Referral Outmigration - What it could be costing you.
Posted on: August 10th, 2009
Outmigration
Outmigration, what a strange word! What is it and why does the C suite spend so much thought life pondering it?
Outmigration is the phenomenon of broken physician referral practices.
Picture this:
During a physician golf outing, Bob (the resident neuro surgery god) gets a little “lit up” and leans over to Ted (a GP practicing in town) and casually asks, “Geeze Ted, you are a good looking guy . . . so why is your wife so ugly?” Obviously Bob meant it as a joke, but Ted doesn’t see it that way and forever after refuses to refer patients to Bob instead referring them to one of Bob’s competitors across town.
This is known as “Outmigration”. It is based in physician-on-physician crime. And it costs health systems a fortune.
In a recent audit of a hospital, we discovered that erosion in referral practices was driving $145,000,000 in business annually to competing systems. It amounted to $50,000,000. per 100 beds!
This revenue, especially if it is in higher reimbursement service lines, can mean life or death to a health system.
So what is to be done about it? Most of these physicians were practicing under the auspices of “privilege” and were not employed by the facility itself. Intervening in these relationships can seem “inappropriate” or even “self serving”. Both are labels that would undermine any attempts to remediate if believed.
The truth is that outmigration has a buddy: Blow-back. And it is in blow-back that health system executives have an edge and an opportunity to broach the conversation. “Blow-back” is the extenuating phenomenon whereby the referring physician over time erodes their own patient base by consistently pushing them into relationship with facilities they don’t practice at. And this behavior costs the referrer plenty!
The erosion of referring patterns eventually can cost a physician 20% of their own revenue and force the hospital they practice at to require un-compensated call and undermine their physician recruiting efforts! So all three sides lose:
- The system,
- The physician referring
- and the offending Doc who is no longer benefiting from their referrals.
First tracking outmigration, then calculating the burden on each party usually will allow an organization to approach a joint conversation where mutual best interest can begin to remediate the challenged relationships affecting all!
What would your physician partners be willing to change in their referral patterns if:
- Their change in behavior ended un-compensated call?
- Their change in behavior improved your ability to recruit new physicians?
- Their change in behavior increased their own patient base and income?
- Their change in behavior improved their level of self governance within your system?
View All Articles