Patient Leakage:

Patient

Leakage:

A new survey highlights

high costs, limited control

EXECUTIVE SUMMARY

Healthcare organizations have many strategic priorities, but the data in this report reveals that one of the places where leaders should focus their attention is on patient referrals and leakage.

Why? Because the respondents revealed that a significant portion of their revenue is being lost to leakage, perhaps unnecessarily.

Additionally, leakage can impact quality care: the majority of respondents reported that they

do not know whether a patient actually follows through with the recommended care.

To gain new insights into leakage, in August 2018, Fibroblast commissioned an independent study conducted by Sage Growth Partners.

– – – – – –

Over 100 executives, most of whom are C-suite executives, responded.

This survey provides new insights into how healthcare executive perceive the problem and how they are addressing it.

Failing to manage leakage has a high cost. Over 40%

say they’re losing 10% or more of annual revenues, 19% are losing over 20% of revenues to

leakage, and 23% don’t know how much they are losing.

There’s a gap between priority and action. Some 87%

of healthcare executives say patient leakage is a high priority,

but 23% don’t track leakage and 20% don’t understand

where and why it occurs.

Using tailored solutions built specifically to analyze and manage

referrals is in its infancy but growing. Only 2% of executives today exclusively use a third-party solution but 19% plan to purchase

one in the next year or two.

EMRs are the default options, but 19% of executives

aren’t satisfied and 57%

are only somewhat satisfied with their EMR’s referral management capabilities.

There are many hands but few owners. The responsibility for tracking

and managing leakage largely resides in the C-suite

but 69% say it is assigned to more than one person.

But 23% of organizations don’t even track leakage.

Key Findings

Executives say that patient leakage is a high priority

• 87% of respondents say that reducing patient leakage is very or extremely important and 12% say it’s moderately important.

How important to your organization is reducing patient leakage?

Does your organization formally track and report on METHODOLOGY AND RESPONDENTS

To learn first-hand what health- care executives are doing to under- stand and manage referrals and to gain insights into how much leakage is costing them, Fibroblast commis- sioned Sage Growth Partners (SGP), a healthcare consulting firm based in Baltimore, MD, to conduct an independent study.

In August 2018, SGP conducted an independent online survey of healthcare executives, with 104 respondents.

Which of the following most closely matches your organization type?

Hospital43%

Health 35%

System Provider Group 11%

(single/multi- specialty, etc.) Other6%

Accountable 6%

Care Organization

Extremely

56%

important

31%

12%

Slightly

2%

important

The composition of respondents was:

• 76% are C-suite executives:

19% CEOs, 16% CFOs, 18% CMOs, 7% CIOs, 4% CMIOs, 4% COOs, 3% CNOs, and 5% other members of the C-suite.

• The remaining respondents include VPs, directors and a variety of other titles.

• 78% work in hospitals or health systems, 11% in provider groups and 6% in ACOs.

Failing to manage referrals has a high cost

Many organizations are losing significant revenues due to leakage.

• 43% are losing more than 10%

of revenues and 19% are losing more than 20% of revenues.

• That doesn’t include the 23% who don’t know or don’t track losses.

less than 1% [1%]

1–10% [35%]

11–20% [24%]

21–30% [9%]

31–40% [10%]

we don’t track that [11%]

I don’t know [12%]

And most say they don’t understand nor manage leakage very well.

• 20% say they don’t understand where and why patient leakage occurs.

• 47% do it only moderately well.

• Only one third claim to manage leakage very or extremely well.

How well does your organization understand where and why patient leakage occurs?

Extremely

4%

well

30%

Moderately

47%

well

Not well

10%

at all

10%

What percent of annual patient revenue do you estimate your organization loses to patient leakage?

Note: Percentages exceed 100% due to rounding

There’s also a clinical and quality cost when referrals aren’t managed.

• Some 60% of organizations don’t know if patients actually received the care for which they were referred.

Does your organization follow up to determine if patients received care from the physician

they were referred to?

40%

Yes

60%

No percentage of revenue lost percentage of respondents

One reason that leakage isn’t better managed is that there are many participants and few owners.

