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How do no-shows hurt a practice’s finances?

According to the BMC Health Services Research from 2016, the average cost of a single no-show in the clinics studied was $196. Multiply that by two to three no-shows per day, and you’re looking at significant loss of income. The typical no-show rate itself depends on the size of the practice; the researchers found that the mean rate for 10 outpatient clinics of large hospitals was 18.8 percent per year, and though the Medical Group Management Association’s (MGMA) 2016 Practice Operations Report identified a lower rate for private practices, even a six percent no-show rate can be troublesome.

Did you know?

The Medical Group Management Association’s most recent MGMA Stat poll asked health care professionals what their biggest challenge was with appointments.  Overall, 44 percent of the respondents stated that their biggest challenge was patient no-shows

An Alarming Stat

For many practices, no-shows can seem like a routine frustration, something you just have to deal with in day-to-day operations. But the negative effects on both patients’ health and the financial health of your practice make it essential to address this problem — and the sooner the better. Perhaps the most immediate problem created by a high no-show rate is the impact on a practice’s finances. According to the BMC Health Services Research from 2016, the average cost of a single no-show in the clinics studied was $196. Multiply that by two to three no-shows per day, and you’re looking at significant loss of income.

The typical no-show rate itself depends on the size of the practice. The study cited above found that the mean no-show rate for 10 outpatient clinics of large hospitals was 18.8 percent per year. The Medical Group Management Association’s (MGMA) 2016 “Practice Operations Report” identified a lower rate, which varied by specialty, but averaged between six and eight percent per year, suggesting that private practices have a lower rate of no-shows than hospital-affiliated clinics. Either way, in a busy practice, even a six percent no-show rate is troublesome. “A high no-show rate decreases access for patients, makes things difficult from a staffing perspective, and impacts the finances of the practice,” says Tracy Belsan, vice president of performance management at Privia Medical Group, a multi-specialty, high-performance medical group composed of more than 1,800 independent physicians.

Patients skip out on visits for various reasons: they simply forget about the appointment; they feel better and no longer need to come in (and don’t bother to call to cancel); they have transportation problems; or they can’t afford to pay for the visit or the copay. Whatever the reason from the patient’s point of view, the result can cause havoc in the daily routine of the medical practice. “Reducing a practice’s no-show rate is vital to the health of patients and the success of the practice,” says Belsan.

While the exact cost of no-shows will vary from specialty to specialty and region to region, there is no question that no-shows are a drain on a practice. “It is more valuable to attack this problem than anything else in your practice,” says Elizabeth Woodcock, president of Woodcock and Associates, an Atlanta-based physician practice consulting  firm. “More than 90 percent of costs are fixed — information technology, electricity — you have to pay those anyway, no matter how many patients you see. But when you prevent a no-show,” she says, “that’s pure profit.” Furthermore, the negative impact and cost in terms of your patients’ health can be immeasurable.

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