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Avoiding The Roller Coaster

This is a guest blog post from Drew Putnam and Bryce Bartel of MarketWare Systems.

Physician referral development truly is a roller coaster. Every physician liaison can attest to this fact. Referrals go up and down, physician satisfaction scores go up and down, quality of activities go up and down, and the sanity of a physician liaison goes up and down.
Within in this blog, we will talk about what contributes to the roller coaster in referral development within a physician liaison program and what levers can be pulled to slow down the motion of the ride and get the ride moving in one consistent direction.

What Contributes to the Roller Coaster?

The Roller Coaster Effect is the fluctuation of referrals from month to month. It produces months of high volumes and admissions from referring physicians and months of steep anxiety filled slopes where few referrals are being received. To better understand the causes of an organization’s referral coaster, a physician liaison should take a look at the relationships they have with high referring physicians. High referring physician are the main tracks of the roller coaster. If an organization understands the direction referrals from high referring physicians are going, then they will understand how steep the slopes will be in the roller coaster. Or in other words, the performance of high referring physicians dictate the size of the roller coaster.

The first thing that needs to be done is to group and categorize physicians by the volumes and admissions they provide to an organization. A Physician Relationship Management  system is the most efficient way to uncover “A-Tier” physicians. Using the 80/20 rule, the top 20% of physicians get placed into the “A-Tier” group. These physicians have the greatest impact on the up and down motion of the roller coaster.

Why are the 20% so Important?

Vilifredo Pareto (1848 – 1923), an Italian economist, developed the 80-20 rule or Law of the Vital Few as he found that 80% of the land in Italy was owned by 20% of the people and that 20% of the pea pods in his garden produced 80% of the peas.
Within ALL healthcare organizations, almost all of the referral base (80%) is represented by only a small group of loyal physicians (20%).

What We Know About the 20%:

  • 20%ers Produce Greater Return. The top referring physicians will produce 4 times the amount of referrals than the rest of the 80% of physicians.
  • Competition Will Be Going After Them. Making sure these physician relationships become loyal will be mission critical to a healthcare organization.
  • Able To Build Referrals Faster/Low Barriers to Entry. The physicians who represent the top 20% are ideal targets for additional services and referrals. Since they are already referring, there are lower barriers to entry and less work that needs to be done on the relationship.
  • They Hurt More If Lost. If a 100 physicians refer patients to an organization. It would mean that 80% of the referrals come from 20 of the physicians. If the organization lost just one of the 20 physicians, referrals would decrease by an astounding 4%.
  • Competition Is About The Margins. The goal in referral development is to gain as much referrals as possible. Going after the entire market may not be necessary to accomplish this goal. Strategically going after the 20%ers is the smartest and best way to grow referrals.

Working with the top 20% of physicians within a healthcare organization’s market will produce the greatest gain in referrals for an organization. Since the 20% cause the mountains and slopes on the roller coaster, by working with them, it will also allow an organization to develop their own roller coaster tracks. And hopefully, turn the tracks into a consistent growth line. Neglecting the top 20% of referral producing physicians will result in referral loss and the steep slopes in referrals for an organization.

The Gain and Loss Of One Twenty Percenter…

“To maximize personal productivity, realize that 80% of one’s time is spent on the trivial many [referral] activities. Analyze and identify which [referral] activities produce the most value to your company and then shift your focus so that you concentrate on the vital few (20%).” – Arthur W. Hafner, Ph.D

5 Easy Ways to Reduce The Roller Coaster Effect

  1. Continuous Contact With Your Top 20% Physicians. Flyers, email, cards any way of keeping the channel of communication open. By continually contacting the physicians, liaisons do not always have to be in the office to have a presence. The liaison will be on the physician’s mind more often and more referrals will come.
  2. Marketing Plans. Marketing Plans are a series of activities designed to build the physician relationship. For example, a physician liaison could bring materials to educate a physician on a new service line. If physicians look at the liaison as a source of valuable information they will be more likely to refer their patients.
  3. Become Indispensable. Challenge providers to refer. Help them to look for cases that will help benefit their practice. Ask the question “Give me your hardest patients”. If physicians can trust their hard patients will be taken care of, other referrals will follow.
  4. Identify Issues Quickly. Being able to know a problem and resolve it quickly is a great benefit. Physicians have many reps coming to them every day, all it takes is not responding to an issue for referrals to be redirected to competition.
  5. Be Easy to Do Business With. Customize communication, pitches, and marketing plans for each physician. And prove consistently that the liaison is a reliable representative to handle all of the physicians referrals. This will set the liaison above the competition and gain more loyalty from the physician.

Expanding Your Pipeline

Now that the base 20% or “A” tier physicians have been identified the plan should be to bring in more physicians to fill the funnel to extend the coaster tracks. In order to build a roller coaster whose tracks consistently move upward (which is the desired growth curve), a physician liaison program should first take control of their “A-Tier” physicians, which was discussed earlier, then look for opportunities to develop new physicians so that they can move them into the “A-Tier” group.

Half of the battle in referral development is finding the right target audience of physicians to visit. Making sure liaisons ask the correct questions when planning who to visit is a must. For example, when using a Healthcare CRM, a physician liaison should look at past data, months and years in the past, to uncover potential cracks in the referral network. There are many physicians who might have been considered an “A-Tier” physician a year or two ago, but now no longer refer the same level of volume. These physicians are perfect candidates to work with. Since they have referred in the past, there is already and “in” for referring high volume in the future. By expanding the pipeline with these types of physicians, steady growth will result from month to month.

Picking the Right Lever to Pull

In order to perform maintenance on a roller coaster a worker must understand the levers and tools available to them and exactly which one they should pull to manage current projects or issues. As physician liaisons look at their referral network they too must understand what activities and conversations they should be having (types of levers) with physicians that will produce the desired result.

Typically, in an amusement park there are all shapes and sizes of roller coasters. Smaller roller coasters require less maintenance and workers because there is less track to manage. Larger roller coasters have more testing, maintenance and workers assigned to them. Work performed on one roller coaster will not automatically translate into work needed for another roller coaster. The same is true for physician liaison programs. Each identified and targeted physician is unique, based on their geography, group size, level of competition, payer mix, age, personality type, etc. Determining what activities and conversation to have is centered on this uniqueness.
In order to pull the right lever, physician liaisons need to record and document their activities. Without knowing what has happened in the past, liaisons are simply guessing, at best, that they’re spending their time in a productive manner. It is as if they are pulling levers without understanding what the lever is suppose to do. The goal is to see that:

Effort = Desired Results
Once the effort or physician visit has been recorded, liaisons can use referral data to compare whether the effort equaled the desire effect. If it does, liaisons will know that they are pulling the right lever for the physician they are visiting. If they don’t see the desired result, then a course correction needs to be made and a different lever (activities or conversation) needs to be pulled.

Removing the Roller Coaster

As physician liaisons focus on their top 20% of referring physicians, they will be able to take control of the highs and lows of their referral network. In time, as they pull the right levers and perform the most effective activities, they will be able to remove the ups and downs of the roller coaster of referral development and soften up the referral patterns to create a predicable upward sloping growth line.