It takes time and patience to build agency referrals

Simple referral process keeps sources happy

Successful marketing for home health agencies doesn’t require large budgets, billboards, radio and television commercials, or frequent newspaper advertisements. It does require a commitment to customer service, targeted marketing efforts, and the support of all staff members.

Before you develop a marketing program or hire a marketing person, make sure your agency provides the best customer service possible, says Michael Ferris, chief executive officer at Access Health Education, a consulting firm in Chapel Hill, NC, that specializes in marketing and customer service programs for home health.

"Your current patients, staff, and caregivers are a good source of referrals, so you have to make sure that they are happy with the agency," he explains.

In fact, Ferris recommends that rather than rely upon only one person to market your agency, turn your entire staff into marketers.

"Give all of your employees business cards and encourage them to distribute them to people they meet who either need home health now, or might need it in the future," Ferris says.

Not only do you increase the number of people who will hear the name of your agency but you also create a great sense of pride among the staff, he adds.

While professional staff members often have business cards, your billing staff, receptionist, and home health aides may never have had one, points out Robert Fazzi, president of Fazzi & Associates in Northampton, MA.

"I had one client who told me that one of her home health aides actually cried when she was given her own cards," he says.

The business cards make it easy for an employee to talk with a neighbor whose husband might need home health after a hospital stay because the employee can say, "The nurses at my agency are great, and if you need home health, here’s the telephone number you can call," Fazzi explains.

The neighbor is more likely to call her friend’s agency because there is a personal connection, he adds.

A marketing person for the agency is an important role, Ferris says. "Someone has to coordinate marketing efforts and make calls on referral sources, but a manager needs to make sure the marketing person is also part of the team," he says.

"This means that the marketing office needs to be in the midst of the agency, not down the street in a vacant office," Ferris explains.

What to look for in a marketing position

While a clinical background might be helpful for a marketing person, it is not necessary, Ferris says.

"The person must present [himself or herself] well, be ethical, focus on delivering consistent good service to referral sources, and understand how to sell an intangible product," he explains.

The marketing person needs quick access to a clinical person in case a referral source has a clinical question, Ferris adds.

Because marketing is different from other activities in home health, some agency managers are uncomfortable supervising them.

"Marketing people should be responsible for reporting how many calls they make, how many referrals come from those sources, how much time they spend on follow-up with referral sources, and in general, how they spend their time," Ferris says.

Managers need to review these reports and make sure that the marketing person isn’t wasting time by visiting "friendly, fun offices" rather than making a tough cold call or visiting physician offices that are less friendly, he points out.

Track conversion rates

As important as tracking the number of referrals from sources, be sure to track the conversion rate, Fazzi says.

The conversion rate reflects the number of referrals that turn into admissions, he explains. "Our research has shown that conversion rates range from 75% to 98% for home health agencies," he says.

The financial incentive to improve conversion rates is significant since inappropriate referrals still require a nurse to visit the patient for an assessment, Fazzi says.

"If a nurse’s assessment visit costs you $104, and the nurse discovers that the patient is not an appropriate referral, you lose money," he points out.

If your agency admits 2,500 patients each year, but you are only converting 95% of your referrals to admissions, you’ve spent $13,000 on assessments for inappropriate patients, Fazzi explains.

"If you only convert 85% of your referrals, the loss increases to [more than] $41,000," he adds. That’s a significant impact on an agency, so we took a look at how agencies can improve those conversion rates," he says.

First, you have to remember that developing a referral source means developing a relationship, Fazzi points out. This requires time, communication, and effort on the home health agency’s part to meet the needs of the referral source, he explains.

Tips for developing a good relationship include:

• Have a clear admission policy.

Make sure the referral source knows which patients fit your admission requirements, Fazzi says. Educate the physician, the office staff, or the hospital discharge planner as to what services you offer, he adds.

• Make it easy for the referral source.

"Ask your referral source how he or she prefers to handle a referral," Ferris says. Set up a special telephone line, a dedicated fax line, or even a specific person to receive referrals.

Keep the referral process simple and don’t require that a huge document filled with details accompany the referral, Ferris says. A one-page fax cover sheet should be enough, he adds.

Also, set up a "care plan" for the referral source, he suggests. Build a profile after asking the source for suggestions on how the agency can make it easy.

Find out if the source wants reports on a weekly, monthly, or as-needed basis; if the reports should be hand-delivered or mailed in a special envelope; or how the physician should be reached after hours or on weekends, Ferris explains.

Then make sure the file on the referral source is accessible by any person who has contact with the source, he adds.

Answer the phone!

Remember, too, that discharge planners and physician offices will move on to the next agency if anything causes difficulty or delay with the referral, Fazzi says.

"We found in our surveys that if a telephone line is busy, if a person who can’t take the referral answers the line, or if they get an answering machine, the referral source just hangs up and calls the next agency on the list," he says.

• Respond quickly.

Send a note by mail or fax to your referral sources, letting them know you received and appreciate the referrals and be specific, Fazzi says.

You can say that you saw the patient within 24 hours of receiving the referral, or that you already have scheduled their assessment visit, he says.

Whichever way you handle it, be sure to show that you responded promptly and efficiently, Fazzi adds.

• Survey your referral sources.

Be sure to conduct regular surveys to see how you’re doing, Ferris says.

"Send a cover letter along with a list of the patients who came from the referral source and include a simple one-page, multiple-choice survey," he says.

Include at least one open-ended question such as "If you could change one thing about how we work with you, what would it be?" You also can change the open-ended question to gather information about potential success of new services such as pain management or pediatric care that you might be investigating, Ferris explains.

• Have senior management available for complaints.

Make sure that senior management is accessible if the referral source has a problem or a complaint, says Ferris. By giving senior managers’ direct line, pager, and cell phone numbers to a referral source, you’re saying that commitment to customer service starts at the top in your agency, he says.

• Differentiate your agency.

Offer services that other agencies don’t offer, Fazzi says. Promise response within 24 hours, have your referral line open until 6 or 7 p.m. on Fridays, schedule weekend assessment visits, or add services that are not available in the community, he says.

Also, home health agencies that are a part of or affiliated with a hospital should let the discharge planners know that they don’t just assume the hospital’s patients are coming to them, Ferris says. "Let the discharge planners know that you are going to treat them as well as you treat other referral sources," he says.

• Talk about your agency.

In addition to educating physician offices and discharge planners, be sure you go to the community, Fazzi says. Community organizations such as the local Rotary Club always are looking for speakers and are a good forum to let people know what you offer, he says.

No matter how you market yourself, be sure the commitment to customer service always is there, Ferris says. "You want your agency to be the agency to which you would refer your own friends and family."

[For more information about marketing your home health agency, contact:

  • Robert Fazzi, President, Fazzi & Associates, 243 King St., Suite 246, Northampton, MA 01060. Telephone: (413) 584-5300. Fax: (413) 584-0220. E-mail:
  • Michael Ferris, Chief Executive Officer, Access Health Education, 103 Dorset Point, Chapel Hill, NC 27516. Telephone: (919) 933-6026. E-mail:]