Appointment Efficiency Score and Revenue Impact: Part I

This article is the first of two parts.

Seasoned practice managers monitor their practice’s health through a series of standard “vital signs” or key performance metrics. Common measures include days in accounts receivable, days cash on hand, and denial rates. This article, the first of two parts, looks closely at a measure medical practice managers may not take the time to evaluate: the appointment scheduling efficiency score.

What is the Appointment Scheduling Efficiency Score?

The appointment scheduling efficiency score is a tool to help practice managers understand how well they are using their available appointment slots. It compares the available appointment slots for a given day with the total number of actual patients seen. Here is the calculation:

• Number of patients seen per day ÷ the number of patient appointment slots available per day × 100

Imagine your clinic day includes 45 available appointment slots. On average, you see 37 patients per day. Therefore, your appointment scheduling efficiency score is 82:

• 37 patients seen per day ÷ 45 available appointment slots × 100

To easily calculate your efficiency score, review the resource link provided at the end of this article.

What is the Ideal Appointment Scheduling Efficiency Score?

The best score is 100 or over. If the score is 100, the medical practice is using available appointment slots to their fullest. Anything lower than 100 indicates room for improvement.

How can the score be over 100? Some practices double- or triple-book appointments. Other practices accommodate walk-in or “write-in” visits that are not reflected on the appointment template. In either case, the number of patients seen during the day may exceed the number of theoretically possible appointment slots on the default scheduling template, resulting in an efficiency score over 100.

A score of 60 or below for an established medical practice is alarming. That means almost half of the available appointment slots are not used, so the practice is missing out on significant revenue opportunities. It is clearly not operating at capacity.

What Affects the Appointment Scheduling Efficiency Score?

There are several factors to consider as you evaluate your score and consider how to improve it:

• Vacant appointment slots: “No vacancy” is the goal. Each of your appointment slots should have a patient scheduled in it. If you review your appointment schedules and see vacancies scattered throughout the day, that is a clear indication you can accommodate more patients. It is wise to treat each appointment slot as a product you are selling. Each “sale” fuels the economic engine of your medical practice.

• Appointment no-shows: No-call, no-show patients are the most damaging to your medical practice scheduling efficiency. You must assume scheduled patients are going to keep the appointment. They have a reservation! When they don’t show up, you have no opportunity to use that appointment slot for anything else. It is too late to book another patient in the slot.

• Cancellations and reschedules: Appointments will change. Sometimes patients need to reschedule, and sometimes providers need to have patients reschedule. As soon as a cancellation or reschedule occurs, it creates a vacant appointment slot. With enough lead time, it is possible to book another patient in the spot and preserve your efficiency and the associated revenue.

Why Measure your Appointment Scheduling Efficiency Score?

There are several good reasons to measure the appointment scheduling efficiency score, especially if you are the practice manager, owner, or generally responsible for the practice’s revenue.

Every appointment slot represents billable charges.

The most important business reason is that it affects revenue. Every appointment slot represents billable charges. Low-efficiency scores mean you are not generating revenue for the practice as well as you could be. Each unit of improvement you add to your current score will increase the collections and revenue for your practice. Even a 10% to 20% increase in your efficiency score can have a dramatic effect on your medical practice’s financial position.

Do You Know How Much Revenue Impact Improving Your Efficiency Score Can Have?

Calculating your efficiency score can provide interesting behavior insights about your providers and staff. On a positive note, highly performance-driven providers may work with scheduling staff to squeeze in as many patients as possible—double-booking slots at the start of the day, after lunch, or to end the day. In contrast, staff and providers who secretly like to leave early may be less motivated to fill up those late afternoon slots. Likewise, those who like to have a little more time in the morning to get organized may be less motivated to book early morning appointments. I have seen both providers and scheduling staff guilty of these behaviors.

How Often Should You Measure Your Score?

How often you measure your score should be based on your first baseline score. If your score is extremely low, I recommend measuring your score weekly (if not daily) until you see improvements. If your score is in the upper 80s or low 90s, then quarterly measurement is fine to help you keep track of your scheduling performance.

