Health care is a team sport, but passing the baton often fails
A closer look at the broken specialist referral process
To handle the ever-growing medical knowledge, doctors specialize more and more in different disciplines. But with the growing specialization, it becomes harder to navigate through these different experts and therefore patients rely ever more on competent generalists, i.e., their primary care providers, to find the proper care. In 2009, over 100m specialist referrals were made by primary care physicians in the US, and this number has probably only gone up since then. Making the appropriate referrals and providing an efficient referral process is critical for patient outcomes and health care costs. As patients usually don't price shop and follow their physician's advice, it makes referrals even more critical. Referrals also are an essential business factor for many providers. Primary care referrals constitute a significant source of revenue for hospitals and specialists, and there is a lot of thought going into how to influence referring providers.
In addition to the general importance referrals play in health care, a few interesting trends are happening with specialty referrals, which made me have a closer look at the referral process:
The referral process is fundamentally broken: either through adverse incentives (hospitals referring only within their system), old technology (yeah, Fax and CDs are still a thing), or lack of proper data to make good referral decisions.
With the rise of value-based care models, there will be more and more emphasis on referral management, as primary care providers and ACOs will be accountable for which specialist services their patients take.
Changes in the "Self-Referral" rule are helping to make it easier for value-based care organizations to steer their patients by relaxing the "Stark Law".
All the new entrants into the primary care market, including virtual first practices, retail clinics from Walmart & CVS, and the newly launched Amazon Care business, will generate a lot of new specialist referrals. It will be interesting to see where these referrals go and which processes these new players will establish.
Because referral management is ripe for disruption, let's have a look at a typical referral journey, what is broken at each step of the way, and who is currently trying to address these problems.
Determine Specialist Need
Many specialist referrals start with a visit to a primary care physician. If the primary doctor finds a condition that warrants more specific testing or treatment by a trained specialist, they will consider a referral.
The physician has to as whether a referral is even necessary. Research suggests that about 25% of specialist referrals are likely to be clinically inappropriate. These inappropriate referrals are a significant contributor to the overutilization of health care services and rising costs.
Solutions: To address the problem of inappropriate referrals, an interesting solution has emerged: e-consults are doctor-to-doctor virtual consultations where physicians can connect with a specialist to get a second opinion on a particular condition. One of the leading providers are RubiconMD and AristaMD. These e-consults can potentially avoid a specialist visit, as they can provide the primary caregiver with the knowledge needed to address the condition themselves.
When the physician has determined that a specialist referral is necessary, the next step is to select a specialist that the patient should be referred to. This is an optimization problem with many different factors to consider:
Medical: Medical skill, quality of care, specialization in specific conditions/ populations
Availability: doctor take new patients, next available appointment
Cost: Insurance coverage, expected co-pay for the patient, effects on value-based care performance
Relationships: specialist efforts to return the patient to the primary physician for care, good patient-specialist rapport, specialist part of the hospital network
Other patient needs: travel time, opening hours, cultural competence
In reality, certain factors supersede others. For example, if the referring physician is part of a hospital network, these networks usually require the physician to refer the patient to a doctor within the hospital network. The main reason hospital networks actively bought primary care practices was to get control of the stream of referrals and redirect them to their own (often more expensive) specialist services. But independent doctors are also not always choosing the optimal approach that balances medical needs with other patient needs, such as out-of-pocket costs and convenience. Because doctors don't have much time for each patient, they follow heuristics or refer the patients to doctors that the physician already has an established relationship. Also, obtaining the data to make an optimal decision might be hard for the physician, so it plays a limited role in the decision process.
Solutions: Several players set out to improve the referral decision process and provide data about physicians. First to mention is Ribbon Health, which is building a clean provider directory including cost data and quality metrics. Read Nikhil's post on Ribbon Health to learn more about what they are up to. I think it might be a smart move for them to provide a first-class functionality for specialist referral decisions instead of just being the data layer. Another exciting company is Violet, which offers data around cultural competency. Even with these players, I still think there is room for an application that physicians like and trust to provide data to support the referral decision.
Schedule Specialist Appointments
Scheduling is not an easy feat. Availability is constantly changing, and scheduling a specialty visit needs dedicated time from the referring physician's office. If the specialist has the same EMR as the referring provider, they often have scheduling capabilities, which simplifies the process tremendously. However, if they are on different EMRs, we will be sent back to the last century. In most cases, the referring physician has to revert to a good old telephone or even Fax to communicate with the specialist.
