Lauren Parr is the Product Marketing Manager at RepuGen, an online healthcare reputation management SaaS platform.

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While healthcare organizations employ different types of marketing and advertising strategies to acquire new patients, referrals stand out as an effective way to grow one's patient base.

According to my company's 2021 survey, when searching for a new doctor, 51% of patients find that referrals from family and friends are one of the most important factors in making a decision.

Healthcare practices should have optimized systems in place to ensure they're contacting and nurturing referrals until they become patients.

What Are Referrals In Healthcare?

Referrals are often a simple way to increase patient volume since patients tend to trust their friends, family and referring physicians as much as any online review or star rating by strangers, according to my company's study. There are two distinctive types of referrals that require their own strategic processes: physician referrals and patient referrals.

Physician Referrals

The first type of referrals are physician referrals, which typically occur when a primary care physician refers their patient to a specialist. By definition, they are written requests from one health professional to another health professional or health service, asking them to diagnose or treat a patient for a particular condition.

My company's study found that 52% of patients say that referrals from medical professionals are one of the most important factors when choosing a doctor. Additionally, a 2012 report found that "From 1999 to 2009, the probability that an ambulatory visit to a physician resulted in a referral to another physician increased from 4.8% to 9.3% ... a 94% increase. The absolute number of visits resulting in a physician referral increased 159% nationally during this time, from 41 million to 105 million." If a physician is not utilizing referrals, they could be losing out on a hefty amount of revenue.

How To Set Up A Doctor-To-Doctor Referral System

In reality, doctor-to-doctor referrals are often unorganized, since patients, unfortunately, tend to fall through the system. Even when patients follow through with their referral appointments, the referrals do not always provide value to either party. To help optimize the process to ensure value, consider using an automated referral system to send referrals and track the process. (Full disclosure: My company has built an automated physician referral system.)

When choosing an automated physician referral system, ask the provider:

• About their solution's process for sending referral requests.

• What information the system provides to patients. For example, does it provide everything they need to set an appointment with a physician?

• How the system tracks referral progress.

• What data and analytics capabilities the system provides.

Patient Referrals

The next type of referral is a patient referral, which is when satisfied patients refer their friends, family and other members of the community to a particular doctor or healthcare practice.

Prospective patients heavily rely on referrals from their friends and families, with 51% of them weighing in experiences shared by people they know when they select a doctor, according to my company's research. Moreover, about 75% of female physicians and 70% of male physicians say they get new patients through word of mouth, according to 2017 Medscape research.

How To Set Up A Patient Referral System

There are two primary ways to go about implementing a patient referral program. You can either have your staff verbally ask patients to refer your practice to their friends or family members, or you can utilize a referral solution that can automatically do it for you.

Once you choose a method that works for you, be sure to consider the following to make the most of your patient referral process:

• Ensure that you ask happy patients for a referral and avoid asking for referrals from patients who didn’t have a satisfactory experience with your practice.

• Create a realistic referral plan and document each goal that you seek to achieve. For example, you might want to get three referrals per patient within the next three months or so.

• Utilize incentives, such as discounts or gift cards, when you ask patients to refer you. However, be sure to check if your state laws allow you to offer incentives.

• Place referral-related signs in and around your practice where your patients can easily see them.

• Train your staff on how to approach referrals when they're talking to interested and happy patients.

• Run referral marketing campaigns through emails, text messages and phone calls to ask your patients for referrals.

How To Choose The Right Referral Management System

If you've decided to look for a referral management system (for either patient or physician referrals), a lot of your search will depend on your end goals. Here are a few things to first consider to get the most out of it:

• Integration with your EMR/CRM: To make the referral process as automated as possible and reduce your workload, your referral management system should be compatible with the EMR/CRM software you already use. Make sure the provider confirms that your patient information can be easily transported.

• Analytics and insights: Consider your goals and what analytics and insights you need in order to track progress. For example, are you hoping to increase your number of referrals, improve the outcomes of those referrals or increase revenue from referrals? Ask the provider what analytics they can provide to help you track progress on those goals.

• Cost-effective pricing: Make sure any system you're considering gets the job done and is within your budget.

• Scalability: Do you plan to grow your practice? If so, ask the provider how well it can scale with the growing needs of your practice. The more patients you have, the more referral programs you will need to automatically send out.

Although both physician and patient referrals can be a huge contributing factor to the success of many healthcare businesses, many have not utilized them to their full potential.