Our Healthcare Referral System is Broken – Dollars wasted, lives lost

The Healthcare Problem: The Facts – Medical and dental referral letter issues 

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Paper Communication – Slow and Inefficient

11 disturbing facts of how paper based communication impacts the cost and security of the healthcare industry.

Billions of dollars are mismanaged and millions of lives globally (195,000 nationally) are lost due to preventable medical errors.

  1. 60-70% of referrals go unscheduled 10
  2. 25% of scheduled appointments are missed 8
  3. 68% of specialists receive no information from the PCP prior to referral visits 9
  4. 25% of primary care physicians do not receive timely information from specialists post-referral 10
  5. It costs nearly $250 billion to process 30 billion healthcare transactions each year 1
  6. The average ratio of staff handling paperwork to doctors can be as high as 8:1 2
  7. 86% of mistakes made in the healthcare industry are administrative 3
  8. Three of every 10 tests are reordered because results cannot be found 4
  9. Patient charts cannot be found on 30% of visits 5
  10. Providers need to fill out an average of 20,000 forms every year 6
  11. Organizations, on average, make 19 copies of each document, spend $20 in labor to file each document and lose one of every 20 documents 7
1. Woodworth, Glenn. “2003: The Year of Medical Paperwork Simplification,” Journal of Healthcare Information Managament Winter 2003, vol. 17. no. 1, pp. 12-13.
1,2 Healthcare Financial Management Association
3 Woodworth , Glenn, “2003: The Year of Medical Paperwork Simplification,” Journal of Healthcare Information Management
4,5,6 “A Healthy System,” Technology CEO Council, 2007
7 Pricewaterhouse Coopers
8 http://ahec.health.ufl.edu/chs/2002/Noshows.pdf
9 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1495590/
10 2009 – 2011 Annals of Internal Medicine

Paper referrals have been a long time issue for hospitals, clinics, specialists and general practitioners.  

A breakdown of an average cost per dental / medical paper referral:

  1. Triplicate referral form (3 part form) = $.25 to .45
  2. Cost of copy paper/fax paper (.06 x 19 copies) = $1.14
  3. Cost of ink (.10 x 19) = $1.90
  4. Time filling out referral form, waiting for review, signature, and tracking of referral in excel or on paper, filing and retrieving a document, reviewing document for necessary information, follow up time on phone, and faxing ranges in most offices from 30 minutes to 60 min. per referral.
  5. Does not include lost revenue from missed referrals, liabilities of those lost referrals, reduced patient care quality, potential reputation hit from patients, and cost to search for misplaced documents (Average $125 dollars of labor to find a lost document) (See #1 and #2 from the Healthcare facts section)

Total average cost : $40/referral
Note: These costs can be a lot higher depending on wages of staff and doctors, cost of ink, paper etc…
*We used an average of $50.00 an hour which includes doctor and staff time. (Most practices potentially are much higher considering doctor’s wages average over $100 – $200 per hour)

Lower Cost and Risk

By using an electronic referral software application, costs are dramatically lowered by reducing the hard costs and time needed to exchange and report on referrals.  And most of all the ability to capitalize on quick access to patient no shows and missed referrals that cost the provider potentially many thousands more in lost revenue.

More posts about Referral Management.


How much are you spending per referral?
Ask your staff how much time they spend, you will be shocked to find out the answer.
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