Solutions: Several scheduling solutions exist, such as Preferral, Luma Health, and plug-ins for legacy practice management solutions. However, most of these solutions seem to be sponsored by the specialist. There is little incentive for the referring physician to pick them up, especially if different specialists have different platforms. A solution here needs to be catered towards both: referring & referred providers.
In parallel to the scheduling process, information transfer has to happen, such as transferring patient notes, images, and test results. Same as with scheduling, for providers with the same EMR, interoperability is often not a big challenge, but if they don't... well Fax, CD, and paper print are the technology of choice.
Solutions: While in many practices Fax is still the standard, clinical data exchanges have formed. For example, DirectTrust provides a standard called Direct Secure Messaging or often called Direct Messaging, which is a secure messaging protocol that providers use to share patient data. DirectTrust works like e-mail and does not provide any standards on the content of the message, which makes it harder to automatically ingest it into EMRs or provide automated responses. The 360X initiative is trying to impose a data model on top of direct trust, but it has not found widespread adoption yet. Check out Brendan Keeler's post on adopting new standards his thoughts on clinical data exchanges.
Specialist Visit & Patient Engagement
When a patient visits the specialist, not everyone comes with a referral. Some patients just schedule their visits directly with the specialist, without consulting their primary care physician. Also, about 20% of all referrals never result in a specialist visit. Better patient engagement can probably influence the number of self-referred and no-show patients. In my opinion, great patient engagement includes the ability to change a specialist provider after the referral, reschedule an appointment, get educated on why a specialist visit is necessary, and make costs transparent. Also, even if the patient does not follow the referral route, it might be good to let their primary physician know and close out the loop.
Solutions: To address self-referring patients, many insurers & employers provide solutions for their members to search and compare specialist services. Market leaders here are Healthcare Bluebook and Castlight. However, they don't see a lot of uptake for more complex conditions. A reason could be that people think of their employer and insurance more to think about costs vs. quality.
There are some exciting players on the patient engagement side. Klara is a platform that allows for communication with a patient by different providers, which can be especially useful when integrated into the referral process.
Close the loop - Feedback to the Primary Care Provider
After the patient has seen the specialist, the specialist should send feedback back to the referring physician. Closing this feedback loop is vital for the primary care provider for several reasons: First, primary care providers are usually interested in the overall well-being of their patients. The primary care provider usually wants to make sure their patient actually went for their specialist visit. They should put the specialist diagnosis and treatment outcomes into the patient's context. They need to ensure that any necessary follow-up steps to the specialty visits are being taken. Second, if they want to hit certain quality metrics (especially important if they are in a value-based payment contract), they will need to provide documentation that their population actually went to see certain specialists.
But also, the specialist should have an interest in closing the feedback loop, especially in a non-hospital setting. Referrals are an essential source of business for many specialists, and building good relationships with the referring provider is key to keeping the referrals coming.
Solutions: The solutions here are very similar to the information exchange step, just that the information flows the other way. An interesting company to check out is PatientPing (now Bamboo Health), which pings primary care providers whenever one of their patients sees another physician. I am not sure, however, how well this works if a patient sees a provider that is not connected to PatientPing's service.
End-to-end referral management is a complicated process and involves many tasks. In my research, I found that there are many solutions for specific pain points along the line, but no solution exists so far that covers the whole process end-to-end. There are some interesting points to take away from this:
Specific solutions in this space should be designed as open as possible, with APIs to integrate with other solutions. Making it easy to interface will be a differentiating feature, as a lot of the value is created by incorporating these solutions into an end-to-end referral workflow.
There is probably a need for an orchestrating layer that allows providers to set up these different offerings quickly. I think smaller practices probably don't have the resources to employ developers to build custom integrations. Who will build the "Zapier" for medical workflows?
It's not trivial to decide who should be the "owner" of the end-to-end referral process. The challenge is that each stakeholder (patient, primary physician, specialist, payer, etc.) has different interests and usually only cares about their part of the process. Maybe with the rise of ACOs and other care coordination models, they will be the organization that will invest in orchestrating all the existing solutions into an end-to-end solution that satisfies all parties.
ReferralMD (getreferralmd.com) is another solution which solves many of these problems for both sending and receiving referrals.
I anticipate that companies like Zus Health and Particle Health will speed up innovation in the referral space. fyi the URL to "patients usually don't price shop" is not open to public