In a new survey, nearly all (96 percent) responding healthcare executives say patient leakage is a priority this year, but only 31 percent of leaders who have a plan to keep patients within their health system networks believe they have the right tools to accomplish their goals.
The survey, conducted by healthcare solutions company Central Logic along with an independent market research firm, included responses from 138 double-verified senior health system and hospital executives responsible for patient care, hospital administration, finance or operations. Of the survey respondents, 80 percent were C-level executives, and two-thirds represented hospital networks with 251 or more beds; of those, more than 20 percent represented networks of 1,500 beds or more.
The challenge of patient leakage—in which patients seek care beyond their network—has taken on greater importance during COVID-19, as hospitals' and health systems' operating margins have dropped precipitously, the survey’s researchers noted. To this point, Central Logic officials noted that while CARES Act funding has offered some financial relief, these organizations are expected to lose more than $323 billion in 2020 due in large part to restrictions on elective procedures and patients canceling or deferring care.
What’s more, in accountable care organizations, (ACOs), for example, network leakage for ACOs occurs when its attributed patients are visiting practices or institutions not owned by or contracted with the ACO. To provide integrated care across the continuum, healthcare organizations need to ensure that patients have maximum access to all levels of care services without going out of network. Most organizations lose about $200 to $500 million per year due to network leakage, much of which is potentially avoidable, according to a recent report from healthcare technology company Innovaccer/
“The [report], based on the results of our survey, highlights a crisis of confidence among healthcare executives that started even before COVID-19," said Angie Franks, CEO of Central Logic. "The pandemic has exacerbated this crisis, but attracting, retaining and repatriating patients back into health system networks is now an incredibly important financial priority for health system leaders, given the massive financial losses they have suffered."
Of particular importance is attracting patients to health systems' Centers of Excellence for acute conditions such as strokes or heart attacks, and for routine specialty care such as orthopedics. Health systems make significant investments in these specialty centers to ensure the highest quality care. Rebuilding and even growing patient volume within Centers of Excellence needs to be a top priority, given the impact the pandemic has had on utilization, according to the research. For example, during the peak of the pandemic, utilization of cardiology services dropped by 71 percent, while revenue decreased 73 percent. For orthopedics, utilization dropped by 65 percent, while revenue dropped by 59 percent.
“We commissioned this survey to highlight the critical issue of patient leakage facing health systems," Franks said. "These results also reinforce the fact that efficiently orchestrating, navigating and elevating the flow of patients through the entire care continuum is becoming even more critical in order to prevent patient leakage, and repatriating patients back into the health system network is more important than ever if they do seek outside care."
As the survey’s researchers offered, when patients receive care from a competitor's health system, the original health system may suffer two negative financial impacts. One impact is a loss of revenue because it will not receive payment for services delivered by a competitor. The other impact is tied to value-based care payment models, such as the Medicare Shared Savings Program (MSSP). In some versions of the MSSP, affiliated groups of providers as part of ACOs assume all care costs for an attributed population of Medicare beneficiaries, even if that beneficiary receives care from an unaffiliated provider. That is why it is in the ACO's best interest to ensure that beneficiary receives care from a provider in its network, they explained.
In the report, 80 percent of executives said value-based care models have made addressing patient leakage more important, but more than 38 percent either were unconfident or didn't know if their organization had visibility into leakage. Other key findings in this area include:
• 75 percent said patient leakage is a significant obstacle to their financial goals
• Only 31 percent of the healthcare systems who definitely have a strategy to reduce patient leakage said they have the right tools to get it done
• Organizations that don't use technology to quantify patient leakage were less likely to know which service lines were most affected by loss of patients
One major patient leakage improvement priority for health systems is attracting and retaining new patients. Specifically, health systems want to increase patient transfers from community hospital emergency departments (EDs) to their specialized tertiary care facilities, such as a stroke or trauma care center, the researchers noted. The survey showed that just 22 percent of healthcare executives who participated in the survey responded that their own EDs "definitely" drive enough patient volume to their specialty centers. They estimated only 35 percent of specialty center referrals are coming from their own EDs, which means referrals from community hospitals must fill the gap. Likewise, 66 percent of executives say driving referrals from community hospitals to specialty centers is a top priority, but cited competition from other health systems as their No. 1 challenge.
Ultimately, however, increasing referrals from community hospitals will continue to challenge some health systems because they lack the processes and tools to efficiently measure and manage patient care orchestration throughout the network. For example, more than 20 percent of healthcare executives do not know which service lines are most impacted by patient leakage and 27 percent of health systems do not have adequate technology in place to reduce patient leakage, according to the survey. Meanwhile, organizations that do not use technology to quantify patient leakage are 23 percent less likely to know which service lines are most affected by the loss of patients.
"The silver lining in our report is that the health systems that were focused on reducing patient leakage before the pandemic likely had an advantage in preventing patients from leaving their network or will have an easier time repatriating them back to their Centers of Excellence," Franks said. "With knowledgeable, experienced support from advisors and proven technology, results can be achieved even faster.
