Reducing referral leakage : an analysis of health-care referrals in a service ecosystem

Purpose: The purpose of this paper is to address a critical problem for health-care organizations: patient referral leakage. This paper explores the nature of patient referrals by examining how health-care providers’ breadth and depth of connectivity within a hospital network and identification with each other influence the likelihood of future patient referrals. Design/methodology/approach: The data was collected by using a multi-sourced data set from the health-care industry. The proposed model was tested by using logistic regression to determine the likelihood of a primary care physician’s (PCP) referral to a specialist within a hospital network. Findings: A model linking provider connectivity to examine co-creation practices in the form of patient referrals is tested. Results indicate that patient referrals are multidimensional. A PCP’s likelihood to refer to a specialist within the hospital network is influenced by the breadth and depth of connectivity of each provider. Research limitations/implications: This investigation extends service ecosystems to patients, health-care providers and hospital organizations, making it the first to explore how different degrees of connectivity (breadth of referral partners and depth of exchange) between and among health-care providers influence the likelihood of future patient referrals. Findings complement extant literature on service ecosystems by empirically showing that provider relationships are interdependent and rely on the mutual coordination of benefits within the entire health-care organization and network. Practical implications: Managers and health-care professionals can use the framework to build and strengthen relational ties/alliances within a service organization. An ecosystems perspective reduces patient referral leakage through enhanced organizational performance, competitive advantage and continuity of care. Originality/value: The authors offer a novel view of referral relationships using hard-to-access proprietary data. Moreover, this study responds to the need for transformative service research by offering service researchers and policymakers a means to enhance consumer well-being. The main contribution of this study is a framework to gain a better understanding of patient referral relationships between employees (i.e., health-care providers) in an organization, thereby affording an opportunity to bolster operational efficiencies, improve clinical outcomes and strengthen referral pathways. By viewing health-care networks through a service ecosystems perspective, contextual boundaries and the relative power of relationships are also identified. The novel use of rarely available hospital data in this setting helps explain how patient leakage compromises the health of the ecosystem and its members.