advantages of using external consultants

Why You Should Not Charge a Cancellation Fee in Health Care

In a recent post I wrote about the concept of “Continuity Income” and how to set up your business so you never have to charge a cancellation fee EVER again.

If you missed this topic you can read it at the link below:


However – many health business owners find it difficult to structure a recurring income model – or have regulatory bodies that restrict any form of pre-payment for their services.

So in these cases – it is important you have an alternative “Cancellation Policy” in place – to reduce lost income and wasting therapists time when clients fail to attend appointments or cancel short notice.

Let’s get to the solution.

I actually don’t like the charging of a cancellation fee at all in health businesses – but that does not mean you should not have a cancellation policy.

One of my mentors once told me about the concept of “Bad Profits” – where you do make some money – but this income actually has a negative long term impact on the business.

Cancellation Fees are one of these Bad Profits

We all know the collection of the Cancellation Fee is stressful for your admin team – reducing their job satisfaction and potentially increasing staff turnover.

We are also 100% certain  our patients hate paying for a service they did not actually receive – which can reduce goodwill and impact on future referrals.

So how do we reduce cancellation and no shows – and not charge a cancellation fee?

The secret is to have a cancellation policy – and mention the cancellation fee as many times as possible to the new client.

Your new patient communication is full of the words below:

At XYZ Health care – our therapists are busy and have long waiting lists – so you need to give us at least 24 hours notice if you are unable to attend one of your appointments – otherwise a cancellation fee – equal to the full consult fee – WILL be charged – do you understand the policy?”.

As I said – the secret to a successful cancellation policy – is to make sure these words (or a tight version of them) are repeated over and over again to the new patient.

Common times the policy can be mentioned and enforced are:

– at the end of the initial call where the patient makes their first consultation time (mentioned over the phone)

– when your admin team are going over the new patient paperwork when the patient first arrives at the practice for their first consult (mentioned in person over the counter)

– written into and mentioned in the “New Patient Agreement” that all patients must read and sign BEFORE commencing care

– at the end of the initial consult when the patient returns to the front desk to make their follow up appointments (mentioned in person over the counter)

– in the new patient welcome email (mentioned in the email)

– in the new patient welcome letter (mentioned in the physical letter)

– in the sign on the desk of your practice

– in the sign on the wall in each of your treatment room

– every time a patient contacts your practice and makes an appointment

Can you see – the Cancellation Policy needs to be a recurring theme that runs through your practice.

Not – just a throwaway line at the bottom of your new patient registration form – that very few patients read anyway.

You have to earn the right to even think about charging a cancellation fee.

So this is “Stage One” of the “Never charge a cancellation fee” – program” – ie patient education.

In my future posts – i will tell you exactly what to do and say – when a patient does call and cancel – even though they have been told over and over again – about the cancellation policy and cancellation fee.

If you would like copies of New Patient Agreements, Welcome Letters and Registration forms to reduce cancellations immediately in your practice – you can download samples by using the bonus link in my first few pages of my Amazon Best Selling book “How to Run a One Minute Practice“.

You can order your hard copy and get your bonuses by going to: