporting and, as a result, decreased primary care provider compensation. eConsults, on the other hand, support better documentation in PCP’s EHRs, thereby resulting in better quality performance metric reporting and related incentive compensation.
Finally, and rather simply, many healthcare providers – as many as 42% – feel they are not practicing at the top of their license either most or all of the time. This negatively impacts physician satisfaction and has adverse financial consequences for providers and health systems. eConsults help both PCPs and specialists to work at top of license by supporting PCPs to more effectively manage low-acuity patients within primary care while having improved access to specialist care for appropriate face-to-face consultation. Moreover, eConsults improve FFS revenue stream through delivering higher-billing patient appointments to specialists. Overall, while eConsults serve to address referral issues and combat patient leakage, greatly benefiting patients and health systems, they also represent a clear benefit to providers, a key component within effective referral management and retention.
While attracting new patients is a worthy pursuit for just about any health care organization, this often fails to address root problems and inefficiencies that cause patient shortages in the first place. In particular, patient leakage – and especially referral leakage – results in substantial losses for many organizations, with some losing as much as 10-20% or more of revenue as a result. While sometimes unavoidable, referral leakage can be triaged with intelligent allocation of effort and resources. eConsults represent one such resource that is especially effective at combatting referral leakage, helping providers to retain patients by connecting them with specialists to gain necessary insights directly, rather than referring their patient out of network. This makes for a better health care delivery experience for all parties involved, helping health care systems use resources more efficiently and, in turn, achieving higher levels of care quality for patients.