Is your office still making manual phone calls to remind patients of upcoming appointments? If so, you’re among only 10% of healthcare organizations that haven’t upgraded to an automated platform that can save you significant time and money, like patient appointment reminder software (which can generate millions in ROI).

Nearly 90% of healthcare organizations use automated appointment reminders, according to a recent survey conducted by the Medical Group Management Association (MGMA). Survey respondents reported numerous benefits as a result of using automated appointment reminders, including:

  • Increased revenue
  • Fewer no-shows
  • Improved schedule capacity utilization
  • Freed up resources (e.g., staff time)
  • Better patient compliance

While that data includes automated phone calls and text message appointment reminders, MGMA Consulting Principal Nick A. Fabrizio, Ph.D., FACMPE, FACHE, adds, “Most healthcare organizations have transitioned to appointment reminders via text; messaging, which is even more efficient and effective than voice messaging.”

Automated appointment reminder platforms vary in pricing and features, so it’s essential to carefully consider your options before selecting the solution that will work best for your practice.

Solutions also vary in terms of results. Many will claim to save you time and money, but exactly how much? How can you quantify the above benefits?

Before any investment in technology, it’s essential to calculate the value of what it will bring to your healthcare practice in terms of cost savings and new revenue. For example, to calculate ROI for every $1 you spend on appointment reminder texts, you can use this formula:

ROI = ((Cost Savings + New Revenue – Cost of Investment)/(Cost of Investment)) x 100

Learn how to calculate your potential ROI for appointment reminder texts at your practice.


Calculating Cost Savings For Appointment Reminder Texts

To calculate the return on investment for patient appointment reminder software, start by calculating how much money you would save. Consider the following:

1. How much staff time is used daily to manually remind patients of upcoming appointments?

First, you’ll need to consider how much time your staff spends calling patients to remind them of upcoming appointments.

Last year, Adelante Healthcare, a Phoenix-based Federally Qualified Health Center (FQHC), engaged Providertech to implement automated text message appointment reminders that notify patients of upcoming appointments and allow them to confirm or cancel if necessary. The goal was to reduce no-show appointments, which would improve quality outcomes for their patients and prevent lost revenue.

Based on their experience, they estimated their staff spent 30 minutes per provider manually reminding patients of appointments via phone every day.

Most practices are only open Monday through Friday, although some may have extended evening and/or weekend hours. If we assume your practice is open five days per week over 52 weeks in one year, we have enough information to calculate how many staff hours are being used for manual appointment reminder phone calls yearly.

.5 x 5 x 52 =130

Hours spent calling per provider x Days working per week x Weeks per year = Total hours per provider every year

Based on those assumptions, your staff spends 130 hours each year calling patients for each provider.

Sticking with Adelante Healthcare as an example, they have 90 providers. Let’s round that up to 100 providers for easy math in our example. If each provider requires 130 hours of manual staff time each year, your entire practice uses 13,000 staff hours to remind patients of appointments annually.

130 x 100 = 13,000

Total hours per provider per year x # of providers = Total hours calling patients to remind them of appointments every year

2. How much are your manual calls costing you?

The front office staff is typically paid between $11 to $19 per hour. On average, our customers pay front office staff around $15 per hour, so we’ll calculate how much your manual appointment reminders cost you using the assumptions from number one.

13,000 x $15 = $195,000

Total hours per year x Hourly rate = Total cost of calling patients to remind them of appointments each year

Each year, your practice could be spending a total of $195,000 on staff time to remind patients of upcoming appointments manually.

Using those assumptions, you could save $195,000 on staff time alone by switching to an automated appointment reminder solution. Of course, you’ll need to factor in the cost of the solution.

Over three years, you could save $585,000 in staff time. You could expect an even greater impact if you have extended hours in the evening or on weekends and holidays.

And, when staff time is freed up, your front office can focus on engaging with your patients face-to-face in the office.


