Man calculating the cost of missed appointments

Why No-Shows Cost You Money (and How to Avoid it)

For doctors, dentists, and other healthcare providers, no-shows are a fact of life. It’s simply unrealistic to think any medical practice will have zero missed appointments. That said, there’s a big difference in lost revenue between a practice that has a few no-shows a month and one that has a few every week—or every day!

In this post, we’ll explore why no-shows cost your practice money, look at how to calculate an accurate no-show rate, and explore why an appointment reminder service is a low-cost way for you to quickly start saving money and time.

Automated appointment reminders (via text message, email, and/or phone calls) have been shown to reduce no-shows by 90% or more within a matter of days. But before we get into why that’s the case, let’s look at why no-shows are so expensive and why no-show fees aren’t a real solution.

The cost of no-shows: crunching the numbers

A study by one medical college found that while no-show rates vary by practice, most often they’re in the range of 5% to 10%.

Let’s explore a case study—a doctor’s office that has:

Using a no-show rate of 10%, we get this calculation:  

17 x .10 = 1.7 missed appointments per day

Less than two no-show per provider per day doesn’t sound so bad, right? But let’s crunch the numbers, recalling that we need to multiply that .85 no-show rate times four and multiply that by the average revenue of $300:

1.7 x 4 x $300 = $2,040

“Less than two no-show per 17 scheduled visits” doesn’t sound so bad. But “My practice is losing over $2,000 a day to no-shows” sounds awful, right?

By sending automated notifications about upcoming appointments, an appointment reminder service can eliminate the large majority of no-shows. It converts them to confirmations or cancellations, with the latter being filled by new patients.

Let’s say you sign up with an automated patient appointment reminder service like Reminderly, and it eliminates 90% of your shows. Bear with me for one last calculation:

.9 x $2,040 = $1,836

At the cost of only dollars per day, you’ve just saved your practice about $1,800 dollars per day! Not to mention the cost of following up with those no-show patients.

No-show fees are better than nothing—but they’re not a real solution

Looking at the calculations above, you might be asking, “What about the no-show fees that we charge?” That’s a fair point, and any doctor’s office should consider the pros and cons of charging such fees. But again, let’s crunch the numbers and see how things really look.

Let’s say your office charges a $50 fee for cancellations made with less than 24 hours notice, which of course includes all no-shows. In that case:

6.8 x $50= $340

You are still losing about $1, 500 per day to no-shows. And in reality, you may choose to waive some of those fees. And, you won’t even be able to collect all of the fees that you try to collect. If we call those exemptions and uncollectable fees 20% of the cases, such that you’re collecting no-show fees on 80%, then:

.8 x $340 = $272

That is a fraction of the $1,800 we calculated above, and it gets worse: studies have shown that patients who miss even a single appointment are significantly more likely to miss further ones or to stop coming to your practice altogether. They’re also more likely to write a negative review online. Which means that, even if you collect a no-show fee, there are hidden costs to your future revenue.

I’m not saying your practice shouldn’t charge no-show fees. It varies from practice to practice and is something you should consider carefully. It’s clear though that charging fees is only a partial solution to the problem.

Patient satisfaction is higher at medical practices that use an effective appointment reminder system. Both the clients and the staff are less likely to have to deal with the hassle of missed appointments, no-show fees, and after-the-fact rescheduling.

How to calculate an accurate no-show rate

Given how costly no-shows are, it’s crucial to calculate an accurate no-show rate for your practice. Here’s how to do that:

Collect enough data. Eventually, you’ll want to track your no-show rate on a continuous basis so that you can make tweaks to lower it as much as possible. But if you’re just getting started, make sure to track no-shows over the course of several months (as opposed to, say, just a few days or a week) so as to account for random fluctuations and seasonal variability.

Do not include cancellations or rescheduled appointments in your no-show rate. Cancellations that are made with sufficient notice allow you to refill that slot. And rescheduled appointments are simply moving a paying patient from one slot to another. Adding these types of appointments into your no-show rate will result in bad data.

On the other hand, you do need to include last minute cancellations in your no-show rate, as these cancellations usually leave too little time to refill the slot with someone on your wait list.

Do not count no-shows as cancelled appointments. This is the flip side of including cancellations or rescheduled appointments as no-shows. If someone misses their appointment without having cancelled with sufficient notice, that is a no-show, not a cancellation.

Use the no-show rate equation:  no-shows / scheduled appointments = no-show rate

Using our case study from above, which was 1.7 no-shows per 17 scheduled appointments:

1.7 / 17 = .1  —  a 10% no-show rate.

Do not include walk-ins in your calculation. Walk-ins were not scheduled appointments to begin with, so they shouldn’t be considered as part of the no-show rate.

Why automated appointment reminders are an effective solution

Once you’ve established an accurate no-show rate for your office, you’re in a great position to see how automated appointment reminders effect that rate. Reminderly’s clients almost always find that their no-show rate reduces substantially, and in a relatively short period of time. With our easy-to-use templates and intuitive automation, you can be sending out effective medical appointment reminders in no time.

A good appointment reminder software will use a variety of methods to support patient communication and thereby improve patient experience. With Reminderly, you can customize the service to use the right mixture and sequence of text reminders, email reminders, and phone calls. These reminder messages will mostly function as appointment confirmations, as the majority of patients will confirm their appointment—and appreciate the reminder.

For those that need to cancel and reschedule, however, they can do so in real-time using Reminderly’s two-way communication. Our service easily integrates with your scheduling software or online booking system (whether that’s Google Calendar, a spreadsheet that you update, Office 365, Calendly, or others). And there are a variety of ways that patients can communicate with your office to reschedule.

Added benefits of an automated appointment reminder system

Lowering that pesky no-show rate is of course the main purpose of any appointment reminder service, but it’s not the only benefit. Others include:

Getting patients to fill out paperwork in advance. SMS and email reminders can also embed links to the paperwork you need from your patients, and many of them will appreciate having the chance to do it ahead of time rather than in a rush at the start of their appointment.

Reminding patients of other prerequisites. Maybe your patient needs to avoid eating for several hours before a certain test, or perhaps they need to contact a different medical practice to ask for a transfer of records. These types of prerequisites can easily be fitted into a reminder message or become a pre-set sequence of messages for certain types of patients.

Notifying your clientele of changes. With the capacity to contact all of your patients or segmented lists of them, Reminderly can help you notify your clientele of staff changes, pricing changes, location changes, special events or offers, and more.

Improve patient engagement to reduce anxiety. Anxiety is one of the top reasons why patients skip appointments. They may be worried about the cost, afraid of a bad diagnosis, or simply nervous in general about the appointment.

There are lots of ways to calm patient anxiety, and one of them is simply to empower patients to communicate with your practice. That can be as simple as confirming their appointment time, or it might be something more complex like asking questions in advance. Either way, an automated appointment scheduling service like Reminderly provides the platform for your patients to hear from you and be in touch with you in ways that may soothe their concerns, which will lower the likelihood that they don’t show up to their appointment.

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