Everything you need to know about provider referral strategies that work

The playbook for reaching doctor’s offices was pioneered by pharmaceutical companies. Most digital health companies now share that same goal, but lack the expertise to do it. For any business that is providing care delivery, meaning a medical encounter between a provider and a patient, a referral from a primary care physician or another specialist is the ultimate sustainable unlock to growth.

There’s a clear reason for that, which medical device and pharmaceutical companies realized decades ago. Acquiring patients through paid channels, like television advertising, is both expensive and saturated. And even if a patient is intrigued enough by the promotion to talk to their doctor, that might not result in anything. The doctor could push back for a variety of reasons. But if a physician refers that patient to a new therapy or device, and increasingly these days a venture-backed virtual care delivery company, there’s inbuilt trust.

A strong provider referral program also impacts a businesses’ unit economics in a very good way: It’s much better to spend on business development that leads to a steady stream of referrals that continue year-after-year, versus rely on paid channels that will only increase in price over time. Paid marketing is a beast that you have to continue to feed in order to see growth, whereas provider referral programs are all about relationships that compound over time.

Interest in this approach is at an all-time high. According to the results of a recent survey from Bridge, a company that helps care delivery businesses unlock insurance, 47% of patients first use telehealth because their regular doctor offers the option. And 23% get onboarded because their trusted provider — usually a PCP, but sometimes another specialist — refers to them. An example might be a pediatrician recommending Clarity Pediatrics for virtual ADHD treatment, or an endocrinologist suggesting Nourish for telehealth nutrition counseling.

You might be wondering why a provider office would refer to digital health companies at all. Why not just treat them in-house, or send the patient to the local hospital? Well, that’s a fascinating question and a complicated one to unpack. To answer that, and discuss the ins and outs of this strategy, I sat down with Lenny Roth, a former pharmaceutical rep who lived in doctor’s offices for years. Roth’s prior business was entirely focused on helping digital health companies reach provider offices, and he’s advised many of the most successful companies in the space.

Roth, who now leads growth marketing at Candid Health, shared his advice on how to reach provider offices authentically, and without running afoul of the various laws that ensure information sharing is transparent and that doctors are not getting paid to make a referral. We also talked about the specific businesses that have excelled, and those that have struggled. For Second Opinion premium subscribers, let’s dive in.