Should You Charge A No-Show Cancellation Fee For Your Therapy Business?



The therapists who work with me knows that we have an enforced no-show cancellation fee that we inform all our patients 12 hours in advance for, via an automated SMS appointment reminder (payable at $0.10 cents per every 160 characters; we pay an average of $0.30 per appointment reminder).

We installed this no-show cancellation fee in 2012/2013, as we had patients that routinely:

  • came to our pre-arranged sessions late
  • or do not turn up at all

This lead to wasted therapy appointment slots that could have been given to patients who will honor the appointment, turn up, get treated and make payment (we have waitlist of patients).

Upon installing this fee, then we placed up notification as to what we were implementing, why we were doing so (we explained that it’s because we respect the time of our therapists AND our patients, and hence we will start on time and finish on time; and patients who didn’t inform us beforehand before no-show will be billed in full anyway).

Did we get into trouble?

In a sense, yes.

A handful of patients complained loudly (always a small minority makes the most noise); and some think that we won’t or couldn’t enforce it it.

We enforced it anyway.

And that’s when we had the grand total of TWO patients since 2012 that complained about this to the doctors and at the front counter. About three more just decided to not show up anymore.

Total Damage: 5 patients lost.

Upside?

  1. Patients started coming on time and the amount of no-show dropped by about 50%
  2. The therapists started becoming happier because they knew that we (management/owners) are looking out for them, as they are mainly revenue-sharing basis
  3. The front counter got happier because there is a reduction of patients that were habitual latecomers/no-showers

Is it worth it?

Yes. I will do it again in a heartbeat.

I cannot imagine tolerating and living with patients who will constantly come late and expect to be seen for the full session (even if the next session was free, I will still end on time, to ensure that patients honor appointment timing) or worse, can just cancel because they feel like it.

If patients refused to pay, we check back their history to see if they are habitual late-comers/no-showers; if it’s their first time, we usually will waive it off depending on the reason ie if they told us they went for show/leisure…we will bill them.

Habitual late-comers are not given a chance: they need to pay the cancellation fee before they are allowed to make any other appointments.

Caveat: I don’t like billing patients if they hadn’t received a therapy session with us…but based on the experiment above, it makes business sense to do so, and we train patients to follow the system. We also are human and we understand, sometimes they/their loves ones fall sick or something drastic happens – we’re ok with those and we waive the cancellation fees. But patients who has no sense of time of their own, or can’t stand our 12-hours cancellation policy, they will have to go someplace else to receive treatment – I’m sorry we’re not a good fit.

But Nigel, can’t we wait till we are fully booked before we enforce that?

Great question! And the answer is NO.

Here’s the thing: it is a cascading problem, and you need to nip it in the bud before your waitlist is full of late-coming and no-showing patients. Think about it this way, if you tolerate a habitual late-comer, what happens is that you’re also training the patient who has to wait/delayed therapy session to expect that you’d always delay sessions and worse, that you condone it.

So then, slowly and gradually, he/she also starts coming late; and then another patients thinks that way, and another, and another…until you have a full clinic of patients who are all late-comers.

Because you tolerated it, you then trained your patients to never come on time.

Nip the problem in the bud.

It may seem like a big and scary problem, that you may frighten all your patients away, but frankly, ever since we implemented and enforced that, our patients GOT HAPPIER, because they felt secure knowing that we respect and honor their therapy timeslots, and they came on time, comply with therapy etc.

In the beginning we only had less than 300 appointments a month.

Today in 2017, we have more than 1200+ appointments per month, and we will grow some more, and this no-show/late policy will be here.

Edit: end 2017, we have more than 1500+ appointments per month, and growing still. The no-show/no-lateness policy is working well.

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