How Managing Referrals Saved One Hospital $1.2 Million

Lancaster Regional Medical Center's EHR could not produce a usable summary-of-care document—until it brought in software that generates and tracks referral options. In two years, out-of-network leakage is down 20% and savings exceed $1 million.

When you boil down the care coordination problem at the heart of population health, it's all about the referral workflow.

I would be so bold to say that any population health technology offered to providers which does not manage to insert itself into the referral workflow of those providers is probably doomed to failure.

At Lancaster Regional Medical Center in Lancaster, Pennsylvania, CEO Russell Baxley, who was COO before assuming the CEO role a year ago, understands referral workflow. "The number one complaint I had from our physicians was, 'Our patients go into your hospital, but the information never comes back out,' he says. "You're like a black hole of patient information."

Specifically, Lancaster's EHR could not produce a transition-of-care summary document or effectively manage referrals, the outcomes of which could be sent back to Lancaster after a discharge from Lancaster's ER or other acute care.

To which I observed to Baxley, you would think this is something every EHR could produce.

"You would think that it would, and to be honest, I was shocked that our EHRs could not take care of it," Baxley says.

Two years ago, Lancaster, one of the hospitals owned by nationwide provider Community Health Systems, turned to one of the new-generation "post-EHR" products—in fact, to a product which works with EHRs but does not require one—in order to produce a usable summary-of-care document and keep the patient's healthcare team from dropping the care coordination ball.

HIT Enters 'Post-EHR Era'

The biggest source of frustration had been in Lancaster's ED, which uses the Medhost EHR for EDs. Baxley knew one of the Medhost creators when he worked in Texas, and from its creator, he learned of par8o.

It's worth understanding how par8o leverages some previous healthcare IT infrastructure which puts it in a position to help solve Baxley's problem. The par8o platform is itself a 2011 spinoff of Sermo, a leading social network for physicians. The par8o name is a play on the name of Italian economist Vilfredo Pareto, known for the 80/20 rule (aka the Pareto Principle) as well as the economic principle of Pareto optimization, a method of maximum resource allocation.

"We identified the moment of transition of care as a very kind of critical moment in the journey of the patient through their healthcare consumption experience—the moment when there's been a change of diagnosis, an escalation in care, and the patient's in need of a new resource—commonly known as the referral moment," says Adam Sharp, an emergency medicine physician by training and currently CMO of par8o.

Not all referral moments are when one provider refers to another. It could also be when a patient, or her employer, initiates a self-referral.

Sermo client Johnson & Johnson gave Sermo a $3 million grant to build the technology which would become par8o. After the spinoff, par8o's first big customer was an employer, MGM Resorts International in Las Vegas.

"We had just taken the platform live into kind of an open alpha, when the phone rang, and it was MGM asking us if we could help them to build out a high-performance provider network, and then layer a patient-centered medical home model into that network to care for their pool of 35,000 employees in the state of Nevada," Sharp says.

The MGM implementation has been live for three years. Other deployments followed at Brigham and Women's Hospital in Boston and at Mount Sinai Health System in New York. By now, par8o has "also done full integration to some of the larger EMR players, Allscripts and Epic being the two that are currently live," Sharp says.

Stopping Leakage
The par8o algorithms consider clinical diagnoses, resources available within that particular health system, and corporate goals to minimize leakage—that phenomenon where patients end up leaving the system to seek care at physicians not affiliated with a particular health system or payer network.

Then, par8o presents a ranked list of referral possibilities to the physician or employer, factoring in all the above considerations. Sharp says that at Brigham and Women's, these measures were able to decrease the hospital's out-of-network leakage by about 20%.

That ranked list also drew upon something Sermo had built: a database of every physician (MDs and DOs) in the U.S, which par8o is able to use to contact the physician being referred to.

After a referral, par8o then tracks those referrals in CRM-like fashion, allowing those referrals to be managed by everyone from a physician to a care coordinator to a large call center, and following up to make sure that patients make it to the referred appointment.

Any results from the referral then make it back to a referring physician. Because software tracks all this, it means drastically reducing the number of phone calls needed to make it all work, Sharp says.

Sharp also notes that par8o is even showing up at imaging centers that don't have an EHR, but still need to manage incoming referrals and followups back to the referring providers.

Bigger players in healthcare are beginning to take notice. United Healthcare invested $3 million in par8o last October. (So far, United is not a par8o client, though Sharp says par8o is in conversations with a variety of commercial payers.)

Eliciting Faster Responses
Back at Lancaster Regional Medical Center, Baxley says par8o has made 63,000 referrals so far. About 10,000 of those were simple notifications alerting physicians that patients had presented in the Lancaster ED. The balance were calls to action for those physicians to see patients ASAP as followup to their Lancaster encounters.

"We always monitor time-to-first-action or contact with the patient, and I can tell you that when we first started, our average time-to-contact was probably in or around the 20-hour mark," Baxley says. "Right now our time-to-contact a patient for our entire network—that means employee providers, non-employee providers, affiliates, etc.—we're under 8 hours. A patient will receive a phone call on average within 8 hours of that referral being sent."

Even patients are catching on that Lancaster is using this little-known software. "They actually ask our ED physicians, are you going to send my appointment request through par8o? Now how they know that and why they know that, I'm not entirely sure, but the community is catching on that we are using a system that is getting them to their provider in a timely manner," Baxley says.

As far as other ROI, Lancaster's declining readmission rates, so far, cannot be attributed to par8o, but Baxley says system leakage is down, attributable to par8o, and has saved the system $1.2 million over the past two years.

In the end, that is the kind of metric that will drive technology such as par8o into referral workflow, because every clinician understands the more money squeezed out of waste and inefficiency, the more money can go to actual care. As I've said in the past, it won't necessarily happen by sitting around waiting for the EHR vendors to fix things themselves.