Consolidation in healthcare and hospital employment of primary care physicians is causing detrimental referral pattern changes. In the past, specialists could gain a primary care physician's trust by providing positive outcomes, all but ensuring a healthy stream of referrals. This is no longer the case.
"While this process and relationship pattern development still remains somewhat true today, we have seen several changes in the past few years," says President of Outpatient Healthcare Strategies Jessica Nantz. "The majority of these changes are the result of primary care physicians becoming employed by hospitals and health systems or forming 'super groups.' In these positions, primary care physicians are increasingly taking the lead in healthcare delivery by negotiating risk-sharing scenarios with payers and employers."
Hospital-employed physicians are more likely to refer patients to surgeons and outpatient facilities within the same hospital or health system; sometimes they are required to. To complicate matters, hospitals are employing physicians at a higher rate than before. American Hospital Association data shows the number of hospital-employed physicians grew 34 percent from 2000 to 2010.
There isn't much surgeons outside of the network can do to maintain referrals from employed primary care physicians, beyond joining the network themselves.
"As hospital and health systems purchase practices, especially primary care, many specialists also consider physician employment so they do not have to worry about identifying new referral sources," says Ms. Nantz. "Finding new referral sources has become an increasingly difficult process for independent specialists these past few years."
However, independence is still important to many physicians, especially ASC owners. As a result, physician specialists are joining together in super groups as well and forming independent physician associations. The large groups can command respect as the dominant player in the market and leverage their size in payer negotiations for increased reimbursement and take on at-risk payment models.
"Another trend that is emerging, and used by some independent physicians, is for physicians to subspecialize in their area of practice," says Ms. Nantz. "Although this is a long-term strategy, when a physician becomes one of two or three physicians in a market to specialize in a procedure, albeit one that could sometimes be accomplished by a generalist, the subspecialist will typically receive the referral as the expert in the procedure."
If the PCPs are in a super group, there are partnership opportunities that could be beneficial for the center.
"Primary care physicians in super groups are looking to refer patients to outpatient surgical facilities that can deliver positive surgical outcomes and help the super group maximize the profits — through reduced costs — associated with risk-sharing payment models," says Ms. Nantz. Payers are also injecting influence over referral patterns, more than in the past. "Cost and risk-sharing with payers and primary care groups is another developing trend. Insurance companies are increasingly adopting models that force patients and providers to share more cost and risk than before."
Patients are also taking more control over the healthcare decision-making process. This is partially because patients bare a heavier financial burden than in the past. There is also a movement toward assisting patients in educated decision-making.
"Patients are bearing greater responsibility for their healthcare costs in the form of higher premiums, deductibles and copays," says Ms. Nantz. "This has encouraged patients to become more involved in the referral process as they are asking more questions about their provider options in areas including cost and outcomes."
So how can ASCs ensure a strong referral pattern and patient flow in the future?
The answer is complicated. Depending on the ASC's market, partnerships with hospitals, payers or other independent physicians could be the most valuable tactic to ensure the ASC's survival. A few of the most important factors to consider include:
• Whether the market is attractive to new physicians who want to be recruited for ASC ownership
• Whether a hospital or health system is actively acquiring physician groups
• Whether a single payer dominates the market to influence patient flow
"ASCs must examine the value of developing formal and informal arrangements with hospitals, health systems, payers and large primary care physician groups," says Ms. Nantz. "Most ASCs will find the combination and diversification of some or even all of these efforts will serve them best over the long term."
These market forces will also impact where ASCs can expect the most referrals from in the future. Hospital-owned ASCs will continue to see the most referrals from primary care physicians employed at the hospital, or PCP practices the hospital owns. The traditional referral sources will remain largely from independent primary care groups and other non-surgical specialists, says Ms. Nantz.
"ASCs are still typically highly reliant upon the relationships and contracts they have with third-party payers, and often remain at the will of third-party payers due to the strength of their insurance products that allow limitation of reimbursement," she says. "Referrals may also come from patients as they become more actively involved in participating in their healthcare decisions, become savvier about the cost of their healthcare and learn about their options for care."
ASCs are also beginning to provide transparent pricing and quality outcomes data to attract self-funded employers and individual patients. These same qualities appeal to physician groups referring cases to specialists at the ASC.
Finally, the more traditional methods of growing patient volume — recruiting new physicians and adding specialties — still present significant opportunities for the future. "This may include cases not previously seen in ASCs five to 10 years ago, such as spine, retina and total joint cases," says Ms. Nantz. But the traditional methods may not last forever, and the smartest ASC leaders depend on a mixture of new and old strategies to attract referrals.
"Many successful operators tend to diversify their approach to operations," says Ms. Nantz. "One such avenue is participating in an accountable care organization. ASCs that know how to control their cost and produce high patient satisfaction outcomes would seem to be a natural fit for inclusion in an ACO. However, the viability of this option has yet to be determined in most market because the ACO model is still in its infancy."
Other important tactics include:
1. Maintain discussions with large groups that have control of patient referral direction and discuss alignment strategies and opportunities.
2. Meet with payers to discuss payment models that can fulfill the payer's and ASC's financial and clinical objectives.
3. Engage in direct-to-consumer marketing to increase the ASC's visibility among consumers as they become more active in their healthcare.
"There are many different ways an ASC can market itself to patients, so ASCs will likely want to try a number of initiatives and track their success," says Ms. Nantz. "As an added bonus, direct-to-consumer marketing efforts may also help attract physicians who find the ASC's efforts to grow and market the business — often through marketing the ASC's physicians — appealing."
Every market has different nuances to consider and the best results are variable, based on:
• Rural vs. metropolitan location
• Density and aggressiveness of competition
• Physicians' desires toward independence or employment
"ASC owners who want to be successful should take a multi-faceted approach to this dynamic problem," Ms. Nantz says.