3 ways to improve the health of your referral relationships

The fourth quarter is quickly approaching, and soon, administrators in long-term care will be developing their marketing plans for next year. If you’re in this position, now is the time to evaluate the health of your referral relationships. In fact, it’s the most important factor for you to examine as you create next year’s marketing plan.

Skilled nursing facilities (SNFs) and home healthcare agencies receive most of their referrals from healthcare entities, whereas assisted living facilities (ALFs) receive a significant percentage of inquiries from professional referral sources, both in healthcare and others areas, such as elder law attorneys and geriatric care managers. In my experience with ALFs, professional referrals convert at twice the rate of other classes of inquiries, such as advertising, site and signage and word of mouth, so healthy relationships are important. Here are three steps to help you improve or solidify your standing.

1. Evaluate trends

Start your appraisal by looking for trends in the number of referrals you receive from each source. If you have been maintaining a referral log—that’s a best practice, so if you aren’t doing it now, plan to start—you will be able to break down this information by month as well as at least the past two years to glean these trends:

  • Month-over-month referral trend since Jan. 1. Are referrals up, down or flat since the beginning of the year?
  • Year-over-year referral trends. Look at historical data from 2013 and, if possible, 2012, comparing them with data from the same time period this year. For instance, what’s the referral trend for January when you look at 2012, 2013 and 2014? How does the entire year of 2014 compare with 2013 and 2012? Are those trends positive, flat or negative?

Remember that you are looking for trends related to individual referral sources such as a hospital, physician’s office or home healthcare agency. The referral trends you discover will provide you with insights into what may be happening with all of your referral sources.

What valuable insights can you gain?

  • Opportunities to expand your business. A slight increase in a referral activity from established sources could suggest an even larger opportunity that you need to uncover. And if you had a new referral source in 2014, that suggests a new expansion opportunity that you must nurture and develop.
  • Threats to expanding your business. Obviously, a decline in referrals suggests that challenges exist to maintaining your census. A decline in referrals could mean that a case manager or physician who was a consistent referral source has left an organization, or it could suggest something much more significant, including a negative perception about your facility or the presence of new competitors in the market.

If referral trends have not changed, then look at your data within the context of what is occurring at each referral source. Is the entity growing, declining or remaining the same? If your referral source is a dynamic, evolving organization that is growing but your referrals are flat, you may be missing an opportunity to grow.

Another aspect of your referrals is their quality. If you are an administrator at a SNF, are you seeing an increase in managed care-related referrals and a decrease in Medicare-related referrals? If you are an administrator at an ALF, are you seeing an increase in financially unqualified referrals? Changes in payer mix and diagnoses suggest opportunities or dangers depending on your programs and services and the managed care contracts you have.

2. Call sources

The other tactic you can use to assess the health of your referral relationships is to schedule customer service marketing calls with key individuals at your sources. The goal of these telephone meetings is to gain honest feedback about your reputation with residents, potential residents and caregivers as well as the referral source’s perception of your customer service.

I developed this tactic in my first job with Bryn Mawr Rehab Hospital outside of Philadelphia. After working with my referral sources for a while, I realized that I needed a way to ensure that Bryn Mawr and I were meeting their needs and the needs of their patients. After trying this tactic for the first time, I immediately discovered that case management directors, physicians and their staff members, and elder law attorneys were happy to provide feedback about our services. Rarely were they unwilling to schedule such meetings with me.

The key to successfully executing this tactic is your approach when requesting the meeting. Your appeal should go something like this: “I’d like to schedule a meeting with you to get some honest, constructive feedback on the quality of our services; our reputation; and the follow-up, communication and customer service we provide you and your staff members during the referral process.”

Don’t confuse this tactic with what I call the “What can I do to get more of your business?” approach. Although sales professionals in many industries use this approach, the typical healthcare professional perceives it as a crass attempt to develop a relationship with him or her.

To avoid falling into the “more business” trap, ask your referral sources specific types of questions. As indicated by the wording of the request, query them about their perceptions of the quality of your services; your reputation with their patients/clients and their caregivers; your follow-up and communication with their staff members; your acceptance of their patients/clients with complex cases; and the speed with which you turn around referrals. Also ask them to describe their biggest challenges when addressing patient/client needs and when discharging them into the community. Finally, ask, “If there were no restrictions, what service or product you would like us to offer you and your staff?”

3. Respond to feedback

The answers you receive will vary, but your customer service marketing calls will reveal that referral sources fall into three basic categories: those who view their relationship with you as excellent and provide little negative feedback; those who view their relationship with you as positive, although they do give some specific negative feedback; and those who offer nothing but highly negative feedback, suggesting that you have a disaster on your hands or one in the making. Obviously, your response to an individual referral source will depend on which category it falls into.

For those sources that view their relationship with you as excellent, your evaluation of referral trends now becomes an important part of your response. If the referral trend is positive, then focus on the source’s wish list and create a plan to meet its advanced needs. Even with entities with which you have very health referral relationships, opportunities may present themselves to increase your business. If the referral trend is negative, then you can start a conversation about why referrals may be falling or why quality is changing (show the source your referral data). These changes are occurring despite the facts that the referral source is very pleased with your services and your reputation is stellar. This discussion should provide you with information that will enable you to adjust your marketing strategy and increase referrals from this source.

In the case of a referral source that has a mixed perception of you, your response should include focusing on the entity’s advanced needs and wish list and creating solutions to the minor problems that may be negatively affecting your relationship. Remember, issues that seem small can develop into significant problems if not treated.

In the case of a referral source that has a very negative perception of you (now you know why referrals have been decreasing for the past two years), first you must apologize for the problems your facility has created and then commit to developing a plan of correction based on the source’s feedback. Fixing the problems identified by the input should improve your ability to increase referrals from such a source.

The referral trend evaluation and customer service marketing call—and careful response to them—are techniques that will enable you to assess the health of your referral relationships and create new opportunities to increase referrals from all of your referral sources regardless of the current quality of those relationships.

Topics: Executive Leadership , Finance