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Leakage: The problem your health system has no plan for

Health systems are coming to terms with the inevitable shift to value-based care. Despite efforts to limit healthcare spending, costs have continued to rise at alarming rates. According to the Kaiser Family Foundation, health expenditures in the United States have nearly doubled over the past 20 years. Today, the United States spends more than $4 trillion on healthcare annually, or roughly $13,000 per capita.1

Spending at that level on healthcare is not sustainable. As the baby boomer generation continues to become Medicare eligible, the funding cliff is likely coming sooner than we all suspect.


In reaction to this looming crisis, the Centers for Medicare & Medicaid Services (CMS) has instituted programs to encourage healthcare providers to focus on patient wellness, guide patients to get care in the appropriate setting and treat chronic conditions. Many providers have risen to this occasion, starting accountable care organizations (ACOs) and focusing on value-based purchasing (VBP) incentives.


However, for many health systems, there is a massive liability that interferes with a provider’s ability to achieve the goals of reducing costs through wellness and appropriate utilization. That problem is called leakage. Leakage occurs when patients leave a provider’s network to get care.


When a patient exits your network to seek care elsewhere, providers lose that patient’s health data, limiting their ability to effectively manage the patient’s health or chronic conditions. Since ACOs prioritize population health management and tie financial incentives to a provider’s success in this area, leakage poses a significant concern.


Further, leakage can lead to a patient seeking care from providers who may still be operating in a fee-for-service (FFS) model. In this case, the incentives are reversed, increasing patient utilization of healthcare services. ACOs must do all they can to keep their population inside their network to have, at bare minimum, visibility into the behavior of the population for which they are responsible.


Often, leakage is not caused by clinical or quality failures. Instead, leakage happens when patient experience expectations are not met.


When I led patient experience for a large health system, I was surprised to see that our community trusted the doctor less — and social media more — for questions about their care as they got deeper into their patient journey. When patients experience service gaps, leakage starts to happen as they consider alternatives.


Gaps in the patient experience that cause leakage include:


  1. Poor handoffs between providers
  2. A lack of communication with the patient
  3. A lack of human-centered design in the patient journey.

Let’s examine how patient experience gaps lead to leakage and how advanced technologies can increase efficiency and improve the patient experience to address this looming crisis.


Poor handoffs

Poor handoffs are all too common in healthcare. Most practices still use outdated paper referrals or archaic technologies that rely on the patient making their next appointment themself. Some health systems use a call center to help the patients schedule their next appointment, but they usually suffer from poor availability (during work hours when most patients are also working), appointment scheduling delays and subpar customer service. When patients face these points of friction, they start shopping around for alternatives, usually with the help of Google and social media.


But it doesn’t have to be this way.


Moving to electronic referrals gives both the referring provider and the specialist an opportunity to, at minimum, share data about that patient in two ways. The lack of interoperability between systems is a barrier, but not one that is insurmountable. At minimum, sharing clinical data — including test results or results of a procedure — should be shared.


A lack of communication with the patient

A lack of communication between a provider and a patient is also a cause of leakage. Most practices are not set up to proactively communicate with their patients. Other than appointment confirmations, most practices are only set up to respond to patient questions. These inquiries commonly come in via telephone (not other modern messaging systems like SMS text), which is inconvenient for the patient and inefficient for the practice. By not proactively communicating with patients, patients have a hard time adhering to their instructions.


Instead, imagine a practice that proactively communicates with patients who have chronic conditions. I think about my parents, both of whom have type 2 diabetes. They got their diagnoses and were given medication and a paper referral to take a class. After that, their interactions with their physicians occurred only when they felt ill or had a problem.


In a proactive communication environment, my parents would get weekly messages from their provider that would share tips or other instructions to help them change their lifestyle. In addition, my parents would have some remote data monitoring, allowing their provider to reach out if their data was trending in the wrong direction.


A lack of human-centered design in the patient journey

Finally, there is a general lack of human-centered design in patient care. Hospitals are notoriously hard to navigate. Medical practice visits can include long wait times in waiting rooms and not enough time with the provider. Generally, practices are set up to maximize treating a high volume of sick patients, not spending the time to keep patients well. When patients face a poor customer experience, they might not prioritize punctuality for their appointments or may leave during delays.


Again, this problem can be managed and solved with existing systems and technology. For example, the Stanford school has helped to teach and popularize a human-centered design methodology. Combining human-centered design with technology that cares for patients on their own terms can transform the typically lackluster patient experience in most hospitals. This starts with an awareness that most patients interpret the quality of their care through the way they experience their care. It is usually the only way that most patients can understand the quality and effectiveness of their care.


Final thoughts

These three issues — poor handoffs between providers, a lack of communication with the patient and a lack of human-centered design in the patient journey — cause leakage from clinically integrated networks (CINs) and ACOs. This undermines their ability to contribute to reducing the total cost of care in the United States. Technology can be deployed to minimize leakage by improving handoffs, proactively communicating with patients, especially those with chronic illnesses, and reducing service failures. In this way, having a well-designed patient journey could be one of the more impactful strategies for a practice to achieve their incentives and improve community health across the country.



  1. Telesford I, Rakshit S, McGough M, Wager E, Amin K. “How has U.S. spending on healthcare changed over time?” Peterson-KFF Health System Tracker. Feb. 7, 2023. Available from: https://bit.ly/3T76Dma.

Written By

Jonathan Sachs, MBA, FACHE, ACC

Jonathan Sachs, MBA, FACHE, ACC, is the CEO of WUWTA™, an emerging patient/customer experience and engagement platform that is revolutionizing communication between doctors and patients. Sachs previously served as the lead executive for patient experience in two large healthcare systems: VP and CXO at Robert Wood Johnson University Hospital in New Jersey, and VP of Experience Transformation at Adventist Healthcare in Maryland where he led patient experience, digital health and innovation.

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