The question on everyone's lips
This is the question many clinics ask themselves without ever really looking for the answer: is an unpaid bill of €200 really a loss of €200?
This belief is however false. Behind these 200€ not collected lie costs that no one calculates. An unpaid debt is too often treated as a simple loss of profit, whereas it actually generates a cascade of invisible losses that accumulate.
In this article, we will give you the exact formula to calculate the true cost of your unpaid invoices, with a numerical example so that you finally know what you are really losing.
1. The 4 factors that explode the true cost of a bad debt
The gross uncollected amount: what you see
This is the only figure that most establishments look at. It is the outstanding patient co-payment, i.e. the portion not covered by social security or the supplementary insurance. This amount varies depending on the procedures and specialities, from visceral surgery to orthopaedics, urology and others.
It appears directly in your accounts, giving it the appearance of a full figure. Yet, it only represents the visible part of your outstanding payments, and the actual amount you're losing is unfortunately much higher.
Secretarial time: the invisible cost of follow-ups
Behind every unpaid invoice, secretarial staff spend hours of invisible work between phone calls, registered letters, email reminders, and tracking in the management software. This is a repetitive and time-consuming task that ties up teams with low added-value actions, when they could be dedicating that time to better patient follow-up.
On average, managing an unpaid invoice represents between 30 minutes and 2 hours of cumulative work per case, depending on the number of attempts required. If we take the example of a secretary paid at €12.50 gross/hour, then 2 hours of dunning already represent €25 added to our bill.
This cost doesn't appear anywhere on your dashboards as it's buried within payroll. However, it's very real.
Debt collection costs: agency or bailiff
You know this better than we do: despite the time and effort put in by the administrative teams, some patients do not pay. When internal reminders are no longer sufficient, the organisation can engage a debt collection agency, which typically charges a commission of 15 % of the amounts recovered (ranging from 10 to 20 % depending on the provider).
Other healthcare providers use a bailiff, whose fees generally amount to between 10 and 20 % of the amount claimed. For an outstanding debt of €200, this amounts to around €30 in additional costs to be borne. Not to mention the time spent by the practitioner and the administrative staff on compiling the file, signing letters and handling the back-and-forth correspondence.
Beyond the financial cost, there's a cost that is too rarely mentioned. A recovery procedure can permanently damage the relationship with a patient and harm your establishment's local reputation. This damage is difficult to quantify, but it is very real.
Opportunity cost: lost niches
This is the most abstract, but often the most important, factor. A patient who takes up a slot and doesn't pay is another paying patient who couldn't be seen at that same time.
Let's take a concrete example: if a practitioner charges €70 for a 30-minute slot, this missed slot represents €70 in revenue that is definitively lost. Unlike an unpaid bill, which can sometimes be recovered, time can never be made up.
In high-demand specialities such as dermatology, ophthalmology or orthodontics, every lost appointment slot holds even greater value because waiting times are already long for your patients. What you lose, therefore, is not only revenue but also a patient who could have been treated that day.
2. The formula: calculate your actual bad debt cost
Now that you know the four factors we've just discussed, here's how to combine them into a single calculation.
This is not an abstract equation but a concrete tool that you can apply in your establishment to obtain the real cost.
The formula for the true cost of a bad debt
This formula is a minimum baseline but it doesn't take into account the stress generated for your teams, the time you yourself spend managing these situations, the impact on your cash flow, or any eventual legal fees.
3. Numerical example: €100,000 in unpaid debts become €143,750
Let’s take the example of a fictional clinic and look at some concrete figures. A private healthcare facility generates an average annual turnover of 5 million euros. Unpaid bills generally account for 10 % of turnover, or 500,000 €. To keep the example simple, we’ll use a figure of €100,000 in unpaid bills per year, which corresponds to 500 cases averaging €200 each. The secretary spends 1h30 per case sending out reminders, at an hourly rate of €15. Each appointment slot taken up by a patient who fails to pay their bill represents 30 minutes at €70 for the practitioner. The practice uses a debt collection agency, whose fees amount on average to 15 % of the sums recovered.
The calculation made from this data gives the following result:
Concrete example: 500 files/year at €200
Management thought it would have to deal with €100,000 in unpaid bills per year. In reality, this cost amounts to €143,750 – 44 % more – and includes €43,750 in hidden losses that no one had ever identified.
To provide a concrete comparison for this sum, it represents more than three annual salaries for nurses, based on an average gross annual remuneration of €30,000.
We invite you to carry out your own calculation to discover the real cost to you of your unpaid debts.
4. A bespoke solution to act before the problem arises
Now that you know the true cost of non-payment, the real question is no longer how to quantify it, but how to reduce it!
Chasing payments, debt collection, hours wasted on the phone: these traditional methods all come into play *after* the problem. Swikly acts *before*.
Swikly is a fully digital solution, integrated into your ERP system, which automates and secures your card details requests in just two clicks. For the patient, the process is simple and straightforward: they provide their card details when booking an appointment, without being charged and without affecting their credit limit.
For the clinic, the additional fee is secured even before the procedure, and a patient who has left their bank details is much less likely to miss their appointment. Once the procedure is complete, you recover your additional fee simply and quickly, without chasing payments or paperwork.
Secretariats save on average 5 days a month and can finally focus on what really matters: the patient journey. A tangible result: an average reduction of 90 % in outstanding payments, as reported by our 18,000 clients.
The best bad debt is the one that never occurs. This is precisely what Swikly allows.
Would you like to know more? Book an appointment in 30 minutes with Jérôme, our medical sector expert.