• 69% say more than one person oversees leakage.

• 10% say their CEOs are responsible, 9% say CFOs are, and 8% say CMOs are.

• However, responsibility ranges across a vast array of titles—from office managers to medical group leadership to marketing VPs to the C-suite.

Who oversees referral management at your organization?

There are multiple causes of leakage, most of which are addressable.

Executives believe that a variety of factors cause leakage—from physicians’ personal relationships to patient choice. Most of these can be addressed when physicians and patients receive good data on cost and quality.

What do you believe is the biggest cause of patient leakage at your organization?

38%

32%

15%

12%

3%

Patients choosing care from competitors Physicians referring

to competitors because of personal relationships

Physicians lack understanding of similar/same services in network

Physicians referring to competitors because of better availability

Other More than one

69%

role oversees referral management

Chief Financial

9%

Officer

Chief Information

2%

Officer Chief Executive

10%

Officer

Chief Medical

8%

Officer

Chief Medical

2%

Information Officer

– – – – – – – – –

Satisfaction with the EMR’s ability to manage referrals is limited.

• 19% are not at all satisfied with their EMR’s ability to track leakage and 57% are somewhat satisfied.

• Only 10% are extremely satisfied.

As a result, a number of

organizations plan to purchase a third-party referral management solution.

• 19% plan to purchase a solution in the next year or two.

How satisfied are you with your EMR’s ability to manage referrals?

0% 10% 20% 30% 40% 50% 60%

We do not use our EMR to manage referrals

My EMR can not manage referrals Extremely satisfied Somewhat satisfied Not satisfied

Solutions for tracking leakage aren’t standardized today, but the EMR is the default approach.

• 38% of respondents manage referrals using their EMR.

• 16% use in-house solutions.

• 2% solely outsource to a referral management vendor.

• 34% use a combination of approaches.

Which of the following approaches most closely matches how your organization manages referrals?

In the next one to two years, does your organization plan to purchase a third-party

referral management solution?

19%

Yes

81%

No We use our EMR

to manage referrals We use several

approaches We built our own in-house solution We don’t currently

manage referrals I don’t know

We outsource to a referral management vendor

0% 5% 10% 15% 20% 25% 30% 35% 40%

38%

19%

57%

10%

12%

2%

34%

16%

6%

5%

2%

Conclusion

To survive, today’s healthcare organizations must navigate both the fee-for-service and the value-based world. That means they need to grow revenues while demonstrating better value to payers and taking on more risk. At the same time, as organizations manage larger

networks of physicians and facilities, they stand to lose considerable revenue and control when patients are referred to other networks or to poorer performing providers within their own network.

Fibroblast is a referral management platform that fixes the broken referral process by empowering providers with easy-to-use, end-to-end tools that actively manage referrals. By closing the referral loop, it prevents patient leakage, increasing revenues for fee-for-service organizations and lowering risks for accountable care organizations to deliver a clear, compelling return on investment.

Sage Growth Partners accelerates commercial success for healthcare organizations through a singular focus on growth. The company helps its

https://fibroblast.com/

(800) 396-6463 This survey demonstrates that

the vast majority of executives recognize the importance of referral management, but that their ability to analyze and address patient leakage lags behind.

• 87% of executive surveyed recognize the critical importance of managing patient referrals but 20% don’t know when or why leakage occurs and 47% under- stood it only moderately well.

• 43% of organizations report loss- es of over 10% of their revenues and another 23% admit that they don’t know what they’re losing.

• Executives are using the EMR as the default option but are not highly satisfied with its referral management capabilities. That may be the impetus behind the fact that 19% plan to purchase a third party solution in the next two years.

This gap between executives’

recognition of and ability to solve the problem is costing many organi- zations to lose substantial revenue as well as negatively impact quality and costs. To close the gap, a growing number of executives are looking be- yond their EMRs and in-house solu- tions to third-party referral manage- ment solutions that were specifically designed to analyze referral patterns and guide patients to high-performing providers within their network.