Patient outflow is one of the few levers health systems can pull to materially improve financial performance without necessarily adding capacity, entering new markets, or waiting years for returns.
Health systems have long treated patient outflow — generally defined as patients being discharged from a unit or facility — as a loss to be contained: lost referrals, missed follow-up care, fragmented care pathways, and eroded margins. That framing understates the scale and urgency of the issue. Outflow is not a marginal operational concern; it is a near-term economic opportunity hiding in plain sight.
Consider leakage, a subset of outflow where patients leave the health system entirely for a competitor. In some markets, up to 70% of specialty care spending is leaving the home network, particularly across high-value ambulatory and specialty services, according to an Oliver Wyman analysis. Similar data exists for primary care patients who opt to get specialty care elsewhere. That’s a result of health systems failing to standardize and hardwire clinical pathways as they’ve acquired primary care groups.
But this isn’t just about finances and economics. Reducing leakage also improves continuity of care, strengthening clinical outcomes and satisfaction along the way. It’s not surprising that retention and navigation have emerged as top priorities for health system leaders focused on growth and margin stability, as well as improving patient and clinician experience.
A Forward-Looking Growth Mindset Requires Two Shifts in Thinking
Traditional outflow and leakage analyses look backwards by design, documenting where patients have already left and quantifying the resulting loss. A growth-oriented approach looks forward, focusing on where retention is feasible, where continuity matters most, and where targeted intervention can deliver meaningful economic and clinical return.
That shift rests on two changes in how outflow is understood and managed. First, not all outflow represents failure. Some patient movement outside the system is clinically appropriate or operationally unavoidable, driven by access constraints, the need for specific clinical services, or long-standing clinical relationships. Treating all outflow as a problem to be solved can overstate the opportunity and make the challenge appear intractable.
For example, while some urgent or episodic care may leave the system with limited economic impact, persistent leakage in schedulable, high-margin services, such as imaging, procedures, or specialty consults, signals a more consequential and addressable problem. Proactive health systems will distinguish true leakage from appropriate flow: diagnosing, at a granular level, where retention materially matters and where targeted interventions can realistically reduce avoidable outflow.
It's also imperative to understand that patient movement across health systems is shaped by the decisions patients and care teams alike make along the care journey. The tendency is to think those decisions are ideological or deliberate, but they are more likely to be pragmatic responses to access, timing, clarity, trust, and operational friction at key moments.
Viewed this way, inflow and outflow are signals of how effectively a system supports decision-making when it matters most. Managing flow therefore requires redesigning key decision points so that high-value, in-system care is the easiest and most reliable path to follow.
Seeing Outflow Through Three Lenses
Leading systems move from insight to action by integrating three complementary lenses:
- Data lens: Establishes where outflow occurs, which service lines and cohorts are affected, when it happens along the care journey, and the associated financial impact. For example, identifying consistent drops in referral or specialty follow-up care reveals where value is lost before care is delivered. This lens defines the pattern, but does not explain behavior on its own.
- Market lens: Places outflow in context. Competitive density, payer and network design, mobility and access patterns, and community demographics help distinguish system-driven leakage from market-driven behavior. For example, understanding commute times or local access alternatives can explain why patients bypass in-network options.
- Human and community lens: Trust, clinician reputation, referral habits, experience breakdowns, and local norms shape how patients, physicians, and care teams behave within specific communities, and ultimately determine where care flows. For example, long-standing referral relationships or perceived reliability often outweigh formal network alignment. This lens explains why patterns persist.
Combining insights from these lenses will help health systems bridge the gap between identifying outflow and designing interventions that actually change behavior.
Five Actions to Turn Outflow into Growth
Savvy health systems translate insight into impact by focusing on a small number of targeted actions, applied in deliberate progression, from identifying where value is at risk, to understanding why it occurs, to intervening where behavior can actually be changed. Each action reinforces the others, shifting organizations from reactive reporting to active flow management.
1. Prioritize and diagnose friction, not just leakage: Move beyond accounting for outflow to first identify which leakage is addressable and economically meaningful and then understand why it occurs. Focus on friction at key transitions, such as referrals, discharge, specialty follow-up that determines where delays, confusion, or access barriers prompt patients and clinicians to look elsewhere.
2. Build integrated flow analytics: Combine claims, electronic health records, scheduling, and referral data to understand both inflow and outflow across the care continuum. Move beyond retrospective reporting to develop leading indicators of outflow risk, such as access delays, referral behavior, missed follow-ups, and care fragmentation, and surface those insights to care teams so they can act on them. When clinicians have timely, trusted visibility into capacity, access, and pathways, outdated assumptions give way to better in-network decisions while value is still recoverable.
3. Focus where it matters most: While leakage may be widespread, the opportunities for meaningful value capture tend to concentrate in a limited number of ZIP codes, clinics, and physician panels. Prioritizing these micro-markets allows systems to avoid broad, low-impact initiatives and instead deploy targeted interventions that are aligned to and resonate with providers’ needs. These are the opportunities where returns are highest.
4. Design interventions around how people actually behave: Effective retention strategies account not only for patient needs, but also for clinician referral habits, team workflows, and local norms. Trust, reputation, and ease of navigation influence behavior as much as access or quality metrics and must be addressed directly.
5. Make the next best action the easy action: Retention improves when patients and clinicians are guided, clearly and consistently, toward the most appropriate in-system option at the moment decisions are made. Pairing high-value referrals and services with targeted navigation, follow-up, or concierge-style assistance can ensure that care is scheduled and completed quickly. This can include care teams following up or personalized chatbot messages, depending on patient preference. Tracking that patients show up to the follow-up care or referral is essential.
Outflow, while a simple metric to understand, requires an informed and nuanced response. And it requires a strategic capability to manage on an ongoing basis. Health systems that build and apply that capability can shift near-term economics, strengthen care continuity, and sharpen competitive advantage without waiting years for results.