Therapy Clinic Profitability: Achieve <10% Late Cancellations/No Shows

Cancellations and no-shows invariably depress clinic profitability. A “cancellation” is an appointment that is cancelled prior to scheduled treatment time. A “no-show” is when a patient fails to report for treatment without notice.

Depending on the type of therapy your clinic administers, your therapists will likely average 7-10 patient treatments per day. Some forms of therapy permit higher volumes, so a cancellation/no-show is a smaller proportion of overall business and not quite as detrimental to clinic profitability.

Practices that do not work to reduce cancellations and no-shows can find themselves with cancellation rates between 15% and 30%. That is an unacceptable level of openings in your schedule.

The cost of cancellations and no-shows

When a patient cancels a scheduled appointment or fails to show up, several “costs” are incurred by the clinic, its ownership, and its staff. Some of these costs are financial, but some are a less tangible.

Financial costs

If your average Net Collections per Patient Visit is, let’s say, $120, then a cancellation forfeits that visit’s revenue of $120. That is the “opportunity cost” of a lost patient visit. But the financial pain doesn’t stop with the lost revenue. That now empty slot in your schedule still costs the payroll dollars of any idled staff you had scheduled to treat that patient. You still have the Fixed Costs of running the clinic (e.g. rent, utilities, etc.) that now must be supported by a lower revenue stream, thus reducing the clinic’s overall profitability.

Other costs

When patients miss scheduled appointments, their treatment plan is disrupted. That impacts the patient’s treatment outcomes. When a patient frequently misses scheduled appointments, the therapist is faced with barriers to accomplishing treatment goals. It is difficult to evaluate the success of the treatment plan, when its not provided in a consistent manner.

Methods to reduce your clinic’s cancellation and no-show rate

Studies have found correlations between certain demographics and a propensity to not show up for an appointment. These studies indicate that the following groups are at higher risk of cancelling or not showing for appointments:

• younger adults
• women
• individuals of low economic status
• patients who are insured by Medicaid (versus patients who are insured privately)
• people who are working with first year residents (versus individuals scheduled with providers who are more experienced)
• individuals who are provided with appointment schedules differing from their desired date and time

Numerous studies and documented efforts have been conducted assessing the effectiveness of various techniques used in healthcare to minimize cancellations and no-shows. Here are the most commonly-practiced techniques to minimize Cancellations/No-Shows.

Double booking patients

A method within the traditional model, double booking compensates for the inefficiencies within the scheduling system. More than one patient is intentionally assigned to specific time slots throughout the day. This is an attempt to cover for missed or cancelled appointments. Double booking patients can help in the recovery of lost time and expenses. However, it can also cause extended waiting periods for patients, adding pressure to the staff, and potential payment of over-time. This scheduling method can also result in increasing therapists’ stress levels and reducing time for completing documentation and related duties. Therapists within the clinic often cite discontent regarding secondary duties and the lack of time provided to complete them.

Reminder systems

Medical facilities have invested time and resources into the creation of reminder systems.  Often patients will receive a reminder phone call or text generated by a Clinic’s EMR software or Clinic staff themselves.  In most cases, such a reminder system can improve attendance rates by 15% or more.

Penalizing late cancellation

To reduce the rate of missed medical appointments, some therapy practices have implemented late cancellation policies. The patient is charged a late cancellation fee for failing to attend medical appointments or for failing to provide 48-hour notice. Late cancellation fees usually fall into the $25-$30 range.

Exit interview after first appointment

Patients who understand the connection between medical compliance and personalized goals oftentimes make more informed decisions. One strategy used with patient education is an “exit interview” following the initial evaluation. During the interview, a visit debriefing is conducted and clinic procedures are described for the treatment cycle. The therapist can emphasize that the clinic reserves the right to discontinue treatment and notify the patient’s physician following two consecutive no-show appointments. Sometimes the patient is required to sign an attendance policy further encouraging buy-in. This exit interview can significantly reduce cancellation and no show rates.

Conclusion

The rehab industry has implemented various methods and policies to reduce patient cancellation and no-show rates. More commonly clinics implement multiple strategies to affect more positive outcomes, including patient education, reminder systems, financial sanctions, and scheduling models to address the challenge of reducing the rate of missed appointments. Clinics that have worked diligently on multiple strategies can regularly achieve cancellation/no-show rates of 10% or less. That is good for profitability and good for quality patient outcomes.