A study of 105 million referrals by the Archives of Internal Medicine found that only about half resulted in a visit to the specialist.[1] This means roughly 50% of the time, patients fail to receive the care they need, and specialists do not capture the revenue they could have.

The reasons for this are several as the referral process is complex. For most practices, determining which specialists work with a patient's insurance and considering patient preferences around location and availability is a manual, time-consuming process. One study showed that less than 50% of adult inpatient care remained within a health system, leading to network leakage[2], while another study found one-third of patients[3] are lost. While some leakage is to be expected due to lack of clinical specialties, location, patient preference, capacity restrictions, or narrow network availability, most of it can be avoided by use of an online, referral system.

The revenue impact of a poorly managed referral system can be quite significant. In a 2015 survey of 140 hospital CFOs, 51% said they were focusing on leakage as an opportunity to generate revenue.[4] For physician networks, the revenue impact is equally noteworthy. For example, a 500-physician network can miss nearly $100 million in annual revenue due to leakage.[5] It is possible that $50 million in referral-related revenue is sent outside the system and another $40 million falls through the cracks as referrals go uncompleted.

However, much of this revenue can be captured by using a cloud-based referral and appointment management system. One study of more than 50,000 referrals, at an urban health system with over 1.2 million annual patient visits, found that a web-based referral system increased referral scheduling by nearly three times and reduced the median time to appointment by more than 50%.[6]

Nearly 80% of the health organization's physicians felt ready for online scheduling, and 75% said the system made it easier to schedule patients. Considering that about 10% of patient visits to a PCP result in a referral[7], and more than 50% of new patients for specialists come directly from physician referrals each year[8], this increase in patient/referral follow-through presents a significant opportunity for practices and healthcare systems to capture more revenue.

Preferral streamlines the referral process for patients, specialists, and their referral partners. By automating the referral process, practices can expect an increase in referral volume and revenue.

[1] Barnett M, Sirui S, Landon B. Trends in Physician Referrals in the United States Arch Intern Med. 2012; 172(2): 163-170. doi:10.1001/archinternmed.2011.722

[2] http://www.mass.gov/ago/docs/healthcare/2011-hcctd.pdf

[3] Hospitals Employing Physicians See Greater Losses. Medical Economics, January 11, 2015. http://medicaleconomics.modernmedicine.com/medical-economics/news/hospitals-employing-physicians-see-greater-losses

[4] apta.org/PTinMotion/2016/6/Feature/ReferralManagement/

[5] Statistics from Annals of Internal Medicine and The Advisory Board

[6] Weiner, Michael, Georges El Hoyek, Lynnette Wang, Paul R. Dexter, Ann D. Zerr, Anthony J. Perkins, Felgrace James, and Rattan

[7] Barnett M, Sirui S, Landon B. Trends in Physician Referrals in the United States Arch Intern Med. 2012; 172(2): 163-170. doi:10.1001/archinternmed.2011.722

[8] Weiner, Michael, Georges El Hovek, Lynette Wang, Paul R. Dexter, Ann D. Zerr, Anthony J. Perkins, Felgrace James, and Rattan Juneia. "A Web-based Generalist-Specialist System to Improve Scheduling of Outpatient Specialty Consultations in an Academic Center." Journal of General Internal Medicine. Springer-Verlag June 2009

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