Shrinking Physician Referrals: 6 Tactics to Stop the Bleeding

6 Tactics to Stop the Bleeding

Too many hospitals and referral-based healthcare practices are seeing a drop in their prior sources and volume of physician referrals. Perhaps surprisingly, many more don’t even know (much less keep close tabs on) their rate of referral attrition.

It’s true that some of the reasons for shrinking physician referrals are beyond your control, including acquisition of primary care practices by hospitals and health systems and retirement of physicians, but that’s all the more reason to control everything you can that impacts your referrals from physicians.

Referral relationships, just like any personal relationships in our lives, require focus, attention and nurturing. The reality is that most healthcare organizations that are experienced fewer referrals from other doctors could be doing more and taking a more strategic approach to maintaining and even increasing physician referrals.

Here are the Top 10 tactics to consider if you want to hold on to the physician referrals you are getting and even grow your physician referrals.

Pay Attention to Your Data

Your EMR software or practice management system provides the raw data on sources and volume of referrals. But the data won’t be useful if it isn’t analyzed closely and frequently to understand referral trends – by referring physician and by referred case type (condition).

It’s equally important to track and review actual revenue per referred patient from each physician so you can track a meaningful return-on-investment of time, effort, personnel and other hard and soft costs of cultivating and protecting each physician relationship.

Know your customers

Your referring physicians are your customers – just like your patients are.

You can’t expect to influence behavior if you don’t really know your customer and understand their issues, needs, motivations and challenges when referring patients to you or your competitors.

If you don’t already have customer relationship management (CRM) software, there are many good ones already customized or easily customized for physician referrals and most of them are cloud-based so you can input, update and access your data from any browser. Two popular examples are referralMD (https://getreferralmd.com) and MDreferralPRO (https://mdreferralpro.com).

Again, the data is only as good as your analysis and go-forward strategy for each physician referral source.

And it’s not enough to track number of patients referred, condition/case type and associated revenue. You need to capture, record and utilize information about each physician’s likes, dislikes and comfort level in referring their patients. If you know the physician’s birthday or anniversary date to send a nice card, that kind of thoughtful gesture illustrates and reinforces the personal nature of your relationship.

You also need to understand which types of patients and cases they refer to you and which types of patients and conditions they treat that they don’t refer to you – but could.

Doctors, just like everyone else, are creatures of habit.

If they are used to referring a certain condition or patient profile to you and they know you do a good job handling that patient, they will refer more of the same. If they refer other patients for other problems that you treat to other physicians, they are likely to maintain those referral patterns unless you or their current referral source gives them reason to reconsider.

Prioritize your targets

The most time, attention and frequency of contact should be dedicated to your most important referral sources based on the volume, frequency and case type(s) that you already receive from them. It’s much harder and more expensive to create a new customer than to appreciate and nurture a current, good customer.

This focus does not mean that you should not target physicians who could refer to you but don’t. It just means that you cannot afford to ignore, neglect or take for granted your already existing valuable relationships.

There is no universal formula for time spent working on current relationships vs. time spent developing new relationships, but err on the side of more time spent with current customers than with prospective new ones (unless you are a new office or facility, of course).

Sixty percent time on current customers and forty percent on prospective new customers is a good ratio for many healthcare organizations that already have a physician referral base but that ratio may or may not fit your profile and objectives.

One of the most commonly overlooked categories in developing new relationships with physicians can be found in multi-physician offices where you get referrals from one physician but not from their colleagues in the same practice. If you have a good relationship with one physician in a group, you can learn from and leverage that relationship to build relationships with some of their colleagues who don’t refer to you. It’s a lot easier and more productive than cold-calling offices where you have no established referral relationship.

Employ a skilled salesperson to work your referral source relationships.

Often, this role is titled “Physician Liaison” but a rose by any other name is still a skilled salesperson (or should be). Notice the intentional focus on salesperson rather than marketer.

The ideal person for this job is someone who can nurture and influence desired referral behavior.

Educating referring physicians about what you do and why you are the best choice for their patients is important but information without motivation won’t necessarily win the day.

A skilled salesperson doesn’t appear to be selling. They are relationship-builders but with a measurable goal: getting more referrals and protecting relationships with your referrers. A strong performer also understands how to identify the “pain” that the referral source may be experiencing so they can empathize and provide actual solutions that remove that pain and make the lives of the referring physicians, their staff and their patients easier.

This isn’t going to work as a “part-time” extra responsibility of one of your clinical or administrative employees. If you can’t justify the commitment to a full-time employee for this specific role, at least engage a skilled professional as a part-time independent contractor.

It helps – a LOT – if the IC has experience with marketing and selling to physicians. For example, “semi-retired” pharmaceutical reps who have families and now want part-time work but not full-time employment could be effective in this role.

Compensation for this position should be a decent base plus bonus potential based on hitting agreed, measurable milestones and quantifiable goals. The bonus “upside” should be generous enough to appeal to an experienced salesperson. Someone who just wants a salary and doesn’t care about performance-based incentives is not someone you want to hire.

Give your referral source useful, educational handouts.

This is not about creating unwanted clutter in the referrer’s office. Any literature needs to be directly useful and helpful for their patients. Anything that can answer patient questions about health conditions and save the staff extra explaining time will be appreciated and used.

If you are just going to deliver obvious self-promotional materials, forget about it.

Any time you take and information you provide in your contacts with referring physician offices should be focused on what’s in it for them and their patients – not what’s in it for you. Seems like common sense, but you might be surprised how often the messaging is about the referral-seeking provider rather than being about their customers.

In addition to appropriate, professional literature or other materials, case studies are often well received (and actually read) by physicians.

Have a strategic purpose for each visit or contact with each referral source.

If you don’t have a specific objective for each contact with each referral source, you won’t see the results you want. The days of drop-by visits bringing food goodies for the staff and asking if there is anything we can do to make our service better is simply not enough.

The staff won’t turn down the food and they may even appreciate your interest in improving your service to them. But if you expect the office to refer more or a different type of patient and case than you already get from the physician, you need to provide value in each visit in terms of something that either makes their lives easier or educates them on how, when and why to refer patients to you for each of the conditions you treat and services you provide.

If you want to discuss your physician referral strategy, contact me at 800-924-5447 or email Lonnie.Hirsch@HirschHealthConsulting.com.