Insights on Patient Referrals: The Not-So-Secret Weapon for a Growing Physician Practice

Insights on Patient Referrals:
The Not-So-Secret Weapon for a Growing
Physician Practice

Aboutr8oPar8o
 par8o is named after the
Italian economists, Vilfredo
Pareto who first defined the
concept of a “Pareto
Efficiency” - a system is able to
maximize resource utilization
for each and every participant.

 par8o seeks to introduce
Pareto efficiency to the
healthcare industry, improving
patient choice and access to
healthcare while lowering
costs.

2012 Confidential | 2

par8o surveyed 200 physicians…

You won’t believe what they had to say
about patient referrals…


Physicians Understand the
Importance of Referrals
78% of physicians surveyed consider new patient referrals very or extremely important

Importance of New Patient Referrals
on a Scale of 1 to 5
(1=not at all important; 5=extremely important)
46%

32%

14%

4% 4%

1 2 3 4 5
Notes:
Par8o survey, Dec 2011
N = 94 PCPs, 101 Specialists


Referrals Important to All MDs
87% of specialists and 68% of PCPs consider referrals extremely or very important

Consider New Patient Referrals
Extremely / Very Important

87%
68%

PCPs Specialists

Notes:


Nearly All Physicians See Referrals
96% of physicians see at least one referred patient each week and
30% see 41 or more referred patients each week,
with specialists seeing more referrals than PCPs

Referrals Per Week
17% 17%
15%
14%
13%
12%

7%
4%

0 Referrals Per 1 to 5 6 to 10 11 to 20 21 to 30 31 to 40 41 to 50 51+
Week

Notes:


Referrals Are Key to a Growing Practice
In 41% of practices, more than half of new patients come from referrals

Percentage of Total Patients
Starting As Referrals
23%
21%
18% 18%
17%

0% to 10% 11% to 25% 26% to 50% 51% to 75% 76% to 100%

Notes:


Specialist Practices Know the Upside
of Patient Referrals
65% of specialists say their practices generate more than half of new patients from referrals

Percentage of Specialists’ Total
Patients Starting as Referrals
Mostly
Referrals
35%
30%

18%
15%
Few
Referrals

0%
0% to 10% 11% to 25% 26% to 50% 51% to 75% 76% to 100%
Notes:


In Larger Practices, More Patients
Come From Referrals
In most practices with more than 20 physicians, more than half of
new patients start as referrals

Percentage of Total Patients Starting As Referrals

30%
39% 42% 50%
52%

51% to 100%
0% to 50%
70%
59% 53% 50%
38%

1 to 5 MDs 6 to 10 11 to 20 21 to 100 101+

Notes:


Referrals Differ by Practice Type
Physicians working in hospital-based private practices and as employees in
offices or clinics see more patients coming from referrals than those
who work in private offices or as employees at hospitals

Percentage of Total Patients Starting As Referrals

36% 38%
50% 53%
51% to 100%

0% to 50%

60% 59%
39% 47%

Hospital-Based Employed
Hospital-Based Private
Office/Clinic Employed
Office/Clinic Private

Notes:


Average Referral Worth Estimated at
Almost $5,000
Physicians believe each new patient may generate an average of $4,553 over the course of
their relationship with the practice, with both PCPs and specialists estimating a lifetime
value of over $3,000

Average Lifetime Revenue Generated
by One New Patient

$5,734
$4,553
$3,417

Total PCPs Specialists

Notes:


Referrals Worth Most in the East
With an average revenue of $5,414, new patients have the highest estimated lifetime value in
the East vs. a low of $2,824 in the South and around $3,000 in the West and Midwest

Midwestern MDs
estimate the lifetime
value of a new patient Eastern MDs
Western MDs estimate the estimate the
value of a lifetime new at $3,043
lifetime value of a
patient at $3,346 new patient at
$5,414

Southern MDs estimate the
lifetime value of a new patient
at $2,824

Notes:


Referrals Translate Into Big Income

…which means that 1 week’s
…say each newly referred worth of referral patients has
Physicians working in patient brings an average an overall potential value of…*
practices that see… lifetime value of…

1-10 referred patients $6k $6k-$60k
per week

11-30 referred patients
per week
$4k $44k-$120k

31-50 referred patients
per week
$3k $91k-$150k

51+ referred patients
per week
$4k $200,000 or more
*Potential value multiplies average lifetime
value estimated by number of referred patients
Notes: seen per week; Physicians who see lower
Par8o survey, Dec 2011 numbers of referrals per week place a lifetime
N = 94 PCPs, 101 Specialists higher value on each referral


Referrals Are Big Business
Savvy physicians place a great emphasis on patient
referrals as a primary way of growing their practices

Par8o will build on that

The first step is Referrals. Reinvented.


par8o, Inc.
Thank You

Learn more:
http://www.par8o.com


Insights on Patient Referrals: The Not-So-Secret Weapon for a Growing Physician Practice

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