The healthcare industry defies traditional notions of supply and demand. There’s a lot of demand for quality healthcare services than there is to supply – more patient needs than there are doctors to serve. However, doctors ironically continue to worry about seeing more patients – perhaps, the type of patients with insurance plans that will suitably reimburse for their services. A major source of such paying services is from referring providers who refer patients and also from patients themselves who refer friends and family. Commonly, physician groups and surgery centers tend to see patients as and when they come (or as referred). But if they could analyze the source of where their patients are coming from then they might have deeper insight and therefore greater control over resulting cash flows.
Identifying top referring providers: Use your practice management system (or EHR) to run a report on all referrals during the past year or quarter (any measurable time duration). Examine the report to identify top 5 to 10 sources of referrals that cover 80% or more of your center’s patient volume (broadly applying Pareto’s 80/20 principle). Once you have a list that you can work with, we can develop a Referring Provider Value Plan.
An alternate way is to search your name (if you are a physician) or that of your surgery center using Treatment Tracker and look into the section of referring providers. It lists where your patients went before they came to you and where they go after you see them. This is your list to focus on.
Referring Provider Value Plan: A value plan focused on each organization that refers to you is important to help you give enough value for them so that they are encouraged to continue referring their patients. It must include the following information below. You would be surprised to get this information from your front desk and billing staff who could be talking to staff on the other side.
1. Basic snapshot of the organization’s work, key people (both physicians and staff), decision makers, whom do they engage with in your center, among your staff or those of your vendors.
2. Historical and present information on their patient volume, mix of procedures, their growth, market share (if it’s possible to assess), technology/ software used. Treatment Tracker gives information on Medicare patient volumes, procedure mix and so on – even this would be a good start.
3. Understanding how referring to you improves their patient health and therefore their referrals. What type of feedback do patients provide when they go back to the source? What information that you provide improves their ability to take care of their patients better? How clean and clinically pertinent is your operative note back to them?
4. What are their core needs as an organization? What are their key problems? Create a value chain that goes something like this: Physician Group X > Mainly serves n # of patients with stomach problems > Most of these gastroenterology patients see oncologist Y > m # of their patients work with Lab Z. Understanding this value chain (to the best of your ability) is important because it helps understand the value chain that your practice is a part of.
Your Offering: It may be difficult to think in terms of ‘offering’ being in the healthcare field but it helps to do so to keep your business in check. Identify in both qualitative and quantitative terms how what you do for their patients meets their core needs (from the value plan). For example, qualitatively by seeing the most challenging cases (patients) you are helping their brand perception improve. Quantitatively, you could be contributing to a return visit of say a patient that may contribute to $2,000/ year in collections, you could be contributing to referrals that a patient may bring, you could be contributing to downstream revenue. Can you compute the measure of your offering across a period of time (even broad approximations would help) – say during a quarter or a year? Sending this information periodically will help your referring providers understand and therefore appreciate the value you provide better. For example, by seeing 200 patients who may be contributing $2,000/ year back to the center/ practice, you could be contributing to $400,000 in collections for the center. Is there anything that you use that could benefit them (for e.g. your EHR)?
Seeing what you do as a physician in light of how your customer (in this case, a referring provider seeking your services for his/ her patient) will help you better present your services and therefore increase the likelihood of sustained referrals.