(And What to Do About It) - HSGhsgadvisors.com/.../content/...Referral-Leakage-1.pdf · 5 Types of...

5 TYPES OF LEAKAGE | 03/23/2017 1HSGadvisors.com

5 Types of Referral Leakage to Measure (And What to Do About It)


HSG Presenters

Travis AnselDIRECTOR

Travis Ansel, Director, brings a strong track record of generating revenue growth and growing market share

for hospitals, health systems, and employed physician networks. His practice focuses on partnering with non-

profit healthcare clients to understand their landscape, their challenges, and work with their key stakeholders

to create proactive, implementable plans that drive success within their organizations. He has extensive

experience in developing and deploying enterprise-level strategy, physician network strategy and manpower

planning, employed physician group strategy and helping hospitals with the evolution toward value-based

reimbursement.

Travis holds a Master’s of Business Administration from Vanderbilt University, Nashville, Tennessee and dual

Bachelor’s of Science Degrees in Finance and Business Management from the University of Tennessee at

Knoxville.

(502) [email protected]

D.J. SullivanSENIOR CONSULTANT /

BUSINESS DEVELOPMENT MANAGER

DJ Sullivan, Senior Consultant, concentrates on the clinical integration, physician strategy, and manpower

development service lines at HSG. He utilizes his prior experience in acute and post-acute healthcare

settings, technical data analysis skills, and process-oriented approach to solving complex problems to

support hospitals and health systems in making confident long-term strategic decisions related to their

physician networks.

Prior to joining HSG, DJ implemented and managed a CMS Model 3 BPCI initiative in Kentucky after

obtaining his Master’s of Business Administration and Master’s of Healthcare Administration degrees from

the University of Utah. He also holds a Bachelor’s of Science degree in pre-medicine from Brigham Young

University.


mailto:[email protected]



Physician Strategy Physician Network Optimization Accountable Care

Physician Alignment Strategy

Strategic Plans with Physician Focus

Employed Group Strategy

Creating Shared Vision

Service Line Strategy

Service Line Co-Management

Physician Manpower Plans

Affiliation Strategy

Network Management & Advisory

Interim Management

Network Performance Improvement

Provider Productivity Systems

Network Revenue Cycle

Physician Compensation Planning

Practice Acquisitions

Fair Market Value Opinions

Executive Recruiting

Referral Capture Improvement

Practice Transformation

ACO Development

ACO Optimization

Clinical Integration Strategy

Direct Contracting

About HSG

Who We AreHSG builds high performing physician networks so health systems can address complex changeswith confidence. From boosting market power and financial strength to preparing for value-based

care, we can help you define your strategy, implement that strategy, and manage your physician

network short or long-term. We guarantee results and deliver the greatest value as a trusted member

of your team.

Our Areas of Expertise


Today’s AgendaMarch 23, 20172:00-3:00 PM EST

Defining LeakageWhat is it and Why Should Hospitals

Care?

5 Types of Referral Leakage:Overview, Deep Dive, and How to

Measure

Utilizing Referral Data: How to Utilize Referral Data to

Diagnose Roadblocks and Build

Strategies

Closing:Wrap Up & Questions


Defining Referral Leakage


What is Leakage?

Employed PCPDr. Example, MD

Family Medicine

Louisville, KY 40205

Our Acute Care Facility

Regional Competitor

When a patient touches one of the providers in our network, does that patient continue

touching our network’s providers and services?

If the patient receives IP or OP services, is that from our acute care facility or a competitor’s?


What Does Leakage Cost a Hospital Network?

Your Employed Family Medicine Practitioner

2015 Median Downstream Revenue (IP and OP) $1.6M $1.6M $1.6M

% of Patient/Referral Leakage 0% 50% 100%

Net Patient Revenue Leaving Health System per Year $0.0M $0.8M $1.6M

Your Employed Primary Care Network (20 FTEs)

2015 Median Downstream Revenue (IP and OP) $32.0M $32.0M $32.0M

% of Patient/Referral Leakage 0% 50% 100%

Net Patient Revenue Leaving Health System per Year $0.0M $16.0M $32.0M

The revenue impact of leakage can be significant, especially when looked at across your

physician network.

1: 2016 Merritt Hawkins Physician Inpatient/Outpatient Revenue Survey


What Does Leakage Cost a Hospital Network?

