How Much Revenue Are You Losing on Wound Care Referrals?

If you're running an HMO-contracted practice in Florida, you already know every dollar matters. You've optimized staffing, negotiated with vendors, and squeezed efficiency from every corner of your operation. But there's one area where money is almost certainly walking out the door — and most practices don't even realize it.

Wound care referrals.

Every time you send a patient with a chronic wound to an external wound care center, you're transferring thousands of dollars from your capitation pool to someone else's revenue column. And the numbers are staggering.

Understanding the Math

Let's break down how wound care referral costs add up. This isn't theoretical — it's based on real data from Florida HMO practices:

The Typical Wound Care Episode

When you refer a patient with a chronic wound (diabetic foot ulcer, venous leg ulcer, pressure injury, etc.) to an external wound care center, here's what typically happens:

And that's for a straightforward case. Complex wounds requiring skin substitutes, hyperbaric oxygen therapy, or other advanced modalities can easily reach $8,000-15,000.

Scaling to Your Practice

Now multiply by the number of wound patients in your practice:

These numbers hit differently when you realize this money is coming directly from your capitation pool.

Why This Matters for HMO Practices

Under a capitated payment model, you receive a fixed per-member-per-month (PMPM) payment to manage all care. Every external referral reduces your margin. But wound care referrals are particularly painful because:

• They're expensive: Wound care is one of the most costly chronic conditions to manage externally
• They're recurring: A single wound can generate 10-20+ visits over several months
• They're preventable: 70%+ of wound referrals could be managed in primary care with proper protocols
• They affect quality scores: Wound complications can negatively impact HEDIS measures, especially for diabetic populations

The Hidden Costs You Might Not Be Counting

The direct referral costs are just the beginning. There are several hidden costs that compound the problem:

1. Lost Quality Bonuses

Many HMO contracts include quality bonuses tied to HEDIS measures. Diabetic patients with foot ulcers who aren't properly managed can drag down your Comprehensive Diabetes Care scores, affecting bonuses worth tens of thousands of dollars.

2. Increased Medical Loss Ratio (MLR)

External wound care costs drive up your MLR, potentially affecting your contract renewal terms and negotiating position with payers.

3. Patient Leakage

Patients who start seeing specialists for wound care often end up with those specialists managing other aspects of their health. You lose continuity of care — and revenue from other services.

4. Staff Inefficiency

Coordinating wound care referrals, handling prior authorizations, and managing care transitions consumes staff time that could be used for revenue-generating activities.

5. Patient Dissatisfaction

Elderly patients often struggle with traveling to wound centers. Missed appointments delay healing and increase total costs. And frustrated patients are more likely to disenroll during open enrollment.

How to Calculate Your Specific Losses

Here's a simple formula to estimate your wound care leakage:

For a more accurate analysis, pull your referral data for the past 12 months. Look at:

1. Number of unique patients referred to wound centers
2. Total visits per patient
3. Procedures performed (debridements, biopsies, skin substitutes)
4. Time from first referral to wound closure

If you need help with this analysis, we offer free referral audits as part of our consultation process.

What You Can Do About It

The good news: most chronic wounds can be effectively managed in primary care settings with proper training, protocols, and support. Here's the path forward:

1. Assess Your Current State

Before making any changes, understand your baseline. How many wounds are you referring out? What types? What's the average cost? This data drives your strategy.

2. Identify Manageable Wounds

Not every wound needs a specialist. Approximately 70% of chronic wounds — including most diabetic foot ulcers, venous leg ulcers, and Stage 1-3 pressure injuries — can be successfully managed in primary care.

3. Build In-House Capability

This requires:

• Staff training (wound assessment, treatment protocols, documentation)
• Equipment and supplies (minimal investment)
• Clear protocols (when to treat vs. when to refer)
• Quality tracking systems

4. Implement and Monitor

Start with the easiest cases, build confidence, and expand. Track outcomes rigorously to ensure quality stays high while referrals decrease.

5. Consider Expert Support

This is where WCHMO comes in. We help practices build wound care capability quickly and effectively, avoiding the trial-and-error that can cost time and money.

The ROI of In-House Wound Care

When practices bring wound care in-house, the numbers flip dramatically:

With a typical program setup investment of $12,000-20,000, most practices see positive ROI within the first quarter. From there, the savings compound year after year.

Case Study: Real Results

A 4-physician primary care practice in Palm Harbor was referring approximately 55 wound patients annually. After implementing an in-house wound care program with WCHMO:

• Wound referrals decreased from 55 to 17 (69% reduction)
• Annual savings: $152,000
• Program investment: $15,000
• First-year ROI: 913%

Read the full case study: How a Primary Care Practice Added $75K in Annual Revenue

Take Action Today

Every month you delay is another $10,000-20,000 walking out the door. Here's how to get started:

1. Use our ROI calculator to get a quick estimate of your potential savings
2. Schedule a free consultation to discuss your specific situation
3. Request a referral audit to understand your current wound care costs in detail

Your capitation pool shouldn't be someone else's profit center. Let's keep that revenue where it belongs — in your practice.