Healthcare News & Insights

Increasing downstream referral revenue with telemedicine

In this guest post, Joel Barthelemy, founder and CEO of a virtual health company, explains how implementing a virtual health program can provide a foundation for consistent care coordination, exceptional patient experience and advantages for physicians.


Ask providers to name the benefits of telemedicine and they’ll probably say increasing access to care and cost savings. Virtual care implementations can reach the underserved, reduce no-shows, eliminate air transport and be faster to deploy than new brick-and-mortar facility space.

But revenue? That’s not a common response. Yet many healthcare leaders are forgetting a significant revenue driver in virtual care – downstream referrals.

When referred patients go rogue

Referrals are a mainstay of modern healthcare. One of every three patients is referred to a cardiologist, urologist, orthopedic surgeon or other specialist each year in the U.S. Other patients are referred to primary care from emergency departments and urgent care centers. Yet the referral process can be haphazard, involving lost faxes, misplaced notepads and incomplete EHR workflows – and ending in missed care.

Most providers also try to refer patients to other providers in their payor network to meet Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) requirements. But 25% to 50% of referring physicians don’t even know if their patients end up seeing the provider recommended – and many patients choose a provider who’s out of network or in a different hospital system, something known as patient leakage.

Patients go rogue for several reasons:

  • Unavailable services. Depending on the patient’s location, the services they need may not be available at the local hospital. There are only 30 specialists per 100,000 rural residents, but 263 specialists per 100,000 urban residents. Patients asked to travel hours to visit an in-network doctor may skip treatment altogether or choose to pay out-of-network rates for someone closer.
  • Lack of telehealth options. 74% of Millennials would prefer a virtual visit to an in-person visit – and Generation Z is just as digitally inclined. Younger patients may hunt down providers with virtual programs or even turn to Direct-To-Consumer (DTC) telehealth apps, rather than attend a traditional office visit.
  • Infrastructure delays. Even in the same hospital network or organization, different teams use a hodgepodge of technology platforms and referral methods. Patients finding themselves waiting weeks or even months for a referral to be submitted, may strike off on their own.
  • Online branding. Providers tend to make referrals based on colleague relationships – but patients often look up the doctor’s online reviews. They can also be attracted by a illustrious hospital brand like Sloan Kettering or the Mayo Clinic or gravitate toward a surgeon with celebrity patients or a best-selling book.

Turning connected care into connected referrals

Several losses result when patients go out of network. The old and new providers often don’t collaborate, shutting down care coordination. Accountable care organizations (ACOs) lose visibility and can no longer manage costs and care quality.

The other problem: The potential reimbursement for those medical services now goes to an outside provider. If the patient adopts that new provider for other care needs, they’ll transfer all future revenue out of their former medical home.

This might sound like a minimal loss – but for hospital networks and large healthcare systems it can add up to considerable revenue.

This is where telemedicine can help by increasing downstream referrals. Imagine that in one month, your hospital network turns 1,000 telemedicine visits into these in-network referrals:

  • 300 primary care visits: $150/visit = $45,000
  • 100 emergency room visits: $1,200/visit = $120,000
  • 700 lab tests: $200/visit = $140,000
  • 200 radiology services: $1,000/visit = $200,000
  • 100 cardiology visits: $300/visit = $30,000

The additional referral revenue for that month – $535,000.

4 steps to higher referral revenue

  1. Adopt a provider-agnostic telemedicine solution. A direct-to-consumer (DTC) telehealth app will divert the patient outside of your network. Be sure to implement a telemedicine solution that can be used by any provider so your patients can connect to clinicians throughout your organization.
  2. Remove location as a factor. It’s easier to refer within your network and steer patients toward other services in your system with telemedicine – because it doesn’t matter where providers are located. Offer choices for in-network specialists and see if you can accommodate patient preferences to keep them in-house.
  3. Conference specialists into the original appointment. Instead of writing a referral and making the patient attend a second appointment, have a specialist remotely join the appointment with you. In addition to faster treatment, there’s no danger of the patient leaving the network because you initiate the consult while the patient is in your office.
  4. Offer a telemedicine fee schedule. If patients need services that aren’t covered by health insurance, they have no reason to stay in-network since they’re paying the provider’s full fee no matter who they see. One way to keep that revenue in your organization is to offer a special virtual health service rate from your providers, which spares patients from travel and higher out-of-network fees.

Telemedicine offers a road to higher revenue – but ultimately patient retention is about more than reimbursement. By implementing a virtual health program, leaders can provide a foundation for consistent care coordination and an exceptional patient experience, while offering advantages for their clinicians as well.

Joel Barthelemy is the founder and CEO of GlobalMed, a virtual health company that is honored to be the telehealth provider to the White House, Dept. of Veterans Affairs and Defense Health Agency and many commercial healthcare systems in the U.S. and around the world.



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