Declining Referrals? The Issue May Be In Your Referral Ecosystem

A few years ago I ran into a surgical colleague who was complaining that his referrals were decreasing.  He was convinced that it was a plot by his competition to steal his business.  He was also convinced that the hospital was in on it.  He described what he was certain was a coordinated attack on his practice, and was informing me that he planned to fight it. He wanted to know if I was aware of any meetings between the hospital and the local surgical groups. I was not, however I had to admit his paranoia around this topic was beginning to concern me.  When I asked him if he had any proof of this, he pointed out a couple of anecdotal cases that, he felt, proved his point.  As far as clear cut evidence or data to support his concerns, there was none.  He was a busy, hardworking surgeon and had been on the medical staff for decades, so I decided to dig into this to see if there was any substance behind the claim.  There was, but it was not what I was expecting.

His referral numbers were slowly decreasing compared to other surgeons on the staff.  What was odd was that it was happening in an almost linear fashion, which was not what I would expect to see if there was some recent conspiracy to take away all of his business.  What was also interesting was that the average age of the physicians referring to him was getting older. The average age of all physicians on the medical staff, however was unchanged.  I looked at a few of the other surgeon’s referrals and identified an interesting pattern.  Surgeons tend to get referrals from other physicians who are similar in age.  Think of it as a referral network cohort.  Most of the referrals tended to come from physicians who are plus or minus five years in age of the surgeon who they refer a patient.  The surgeon described above was in his early 60’s.

What was happening was that the older physicians who were previously referring patients to him were now retiring, winding down their practice, or dying.  He really wasn’t getting as many referrals, but it was not for the reasons he assumed.  It was a consequence of the referral ecosystem where his practice was based.  We forget that we develop relationships with those who refer patients to us, and our natural tendency is to develop relationships with those who are closer in age.  This works great when our main referral network is at the peak of their careers.  It is not so good for those who wish to remain busy at a time when their referral network is winding down their practice.  So if you are approaching retirement age, and are seeing less referrals, it is probably not some great conspiracy, just a natural consequence of your referral

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