Specialty Referrals 101: Who’s Who?

The world of specialty referrals has several different players involved in the process. Each of the various stakeholders have unique interests and concerns. Here is a quick look at each of them.

First, what is meant by referral?
At the most basic level, a referral is when a patient sees a doctor for a health issue and is recommended (i.e. referred) to a specialist for further consultation and care. 

Patient – The patient experiences a health concern and needs care to get it resolved. The primary physician doesn’t provide the full solution and refers them to a specialist with more expertise about the patient’s condition. This is where the referral occurs. Currently, the extent of the referral is the physician handing a phone number to the patient to call and schedule the appointment. It’s up to the patient to contact the specialist and follow through with the next step, which explains why 20% of patients never even schedule the referral appointment. When a patient doesn’t get the care they need, they may end up with adverse events that sends them to the ER or an unnecessary hospitalization.

Provider –There is more than one provider involved in the referral process. First is the referring (or sending) provider and then the target (or receiving) provider. The referring physician is the provider recommending (referring) them to a specialist. The target provider is the specialist that has been recommended. For a health system or physician group, there are obvious financial and quality of care benefits associated when a patient is sent to a trusted provider within network. When patients don’t go to their referral appointment, the health system or physician group loses in several ways. First of all, they have lost control over providing comprehensive care to the patient. If a patient gets readmitted to a hospital because of their negligence to follow through on a referral appointment, the health system gets penalized for the readmission. The penalty could result in CMS withholding up to 3% of the funding provided to the health system. The system also suffers in terms of the perception of their quality of care. If the patient doesn’t receive the care they need, it reflects poorly on the healthcare organization. Lastly, if a patient is not secured with a provider within network, they will sometimes go to a competing system. This is called referral leakage or outmigration and has serious financial implications, especially considering the lifetime value of a patient.

Plan – Health plans have several important considerations when a referral happens. The plan has a vested interest in making sure the patient goes to the target provider on three separate fronts:
1) The health plan benefits if the patient goes to a target provider within their network. Not only will patients be directed to providers that best meet their needs, but the plan also benefits when patients are referred to the providers in their Smart Network. These providers are trusted for superior care for the patient and reduced costs for the plan.
2) When a plan member doesn’t get the care they need to maintain good health, their likelihood of having major adverse events rises dramatically. This means they will end up in the ER or needing other expensive care, which represents big costs for the health plan.
3) The current approach to referrals often results in long lead times for referrals, which makes for a poor patient experience.

When seen from the three different perspectives, the stakes in completing referrals raise dramatically, particularly when scaled across a vast Health System or Health Plan.

To learn more about improving the referral process, read our free executive brief, Convenience Drives Change: Fixing Referral Management.