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Growing Your Healthcare Business Through Referrals

Aug 20, 2020

If you have clicked through and are reading this article, chances are you own or manage a healthcare business. When you think of dental, family medicine, and chiropractic, you may feel that these practice types have very little in common. However, the value and importance of healthcare business referrals are ubiquitous to all. 

Why Referrals?

Gain New Patients with Healthcare Business Referrals

As an owner or manager, we all always want to grow our business and have a full schedule of patients. Even with a mature practice, you constantly need to be marketing and acquiring new customers to replace customer attrition. One of the most cost-effective methods for any healthcare business to grow is through patient referrals.  

Types of Healthcare Business Referrals

There are generally two main types of patient referrals. One type being from customers and the other is referrals from other practitioners. If you run a specialty practice, the latter is especially vital to your growth. Though, this particular article is focused on how to grow a practice through strong patient relationships and asking those patients to refer your practice to their friends, family, and colleagues.  

Are Referral Programs Legal and Ethical?

At the core, yes! Simply asking for your current patients to refer friends, family or colleagues is absolutely legal and ethical. However, a gray area comes into play with referral programs that guarantee to compensate patients for sending a new patient to you. 

On the federal level, people are often confused and concerned about: 

  • The Stark Law – The Stark Law, however, is concerning a physician self-referral; i.e., do not refer patients to a medical facility for further treatment if you have a financial interest in that facility. It does not touch patient referrals for new patients
  • The Anti-Kickback Act – The Anti-Kickback Act of 1986 covers federal contractors – not medical providers. 

While going into each state regulation is too intensive for this article, we absolutely encourage you to consult with an attorney in your state before choosing to create a formalized referral reward program, especially before providing cash or commission-based incentives. There are states, such as California, that prohibit paying for patient referrals (California Business & Professions Code §650 et. seq.). In addition, check with any professional organization you belong to – while your state may not have laws, your professional organization may have ethical guidelines you are required to follow. 

Who Should You Ask For a Referral?

You want to be somewhat selective on which patients you ask to give referrals – and be sure they will give a positive review! When you ask a patient for referrals, be sure they had a wonderful experience and can really attest to the value and service you can deliver. Although we are sure it never happens, if your staff is having an off day, or you are running behind due to an emergency procedure, any patient that had a delayed appointment or long wait is probably not the best person to ask.  

How to get Referrals?

There are many tried and true methods to obtain patient referrals – but they all boil down to different ways of educating your current patients that you desire new patients, and asking your current patients for referrals.  

Asking for referrals can feel awkward for many people. Start with the simpler options below and work up to asking your patients directly. 

  • Add in-office signage, advising you are accepting new patients. 
  • Create take-home materials to include in your patient goody bags that your patients can share with friends and family. Highlight the basics of your practice, and, if practical, include an offer for first-time clients, such as a free exam. 
  • Create a referral incentive program and highlight it on your in-office signage and take-home materials. If your state allows and you are comfortable doing so, offer rewards such as free or discounted procedures or gift cards. 
  • Develop an “elevator pitch” script for your receptionist to use to request referrals. 
  • Develop an in-office system to track referrals. For example, add a field on your new client paperwork and ask if they were referred to your office. If a new patient completes this field, make a notation in the file of the referrer. 

Support Your Referral Efforts

After you put time and energy into developing in-office signs, take-home materials, and training your team to ask for referrals, make sure you support these efforts and the referred patients can find you! Frequently, when a current patient refers a friend or colleague, they do not give out your phone number – just your name and a general location. Therefore, it is important to ensure that your business listings are up-to-date, your website can easily be found in an online search (for both your practice name and your practitioner’s name, if different), and that your website clearly shows your phone number, hours of operations, location, and insurance information. It is even better if you have patient testimonials, information on who your team is, and more on your website.  

Saying Thank You for Patient Referrals

One of the keyways to keep getting referrals from your patients is easy – simply say “thank you” and recognize when a patient referred a new patient to you. While an email will do the trick, a handwritten note will take very little of your time and money, and it will be more memorable. 

If you live in a state or belong to a professional association that prohibits patient referral reward programs or are simply uncomfortable with a formal program, one option is to provide thank you rewards on an ad-hoc basis instead. If there is no guarantee of a reward – and, indeed, you do not provide them to all patients who refer new patients to you – then you will not run afoul of the law. When you do wish to reward a patient for referring others, gift cards are one of the easiest, yet most motivating, ways of doing so. Streamline your thank-you process by having gift cards on hand, ready to go – check out CardNow, which offers a stash of inactive gift cards to a variety of retailers and restaurants including Amazon, Kohl’s, and Chili’s, that you load through their mobile app, whenever you need a gift or reward. 

We hope these tips will get you started on your own healthcare business referral program, whether it be an official program, or through ad-hoc thank you’s, acknowledging patient referrals can go a long way when it comes to growing your practice. 


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