Losing money - money on fire

How Appointment Reminders Save You Major Money Today—Part 1

When considering using an automated reminder service, you'll want to weigh the initial cost of implementation against possible return on investment by way of improved customer communication and reduced missed appointments. Therefore, while you of course need to consider the initial costs today, it is also essential to consider how and why appointment reminders can save you thousands of dollars tomorrow.

Why patients miss appointments

The simple truth is that patients miss appointments. When asked why an appointment was missed, the standard answer is, “I forgot.” Patients, like physicians, are busy people. Sometimes their schedules change abruptly, leaving them with little time to call and re-schedule an appointment. Or perhaps they simply forget to follow through and give advance notice of a schedule change. In these cases, it is easy to see how a robust reminder solution will alleviate much of the problem.

Direct costs of no-shows

Missed appointments are inevitable, but make no mistake about it—they are costly. Just looking at the numbers, no-shows represent a significant loss of income for a physician. The Medical Group Management Association (MGMA) estimates that medical practices average a 5-7 percent no-show rate, with many having a significantly higher rate than that.

How does that translate for the average practice? Suppose your office averages a conservative two to four missed appointments per day. Assuming that the average co-pay for a visit is $25 and the average insurance reimbursement is $100, those missed appointments are costing your practice $65,000 to $130,000 per year. Looking at your insurance reimbursement rates, you may find that these figures are a bit on the conservative side.

Considering the fact that you schedule appropriate staff coverage for set appointment levels, when no-shows happen, you are also spending money on unnecessary staffing.

Limitations of traditional solutions

A knee-jerk reaction to these loss estimates might include trying to shore up an existing reminder system, which traditionally consists of utilizing postcard reminders or using staff members to make reminder phone calls. But are these the most cost-effective tools at your disposal? Consider this:

Postcard reminder costs and drawbacks

  • The current postal rate for mailing a 4 x 6 postcard is 35 cents.
  • The average cost of postcard printing is currently around 85 cents per card.
  • This means that the cost of mailing just 100 postcard reminders is around $120, not counting the time it takes to address the cards.
  • Thinking of the average patient, when do they receive the postcard? Typically, mail is delivered when the patient is away from home, making it likely that the patient will be reading the postcard after normal business hours. They are thus often unable to take action immediately, and so the patient may forget the reminder before your office opens again. Considering this, postcards are likely not the most impactful reminder your patients can receive.

Issues with manning the phones in-house

If your staff makes reminder calls, it's likely front desk personnel handling this task. Nationally, the average pay per hour for front staff office workers in medical offices is approximately $11 per hour. Assuming a conservative time of three minutes per reminder call, that translates into approximately $55 per 100 calls that your staff makes. Considering that many medical office workers are compensated well beyond the national minimum averages, that figure can increase dramatically.

Add to that the lack of effectiveness of phone calls. Many patients are not home when the calls are made, or may screen their calls. Additionally, with mobile device use becoming more prevalent, it may take additional time for your staff to find the number your patients prefer to use for reminder calls.

Now that you have a clear picture of the both the cost of appointment no-shows and the cost of traditional methods of appointment reminders, it is time to consider how to address these issues, reduce your no-shows, and recoup your losses. Join us for part two of this blog series, which will consider some of the benefits of modern automated systems and how to achieve the kind of ROI you want to see with such systems.

In the meantime, if you would like more information about our suite of reminder products, please contact us for a comprehensive discussion of how we can meet your specific needs.

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