≈ $250k Net Patient RevenueDr. Example, MD

Family Medicine


Small changes in referral patterns over time can add up to real revenue impact.

1: 2016 Merritt Hawkins Physician Inpatient/Outpatient Revenue Survey


Somethings We Know About Leakage

• Referral Patterns Change, Sometimes Abruptly

• Everyone Is Bad At Estimating Referral Loyalty

• There Is A Portion Of Leakage That Isn’t Controllable, But Its Usually Smaller Than Hospital Executives And Physicians Think

• Physicians/Providers Not Always In Control

• Patient Self-Referral Plays A Role, But Providers Can Influence It


Combating Network Referral Leakage

Measure Manage

• What’s our current state

(benchmark)?

• What are the trends over time?

• What are the critical issues that

my team needs to deal with?

• Are we getting a return on

investments in time and

resources in our network?

• Dig into areas showing issues

• Define opportunities for

improvement

• Work with providers to define

root cause

• Build a plan and execute

There are no silver bullets to fixing referral leakage.

&

Goal: Create a repeatable system or a program that keeps your organization

focused on incremental improvement


Gaps In Referral Capture Measurementfor Hospitals and Health Systems

Electronic Medical Records

3rd Party Data Platforms• Data analysis burden falls to the health system

• Do not provide measurement over time – focused on opportunity at a point in time

• Data usually stays data – doesn’t evolve to strategic insights

• Tends to not drive executive action

• Limited data sets that only capture YOUR employed network’s referral activity

• Reliant upon common platforms and common usage across practices

• Platforms not focused on mining referral capture data, making strategic reporting

a challenge

Anecdotal Observations

• What we “feel” is happening

• What our providers tell us

• Incomplete data sets & Lack of Strategic Conclusions to Drive Action


5 Types of Referral Leakage(And What To Do About It)


HSG Physician Network Intelligence

Our cloud-based platform delivers the optimal data set for physician referral analysis

All visuals in today’s presentation from HSG Physician Network Intelligence.

http://hsgadvisors.com/physician-network-intelligence/



Employed PCP

1a) Individual Provider : Acute Care Leakage

Dr. Example, MD

Family Medicine


Physician Referral Flow visualizes the referral flow from source physician to acute-care setting.

• Dr. Example is loyal to our Acute Care Facility (75%) but still

has fairly significant leakage and shares 25% of his/her

shared visits with a regional competitor.

• Based on median downstream for family practice the

uncaptured referral streams from Dr. Example represent an

opportunity of $373,380 to our facility.

Acute Care Facility Shared Visits % of Total

Our Acute Care Facility 2,140 75%

Regional Competitor 697 25%

Total 2,837 100%


Regional Competitor


Independent PCP

1b) Individual Provider : Acute Care Leakage

Dr. Example, MD

Family Medicine



• Dr. Example is a significant splitter and shares 47% of his/her

shared visits with our Acute Care Facility while having

significant leakage and sharing the remaining 53% with four

separate regional competitors.

• Downstream Revenue Opportunity Estimate: $791,565

• Downstream Revenue Threat Estimate: $701,953



Regional Competitor #1 1,157 27%

Regional Competitor #2 714 17%

Other Acute Care Facilities 374 9%

Total 4,208 100%


Regional Competitor #1


Other Acute Care Providers


Employed

Cardiologist

1c) Individual Provider : Acute Care Leakage

Dr. Example, MD

Cardiovascular Disease



• Dr. Example is loyal to our Acute Care Facility (80%) but still

has fairly significant leakage and shares 20% of his/her

shared visits with a regional competitor.

• Based on median downstream for cardiovascular disease the

uncaptured referral streams from Dr. Example represent an

opportunity of $489,627 to our facility.



Regional Competitor 354 20%

Total 1,734 100%


Regional Competitor


Independent

Orthopedic Provider

1d) Individual Provider : Acute Care Leakage

Dr. Example, MD

Orthopedic Surgery



• Dr. Example is somewhat loyal and shares 62% of his/her

visits with our Acute Care Facility while still having fairly

significant leakage and sharing the remaining 38% with two

other regional competitors.

