Referral source loyalty is critical to a hospital’s long term success. Even with a post-acute referral network and “captive” referral sources, it’s important to enforce discipline amongst the post-acute referral network, given the downstream risk hospitals are assuming with all the new payment mechanisms. A solid starting point is measuring the “loyalty” of captive referral sources.
Here are four ways to measure referral source loyalty:
Geographic – Continuity of Care
Continuity of care is a key mission of an in-house agency or hospice. A good way to measure whether that goal is being met is to compare the hospital’s inpatient share over the geography to the post-acute market share of the agency for that same geography. Post-acute home health/hospice market share looks at only those patients who entered the service directly from an acute or post-acute care setting (acute care hospital, LTAC, rehab hospital or SNF). With the increased focus on population health, this metric is the ultimate measurement of referral source loyalty.
The hospital discharge planning process is one of the primary points of loyalty. However, discharge planning personnel can often have their own agendas, and our research has shown that the information from the case management or financial system is not entirely accurate. A more accurate approach relies on comparing hospital discharge data to post-acute provider admission information. This outside source of information enables agencies to objectively assess discharge behavior. The HMR Market Share Report (Home Health, Hospice) fulfills that role.
A minor point but one worth mentioning: often the service area of agency is smaller than that of the hospital, such as when the hospital is close to a state border. *We offer a recommended calculation which enables you to take that service area misalignment into consideration.
Skilled Nursing Facilities/Post-Acute Hospitals
If an independent post-acute facility is loyal to their network, they will keep their referral source (the acute care hospital) happy by referring the hospitals’ patients back to the in-house home care organization. That said, a good rule of thumb in measuring loyalty is “what comes in should equal what goes out.” This means that the percentage of referrals received from a hospital for a given SNF/non-acute hospital should match the percentage of referrals that SNF/hospital gives to the preferred home health agency/hospice. **We offer a pair of HMR SNF reports that assess whether this equilibrium is occurring by showing the source of admissions by hospital and where they referred patients after discharge by provider.
Throughout the country, hospitals are purchasing physician practices to achieve better integration of care. Generally speaking, the hospitals expect these doctors to refer to their in-house resources to accomplish that end, and this includes captive home health agencies and hospices. It can be difficult for even the best practice management software to track if an “employed” physician is signing orders for a competitor. The HMR Physician Behavior Reports fulfill that role by showing the percent of business for each agency/hospice for whom the doctor manages patients.
The Bottom Line
We are all familiar with the expression – “That which gets measured is that which gets changed.” To ensure loyalty among captive referral sources, a series of regular tracking reports is critical. First, the reports initiate the discussion and then they can followed by regular updates. This ensures that “non-compliant” parties get the message that they are being monitored.
The recently-revised Medicare data release schedule enables the successful implementation of a loyalty measurement program. Medicare information is now available with a six month lag and it is updated quarterly. This recency and repetition enables a consistent measurement for long-term loyalty tracking programs. Even freestanding agencies/hospices may find it useful to monitor their Medical Directors.
The onslaught of alternative payment models are forcing hospitals to become more concerned about what happens to patients after they leave their institution. It is in their own self-interest to make sure that these patients receive care from those providers who will achieve the best outcomes and not put the hospital at financial risk. A captive referral source loyalty tracking effort is one way to reach that goal.
* Hospital Discharges: Service Area Misalignment Calculation
Identify the percentage of the hospital’s patients that are within the captive agency/hospice service area. This can be done via the HMR Hospital Discharges by Zip Code Set Report (LINK). This calculation reveals the maximum market share the agency/hospice could hope to achieve. For example, if the hospital was located near a state border, out-of-state patients could not be served post-discharge, unless the agency/hospice had a license for the bordering state.
** Skilled Nursing Facilities/Post-Acute Hospitals: Assessing Equilibrium
For each SNF/post-acute hospital, a pair of reports (SNF Admissions by Hospital Report and Agency/Hospice Market Share by SNF) can be created. These reports show the source of the admissions by hospital and where the SNF referred patients after discharge. When these two reports are compared, it becomes apparent whether there is a balance in referrals in and referrals out, thereby illustrating the level of network loyalty.