By Michele Caravan
Patient Referral Leakage (also referred to as network leakage or referral leakage) happens when a patient leaves a hospital’s network in favor of out-of-pocket network providers. This tends to happen for a few reasons, including lack of provider expertise and ineffective retention initiatives.
Referrals are made to provide better care to patients while avoiding medical complications. Physicians (or PCPs) won’t make a referral to an outside specialist unless it’s necessary. Sometimes referral leakage is unavoidable. For example, when a patient needs medical care that is unavailable in their network, a healthcare provider needs to understand what the patient needs in order to have the best health care. Generally, these outside referrals are due to a lack of equipment or they don’t have the right facility to perform a certain procedure or test and sometimes it’s at the request of the patient to go outside of the network.
When it comes to referrals, 55-65% are being sent to out-of-network providers. This occurs because typically, providers, referring physicians and call centers lack information about the specialists to which they are referring patients to. This lack of information can add up, costing upwards of $821,000-$971,000 per physician. However, one in four healthcare systems don’t know or even track how much revenue they are losing on referral leakage. It is estimated that the average hospital loses 10-30% of their revenue to patient leakage. These costs can skyrocket over time as physicians lose chances to coordinate care for patients within their network.
When trying to identify ways to reduce referral leakage the following can help…
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