Calculating Estimated New Revenue For Appointment Reminder Texts

In addition to cost savings, automated reminder solutions such as appointment reminder texts can generate new revenue for your practice. Consider the following:

1. What is your average revenue per appointment?

Depending on the specialties offered at your practice, your revenue per appointment will vary greatly. Our Federally Qualified Health Centers and multi-specialty clinic partners average $200 in revenue per appointment. This figure may vary based on the specialty care offered at your practice.

2. On average, how many appointments does your practice schedule every year?

If the average provider sees approximately 15 to 20 patients per day and works a five-day workweek, we can estimate that providers have an average volume of 75 to 100 scheduled appointments each week.

Providers at our Federally Qualified Health Centers and multi-specialty clinic partners see 90 patients per week, on average. If they do this consistently for 52 weeks in a year, we can estimate that each provider schedules 5,200 appointments annually.

90 x 52 = 4,680

Total appointments per week per provider x Weeks in a year = Total appointments per year

Using the same practice size as before, we can calculate that an office of 100 providers schedules approximately 1.2 million appointments each year.

4,680 x 100 = 468,000

Total appointments per year per provider x # of providers = total appointments per year


3. How much does a third-party solution expect to reduce your no-show rate?

No-shows are costly for the quality of your patients’ health, but they can also become costly for healthcare providers. No-show rates vary by specialty and are greatly impacted by social determinants of health that can prevent some patients who have specific challenges from accessing care.

Your no-show rate may range anywhere from 5% to 30% for primary care and specialty care appointments.

Since implementing Providertech’s text message appointment reminder solution, Adelante Healthcare has observed significant improvements in no-show rates and appointment attendance.

Across medical practices, Adelante Healthcare has been able to reduce specialty care no-show rates from 18% to 20% to 13%—a 35% average improvement in their no-show rate. Dental practices improved their no-show rate by 40% and are maintaining an average no-show rate of 18%.

Related: Read Adelante Healthcare’s case study

We can apply their results to the estimated no-show reduction rate and assume that your practice may be able to reduce their no-show rate by 5%, or a 35% improvement.


4. How many additional appointments per year can you expect?

We can calculate the number of additional appointments kept as a result of automated appointment reminder texts using the following formula:

468,000 x 5% = 23,400

Total appointments each year x Anticipated rate of no-show improvement = Additional appointments per year

A 5% reduction in no-show rates would generate 23,400 additional appointments annually.


5. How much new revenue can you expect to generate each year?

Using Adelante Healthcare’s revenue per appointment of $200, that’s a total of over $4.6 million in new revenue per year.

23,400 x $200 = $4,680,000

Additional appointments each year x Revenue per additional appointments kept = Additional revenue each year

And, that’s just the first year. The no-show rate would likely continue to improve, but even if it didn’t, over the course of three years, you could generate an additional $14 million in new revenue alone.


Total Estimated ROI For Appointment Reminder Texts

So far, we’ve calculated that automated patient appointment reminder software can save you $195,000 annually while also generating an additional $4.6 million in new revenue in the first year.

That’s a total benefit of over $4.8 million in the first year.

However, we still have to factor in the cost of your appointment reminder solution.

From flat fee models to rates priced-per-text, appointment reminder text messaging platforms have been priced in a variety of ways. Whichever vendor you choose, make sure they are upfront about the cost and how they charge, whether it’s based on the number of users or if there are additional fees for added features.

In general, you can expect a setup and configuration fee, plus an ongoing cost for the platform, software, and support services.

For the sake of this example, let’s assume your vendor party charges $8,500 in setup costs and an annual fee of $105,000 to cover appointment reminder texts for the 100 providers at your practice.

We can plug that back into our initial formula to calculate the ROI for the first year.

(($195,000 + $4,680,000 – $113,500)/($113,500)) x 100 =4,195%

ROI = ((Cost Savings + New Revenue – Cost of Investment)/(Cost of Investment ))x 100

That’s an ROI of 4,195%. In other words, for every $1 spent, you could recover at least $41.95 in year one. The appointment reminder solution would not only pay for itself, but it would also significantly increase your bottom line at a net operational benefit of over $4.7 million.

Want to see how we can help you save money and generate additional revenue using appointment reminder texts? Contact us today to schedule a free demo.