With millions of physician referrals up for grabs, partnerships with consumer-centric sites of service matter

• CVS MinuteClinics made 4 million referrals to primary care providers last year, according to a Jan. 18 Modern Healthcare article.
• If you assume that everyone who received a referral followed up and saw a non-CVS PCP, that’s roughly 1% of the primary care office visits each year, according to a rough estimate by HFMA’s Chad Mulvany.
• Mulvany said he guesses the number of referrals to PCPs and specialists from consumer-centric/more retail providers will only increase as patients seek more convenient access points to the health system.

CVS Minute Clinics made 4 million referrals to primary care providers last year, according to the Jan. 18 Modern Healthcare article: “Execs focus on diversification, not admissions, during J. P. Morgan Healthcare Conference.”

Takeaway

This factoid caught my eye given I, like many others, have spent a lot of time speculating about the potential impact of CVS/Aetna and other similar consumer-centric care offerings on referral patterns. Here are takeaways:

• It’s not perfect, but if you assume that everyone who received a referral actually followed up and saw a non-CVS PCP,  that’s roughly 1% of the primary care office visits in a given year, which is my estimate based on 2016 Centers for Disease Control and Prevention data about ambulatory care use and physician office visits. The immediate impact is that those 4 million PCP referrals could have resulted in as many as 400,000 referrals to specialists (again . . . my  best guess) based on data presented in a Jan. 23, 2012 JAMA Internal Medicine article: “Trends in Physician Referrals in the United States, 1999-2009.” So at the national level, that’s a fair amount of downstream revenue. And that’s just from CVS walk-in clinics.

• Beyond the immediate downstream business, the datapoint on referrals helps tangibly illustrate that a large number of people, who do not have a relationship with a regular-care provider or could not see their PCP in a timely manner (and by extension, a health system),  are “up for grabs.” And assuming they had a good experience with the provider they were referred to, they will likely go back to them in the future when they have something more serious/complicated than can be treated in a CVS MinuteClinic. So from that one referral, there are multiple potential revenue-generating opportunities over the lifetime of the relationship. (Side note, while some health systems are thinking about how to apply the lifetime value of a customer metric, or a derivation of it, it’s mostly the larger, more progressive organizations who are making progress. They also tend to be more focused on transitioning to population health models, which makes sense. It’s easier  to apply the concept to health plans, since there’s a clear, predictable revenue stream, you know your average churn rate and your Medical Loss Ratio.

• My guess is the number of referrals to PCPs and specialists from consumer-centric/more retail providers will only increase as patients seek more convenient access points to the health system. So in a more competitive environment where traditional referral patterns are at risk of being upended, it’s crucial for health systems to partner with the CVS’s of the world to capture these downstream opportunities.