No-shows are a major contributor to lower facility utilization, reduced service availability, and decreased profitability.
As service providers, we manage fully booked schedules with careful planning. We schedule appointments well in advance to ensure that customers can secure a time that works for them – and then… they don’t show up. Sometimes they cancel at the last minute, but in many cases, they simply fail to arrive.
The phenomenon is well known across service industries in which capacity depends on time slots or physical facilities. In sectors that manage complex schedules – such as hospitality, hotels and restaurants, treatment services including beauty and spa services, and, of course, healthcare. No-shows are a major contributor to lower facility utilization, reduced availability, and decreased profitability.
Every no-show has consequences.
First, there is the unused time of the service provider and the facility that remains vacant: the physician’s time, the hotel room, or the treatment room. The entire service operation and its supporting infrastructure have already been prepared. Administrative staff may have prepared the patient’s medical file, the restaurant may have purchased ingredients based on expected occupancy, and housekeeping may have prepared the room according to the guest’s requirements. In other words, time, money, and resources have already been invested before the scheduled visit even begins.
There is also a broader impact on service availability. The reserved time slot remained unavailable throughout the period leading up to the appointment, preventing another customer from booking and receiving the service instead.
So how can organizations address the problem? The approaches available to us can be divided into several areas, each involving different courses of action.
This article focuses on preventing no-shows. Additional articles in this series will address identifying cancellations in time and filling the newly available slot, as well as forecasting no-shows and managing overbooking.
So, How Can We Prevent No-Shows
- Reducing the Likelihood of No-Shows by Building Customer Engagement
When examining the reasons behind no-shows, we find that they vary across different sectors. In healthcare, for example, some of the common reasons include:
- The underlying problem has resolved – The patient is no longer experiencing pain and therefore no longer feels the need for treatment. Another factor is anxiety about receiving test results, which may lead patients to avoid the situation altogether and either cancel or simply not attend their appointment.
- The customer has no way of getting there – The customer may have intended and planned to attend, but an unexpected traffic jam, public transportation delays or cancellations, or similar circumstances prevented them from arriving. When we know that transportation is a recurring barrier, alternative ways of reaching the clinic can be offered, such as shuttle services from central locations or assistance with taxi costs.
- The customer cannot afford to continue treatment – Sometimes, a customer begins a course of treatment but decides partway through that they can no longer afford the expense. If we identify this challenge, we can help patients better understand their insurance plans, how much they are required to pay for specific services, and which treatments are essential versus which can be postponed. This can help build deeper trust with patients. When patients feel that they have a partner who understands their perspective and looks after their interests, and when they clearly understand the implications of forgoing certain types of treatment, they are more likely to feel committed to continuing their care and to take their appointments more seriously.
- The customer forgot the appointment – The most common way of addressing this issue is, of course, through reminders. However, our work has shown that even among customers who receive reminders, behavior varies. A customer who does not respond to a reminder is about as likely to miss an appointment as a customer who did not receive a reminder at all. Therefore, when using reminders, it is advisable to make the process interactive and encourage active customer engagement by asking the customer to respond
Why Don’t Patients Notify the Clinic? There Are Two Main Reasons:
The customer tried to cancel but was unable to reach us by phone – If receiving timely notice of a cancellation is truly important to us, we need to make it easy and convenient for customers to cancel their appointments. If the cancellation is made early enough, we can also use the opportunity to schedule a new appointment for the customer, or at least understand the reason for the cancellation and address it.
Surveys show that patients often do not view missing an appointment as something unusual or particularly significant. Today, patients interact frequently with the healthcare system and are required to manage many aspects of their care, but they simply do not know what they do not know.
It is entirely possible that most patients are unaware of the impact that missed appointments have on the clinic. As in many other areas, increasing awareness can also help reduce no-show rates.
Adding appropriate wording to the appointment-booking script or reminder message can help raise awareness. For example: “You have received an appointment at a highly sought-after time. It is very important to us that you let us know if you need to cancel, so that another patient can receive treatment sooner.”
Messages like this increase awareness and can improve the rate of advance cancellation notifications.
- Reminders Timed According to Customer Behavior
Studies we have conducted across different sectors show that, to some extent, the likelihood of a no-show can be predicted based on various characteristics of both the appointment and the customer. The type of reminder and the resources invested in it can then be adjusted according to the likelihood of a no-show. For example, appointments with a high probability of a no-show could receive a personal reminder from a staff member.
We also found that reminders are more effective when they are sent at two different points in time, with the timing determined by the length of time between the initial booking and the appointment itself. Scheduling and tailoring reminders according to the type of customer, the appointment time, and the type of service can increase the likelihood of preventing a no-show, or, at the very least, receiving advance notice of a cancellation, allowing the appointment slot to be used by another customer.
- Advance Payment or Cancellation Fees
When we buy a ticket to a show and do not attend, we generally do not receive a refund. Similarly, in the travel industry, cancellation fees and non-refundable policies are widely accepted. Customers are accustomed to these policies and agree to the financial commitment in order to secure the service at their preferred time. In restaurants, healthcare, and treatment services, however, paid cancellation policies are less common and tend to face greater customer resistance.
Nevertheless, it is still possible to create a financial incentive to reduce no-shows. For example, organizations can offer a standard price that allows cancellation alongside a lower price (or discount) for committing to an appointment that cannot be cancelled.
Our work has also shown that when a service involves some form of advance payment commitment, even something as simple as providing credit card details when making a restaurant reservation, it creates a greater sense of commitment on the customer’s part and reduces the no-show rate.
There is no single approach that is right for every organization or every type of service. We recommend conducting research within the specific organization to understand both the reasons behind no-shows and the reasons customers fail to provide advance notice of cancellations, and then tailoring the solutions and courses of action to the different customer segments, services, and operating environment.