Measuring the Impact of Appointment Scheduling on Revenue

Do you view every appointment slot in your schedule as a product you’re selling? It can help increase revenue, so consider it. The truth is, appointment scheduling is not just about organizing patients and office workflow—done right, it can improve your revenue stream.

Appointment scheduling done right can improve your revenue stream.

How Much Is an Appointment Slot Worth to You?

The first step is to pull a report for all charges for a month and divide that amount by the number of patients seen that month. If you want to get detailed, you can determine the average appointment value for a given insurance payer. Use the same calculation, but pull the monthly charges by payer and divide the total for the month by the number of patients covered by that payer for that month.

The next step is making sure everyone in your practice understands how much an appointment slot is worth. I suggest asking staff and clinicians what they think the number is and later having a 10-minute meeting to share with them the real number and compare it with their estimates.

It is interesting for management to see how much value the team placed on appointments versus the reality. But it is more important to have staff see how the practice’s revenue can benefit from more efficient scheduling. You can apply your average appointment slot value to determine how much revenue increase may be possible if appointment efficiency is improved.

What Impact Do Unused Appointments and No-Shows Have on Revenue?

Unused appointment slots are certainly not a good thing, and they represent untapped revenue potential. Let’s assume the value of an appointment slot is $89. A practice with one unused appointment per day has the potential to increase monthly revenue by $1,780, which is $21,360 over the course of a year (assuming 20 clinic days per month.)

Taking steps to reduce no-shows can have a noticeable revenue impact over time.

No-call, no-show patients are inevitable. They have the worst revenue impact, because they don’t give you an opportunity to use their appointment slot for anyone else. In effect, you’ve sold them the appointment, but they never pay for it. If your average appointment slot is $89 and you have four patients a week that decide not to show up, you’re missing out on $1424 per month. Clearly, taking steps to reduce no-shows can have a noticeable revenue impact over time.

Improving Scheduling Efficiency

Here are some ways to boost revenue through better scheduling practices:

• Take the time to denote no-shows in your appointment schedule. Your scheduling software should give you the option to mark the appointment as a “no-show.” With this process in place, run a report at the end of each month to see how many no-shows you had and calculate the cost based on your average appointment slot value. Then ask yourself how much it might be worth to decrease the no-show rate. A 10% to 20% decrease in no-show rates can have a significant impact on revenue.

• When a patient calls to cancel, take steps to reschedule before the patient gets off the phone. If they cancel via email or other electronic means, make a point to call them and get them booked for their next appointment ASAP. This policy will help protect the revenue you’ll get from the patient, albeit slightly delayed.

• After a patient cancels, turn your attention to finding another patient to book in that slot. If you have a wait list (and you should), contact the first person immediately and offer him or her the newly vacant slot. If you don’t have a waitlist, it may be worth looking at next week’s appointment list to see if someone scheduled in the future would like to come in earlier. By filling the vacant slot with a patient who was scheduled for a future date, you get paid for it and have time to fill the future spot with other patients. If you do it right, this approach also makes your patients feel that you are dedicated to serving them.

• Document your cancellation process so that your scheduling team knows exactly what to do when a cancellation comes in.

• If your software allows, review past scheduling days and months to see if there are any trends in unused appointment slots: Around the lunch hour? At the end of the day? How about Friday afternoons? If you see trends, take some time to work with your staff to see if there is any legitimate reason for these spots to go unused. Consider offering a small monetary incentive to staff each week if those commonly unused slots are booked every day, every week. You’d be surprised how a $10 gift card each week makes those unused appointment trends disappear.

What’s the bottom line? Assume your average appointment is worth $89. If you have two cancellations each day and do nothing to fill them, you forfeit over $3500 per month (again, assuming 20 clinic days per month). By working to fill those vacant slots with someone from the wait list or someone scheduled in the future, you not only save the $3500, you also open slots to “sell” to others in the future.

I’ve seen practices substantially increase their revenue by understanding the value of an appointment slot and changing staff perspective on unused slots, dealing with no-shows, and proactively rebooking and repurposing slots from cancellations.

Find out how much revenue you may be missing out on by using an appointment efficiency and revenue impact calculator, such as the calculator available at www.practicesuite.com/appointment-scheduling-software-calculator/ . It might mean thousands of dollars to you!