No matter how you look at it, healthcare is a business. Physicians might go into practice with the sole goal of improving patient outcomes, but they must maintain financial sustainability to keep their doors open — and probably to pay off loads of debt from medical school.
Getting patients to come to a medical group is only part of the equation. Retaining them means a stronger practice bolstered by patient loyalty, a positive reputation and a steady revenue stream.
Part of patient retention in healthcare is understanding the costs of patient acquisition and attrition. Another element is knowing how to reduce those costs.
Acquiring New Patients
We’ll start with patient acquisition. Estimates show that it is six to seven times more expensive to acquire a new patient than it is to keep a current one coming back.
Similar to the cost of acquiring a customer (CAC), which in the business world refers to the total amount spent by companies to onboard a new customer, patient acquisition cost is the overall marketing expenditures required to acquire and “sell” to each patient. Why does the classification of patients matter for a medical group? Because the probability of your existing patients visiting your practice for healthcare services is 60 to 70 percent, but for new patients, the likelihood is five to 20 percent.
Reducing patient acquisition cost is possible through conversational AI because it enables healthcare providers to automate patient engagement, provide more personalized and efficient service and answer incoming calls and texts around the clock. Reducing wait time and creating the option for patients to manage appointments and access information on their schedule through their chosen communication preference improves satisfaction.
Why is patient satisfaction so important in patient acquisition? Because satisfied customers tell an average of nine people about their positive experience. They are more likely to tell friends and family about their positive experiences with a healthcare provider, potentially leading them to join the same physician practice.
The Effect of Patient Attrition on a Medical Practice
Next is patient attrition, also sometimes referred to as turnover or churn, meaning the number of patients who discontinue their healthcare services with a particular provider and do not return. The average patient attrition rate in the United States is 17 percent, and it can be influenced by a variety of factors, including practice location, competition, payer mix and socioeconomic demographics.
One survey found that 36 percent of patients left a healthcare provider in the previous two years. Patients leave a medical practice for a variety of reasons, including:
- Poor experience with a healthcare provider and staff
- Slow or no response to questions or concerns
- Poor communication, long waits in phone queues
- Delayed access to next available appointment
Not surprisingly, patient no-shows markedly affect a practice’s attrition rate, with almost 32 percent of patients with one or more no-shows not returning to the same practice within 18 months. Having even one no-show appointment increases attrition by roughly 70 percent.
Consistent and effective communication contributes to less churn by spurring patient engagement. By utilizing conversational AI to improve communication and response times, healthcare providers combat many of the primary factors that lead patients to leave a practice.
The more interactive nature of conversational AI is also beneficial in reducing no-shows because, unlike traditional appointment reminders, it gives healthcare consumers the ability to procure more details about the scheduled visit without having to speak with a live agent. By using conversational AI to remind patients of upcoming appointments, providers can reduce patient turnover and revenue loss and promote better follow-through rates for referrals.
What is Patient Retention?
Patient retention rate measures a practice’s ability to retain patients over a specific period and is computed by:
- Setting a fixed time frame
- Figuring how many clients the practice gained during that time period
- Calculating the total number of patients at the end of the period minus new customers acquired during the period and dividing the total number of customers at the start of the period
By increasing patient retention by just five percent, a practice has the capability to increase the value of an average patient in lifetime profits by 25-100 percent. That’s a lot of revenue, considering the average lifetime value of a patient is between $12,000 and $15,000.
In addition to increasing revenue, patient retention can boost a practice’s reputation. Although satisfied customers often share their positive provider experience, dissatisfied ones share more broadly and are likely to tell 22 people about their negative experience. Therefore, a lack of patient retention can lead to fewer word-of-mouth referrals.
Medical groups that engage in retention strategies are more likely to benefit from patient loyalty, resulting in improved adherence to medical advice and treatment plans. And, patients who are more appeased with their healthcare positively affect the satisfaction of physicians and staff, resulting in increased productivity and reduced turnover.
So how can your practice retain more patients? Through the use of technology tools that match patients’ communication preferences and expectations for convenience.
Utilizing Conversational AI to Facilitate Patient Retention
Patient retention can be achieved in multiple ways, from employing patient engagement strategies and promoting a cost-effective payment experience to staying on schedule to decrease wait times. Another essential component is educating patients on the importance of regular visits and preventive care.
Some research contends that medical practices lose approximately two-thirds of their first-time patients due to lack of follow-up and loss of communication. Automated communication tools such as conversational AI streamline patient outreach while decreasing a practice’s administrative burden. Healthcare providers can use this technology to not only enable patients to conveniently schedule or reschedule appointments and preventive screenings but also share health tips, conduct post-hospitalization discharge and get answers 24/7 to non-urgent inquiries.
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