• Downstream Revenue Opportunity Estimate: $1,043,710

• Downstream Revenue Threat Estimate: $1,702,895


Our Acute Care Facility 437 62%



Total 706 100%





Individual Provider Acute Care LeakageWhat To Do

• Benchmark everyone

• There will be surprises

• Pick the low hanging fruit

• Don’t just deal with the problems


2) Employed Network : Acute Care Leakage

Employed Provider Network

50 FTEs


Regional Competitor

Other Acute Care Providers

70.0%

27.7%

2.3%

Referral CapturePercentage

2016 Median Downstream Revenue (IP and OP) per Physician $1.56 M

Average Employed Network Size (Number of Physicians) 50

% of Patient/Referral Leakage 30%

Net Patient Revenue Leaving Health System per Year $23.4 M


Employed Network Specific Acute Care LeakageWhat To Do

• Look for trends across practices and specialties

• Engage (or create and engage) your employed network’s governance or advisory council

• Make referral capture a “dashboard” metric

• Create general awareness of referral tracking in your network


3) Independent Network : Acute Care Leakage


Regional Competitor

Independent Providers

Regional Competitor

Other Acute Care Provider

58.4%

21.7%

18.8%

Referral CapturePercentage

2016 Median Downstream Revenue (IP and OP) per Physician $1.56 M

Average Independent Network Size (Number of Physicians) 50


Downstream Revenue Opportunity Estimate $61.1 M

Downstream Revenue Threat Estimate $16.9 M

.1%


Indep. Network Specific Acute Care LeakageWhat To Do

• Look for trends across practices and specialties

• Evaluate alignment opportunities

• Engage providers about their data – “why”

• Evaluate your risk – what if patterns change?


4) Employed Primary Care to Specialist Leakage

Employed

Primary Care

ORS


Regional Competitor

Regional Competitor

• What percentage of employed primary care provider referrals are being sent to closely aligned (employed or independent) specialty care providers?

• What percentage of those referrals are ending up at our acute care facility?

ORS

ORS

ORS (Closely Aligned)

ORS

Other Acute Care Facility



ORS (Splitter)


Employed Primary Care to Specialist LeakageWhat To Do

• Also a great discussion for your governance or advisory council

• Engage the specialty groups, show them the data

• Evaluate alignment opportunities


5) Indep. Primary Care to Specialist Leakage

Independent

Primary Care

CD


Regional Competitor

Regional Competitor

• What percentage of independent primary care provider referrals are being sent to closely aligned (employed or independent) or high volume splitter specialty care providers?

• What percentage of those referrals are ending up at our acute care facility?

CD(Splitter - High Volume)

Other Acute Care Facilities

Other Acute Care Facilities

CD(Splitter - High Volume)

CD

CD

CD

CD

CD


Indep. Primary Care to Specialist LeakageWhat To Do

• Evaluate risk of indep. groups switching loyalties

• Think about alignment – both the specialty group AND their referral base

• Evaluate your employed specialists reliance on non-employed primary care


6) Service Line Leakage

Highly Productive Splitter

Productive

Competitor

Productive Loyalist

2016 Median Downstream Revenue (IP and OP) per Internal Medicine

(Non-Specialty) Physician$1.83 M

Number of Internal Medicine Service Line Physicians 23


Downstream Revenue Opportunity Estimate $26.1 M

Downstream Revenue Threat Estimate $16.0 M

Specialty Flow visualizes the referral flow from primary care source to specialty providers and ultimately to acute-care setting.


Service Line LeakageWhat To Do

• Loose correlation to market share – treat it accordingly

• Prioritize “gazelles” not “field mice”


Other Items to Measure

Considerations

• Reliance of your network on employed competitor referral volume

• % of employed specialist volume referred from non-employed providers

• Volume kept within your ACO or CIN

• EMS volume

• Post-Acute care volume

• Other things unique to your situation. Tell us: __________________________

The six we’ve talked about today are only the beginning.


D.J. Sullivan


Travis Ansel








Combating Network Referral Leakage

Measure Manage

• What’s our current state

(benchmark)?

• What are the trends over time?

• What are the critical issues that

my team needs to deal with?

• Are we getting a return on

investments in time and

resources in our network?

• Dig into areas showing issues

• Define opportunities for

improvement

• Work with providers to define

root cause

• Build a plan and execute

There are no silver bullets to fixing referral leakage.

&

Goal: Create a repeatable system or a program that keeps your organization

focused on incremental improvement


Physician Network Intelligence

D.J. SullivanSENIOR CONSULTANT / BUSINESS DEVELOPMENT MANAGER


Go to our website: http://hsgadvisors.com/physician-network-intelligence/

Download our brochure

Schedule a demo

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Questions

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