A guide to improving physician in-network utilization
Editor's Note: This is the first of a three-part series offering insights into some of the fundamentals that drive growth for healthcare organizations.
In-network utilization is important: It helps sustain internal revenue streams, and often supports improved long-term health outcomes. However, keeping care in-network can be easier said than done. If your organization struggles with leakage, a lack of dedicated resources may be to blame. Let’s explore why health system loyalty matters, and the tactics and insights that are most important to promote physician alignment and keep referrals in-network.
Understand what leads to out-of-network referrals and leakage
Out-of-network referrals happen for a variety of reasons — and they aren't always directly within the health system’s control. According to a clinical practice initiative by the American College of Physicians, it’s noted that up to 50% of referrals are not completed.1 This can happen when providers fail to include key patient contact information or for other reasons. As a result, patients may be left to conduct their own research and choose a facility or provider on their own, which may lead them outside the network.
Therefore, health systems should focus on understanding and addressing referral leakage at the provider level, since most out-of-network referrals originate there. Healthcare providers may be reluctant to refer patients to in-network specialists if they’ve had issues with access in that service line previously. For example, if a patient needs a knee replacement, but an in-network orthopedic surgeon is unavailable for many months, the patient’s PCP may refer them elsewhere. Another physician may favor sending referrals to a colleague from medical school. Those personal referrals can be harder to redirect back in-network.
Another major (and often difficult-to-manage) driver of leakage is specialist preference. Surgeons and other providers may conduct consultations and follow-ups in your offices, but prefer to perform the actual procedure at a competing ASC that has newer equipment. Health systems should consider contributors to network leakage from every angle.
How to improve physician in-network utilization
With deep insight into your physician network, you can better target valuable referral opportunities, bridge communication gaps, and enhance overall care quality. Improving physician in-network utilization boils down to four primary factors:
- Access (a.k.a. scheduling limitations)
- Provider relationships
- Marketing
- Quality data
Since different departments influence these factors, health systems must work with them to understand where the gaps are, which service lines require the most support, and what tactics are most critical to initiating change.
Start with recruitment
The first sphere of influence is the health system recruitment office. During the hiring process, recruiters should pay attention to how engaged the physician is when it comes to supporting the network. Physicians who feel little loyalty to the health system are often less willing to recommend in-network physicians to their patients.
It’s also important to evaluate a physician’s business acumen in the hiring process and account for any professional-level training they may need to promote in-network utilization. More experienced physicians may have a refined business sense, while a physician right out of residency may need coaching to make a significant business impact.
When acquiring a physician practice, make sure you have accurate data about overall operations. For instance: Where do the patients come from, i.e., are they being mostly fed by a competitor? If so, they may not follow their physician to your health system. In that case, historic patient volume is no indication of future patient volume. Assuming you still want to move forward, make sure that you have the excess patient demand or marketing engine required to fill the physician's patient panel.
Never stop building relationships
The next level of influence involves engaging key leadership figures, such as service line leaders and medical department chairs, to shape behavior patterns within the health system network and drive referrals in. Consider them relationship builders — tasked with forging strong, genuine connections. They’re also skilled problem solvers — able to identify and track physician concerns, resolve those they can, escalate those they can’t (when appropriate), and generally close the loop on behalf of providers so they remain loyal and productive.
Maximize the impact of marketing
Healthcare marketing teams play a critical role in supporting hospital and health system operations, acting as consultants, brand representatives, relationship managers, and business development drivers. Frequent marketing outreach will help retain patients and keep referrals in-network. Begin by optimizing online physician profiles — including online patient reviews — on your health system’s website, practice websites, across all local listings, and on third-party consumer health sites. This will provide the aircover necessary when a consumer begins searching for providers, including referred providers and alternatives.
In addition to patient-facing strategies, marketing can play a powerful role in keeping referrals in-network by targeting referring providers where they already spend time online. For example, placing tailored messages on trusted third-party platforms like Medscape can raise awareness of your system’s specialty capabilities, clinical expertise, and streamlined referral processes. By staying visible and relevant in these digital spaces, marketing can help strengthen referral relationships, remind providers of in-network options, and reinforce your organization as the preferred destination for high-quality care.
Engage providers through a data-driven and informed approach
Real-time, actionable data on referral patterns — such as market claims and clinical data — can be a game changer, provided it is easily accessible and interpretable. By leveraging insights from claims, encounter, and referral-based analytics, health systems can strategically identify opportunities, allocate resources effectively, and gain a competitive edge. A data-driven physician outreach strategy serves as the gold standard for guiding growth initiatives, optimizing provider marketing, and addressing key market challenges through targeted activation.
Final thought (for now)
Out-of-network referrals represent serious amounts of lost income and potential patient lifetime value. But by recognizing (and addressing) what’s causing the leakage, continuing to foster relationships, and letting marketing play a supportive role, your organization can improve physician in-network utilization to the benefit of all.
Sources
- Centers for Medicare & Medicaid Services, Closing-the-Loop, http://cms.gov/priorities/innovation/files/x/tcpi-san-pp-loop.pdf
