A hidden referral system that guides doctors

Learn about the battle between “Keepage” versus “Leakage.” Physicians working for hospital-based systems are being increasingly monitored and pressured to Keep referrals within their system, regardless of cost and quality considerations.

No surprise here. Hospitals have made significant investments in purchasing practices and are now making every effort to keep referrals fully within their own systems. Hospitals are using a range of tactics to keep patients within their systems, from the subtle - listing the hospital’s own specialists and services in the EMR in easy-to-find dropdown menus - to more overt methods, such as employment contracts that mandate doctors refer within their system. The key here is: “Patients are often in the dark about why their doctors referred them to a particular physician or facility. Increasingly, those calls are being driven by pressure to keep business within a hospital system, even if an outside referral might benefit the patient, according to documents and interviews with doctors, current and former hospital executives and lawyers.” There could be real benefits in staying within the same system, including a consistent service experience that delivers better quality at a lower cost. Think of how other industries work: you select the Apple environment for the unified digital experience. But the difference is that in healthcare the decisions by the doctors remain very opaque to the patient. And there is significant evidence that hospital based systems are usually much more expensive than out-of-hospital services. Exceptions may be integrated delivery systems such as Kaiser, which has integrated insurance and delivery of care to control costs. Opportunities for innovators include, making the reason for selecting a given specialist, lab, or radiology facility completely transparent to the patient, and building referral systems that deliver the lowest total cost of care.

Read WSJ: The Hidden System That Explains How Your Doctor Makes Referrals

Read WSJ: Behind Your Rising Health-Care Bills: Secret Hospital Deals That Squelch Competition

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