There seems to be a lot of confusion about the topic of financial arrangements for the dental office. Indeed, I have spent many hours researching the subject. I have taken full-day courses, one titled, "What Are the Best Methods to Use with Patients to Accomplish Adequate Financial Arrangements." Consultants come up with elaborate scripts of exactly what to say to patients to get them to accept treatment plans and then get their finances in order. I have worked with a number of dental offices that have jumped from financial policy to financial policy, to a point at which the staff had no clue what they were offering on any given day.
We have a fairly simple plan in our office, which is part of the key to what has kept our overhead at 45% for the last seventeen years. Every time I lecture on the topic of financial arrangements, a few dentists come up to me afterwards and say, “it can't be that easy.” The problem with the discussion of financial arrangements is that we, the dental community, make it so complicated in our own minds that we find it very difficult to discuss it intelligently with our patients.
The very first and likely most important concept is that you need to come up with a specific plan for how you want to handle financial arrangements—and stick to it. This means that come Monday of next week, after consulting with your staff, you decide that these are the ways that we handle financial arrangements—period, exclamation point! You, the doctor, and the entire staff must be on board with the fact that these are the financial arrangements we offer to patients and this is it! There will be no exceptions to the rule. Very few patients will be indignant, though some may be upset. These are often the same patients you have the most trouble with from a collection standpoint, so it is okay if they find another dental office. If you are like most dental offices with accounts receivable over 120 days old, which you have nearly zero chance of collecting, you need to make a stark change rapidly to your financial arrangement structure.
The above paragraph may sound very scary. It takes guts to make this dramatic move. You will find, however, that most of your patients will take this change in stride, and many others will welcome it. Talking about money is always uncomfortable for people. What is more uncomfortable, though, is leaving the topic open, and sending a bill after the fact that the patient may yell and scream about. You presently have many more patients that leave your office because proper financial arrangements were not made in advance than you will ever have if you promise yourself and your office that from now on you will discuss finances for dental treatment openly and honestly ahead of time.
I learned this lesson from a patient when I was a young dentist. I presented a treatment plan to a patient for a couple of crowns and practically started stammering when I got to the cost of the crowns. This nice, older woman saw how nervous I was and gingerly took my hand, looked me in the eye, and said, "Dr. Malcmacher, just talk to me." I did talk to her, she accepted the treatment, and she is still a patient of ours today. I learned the lesson that patients just want us to talk to them openly, honestly, and sincerely. No course on financial arrangements or how to talk to patients can teach sincerity. That is something that needs to come from you.
The second very important concept in financial arrangements is to never begin treatment on a patient unless the financial arrangements have been discussed and accepted ahead of time. This is another rule that is never violated. In my office, I don't care if the treatment is for $10 or $10,000. People will freak out just as easily at $25 as they will at $125 if they aren't prepared for it. This is one of the keys to having a stress-free office. Now, nothing in life is ever stress free, but you must admit that most of the stress in the office is caused by monetary disagreements between you and your patients. You can eliminate 95% of that stress by never beginning any treatment unless you have discussed money ahead of time with the patient. It has now been 15 years since one of my patients could come up to the front desk and say, "Yeah, the Doc said I could pay this whenever I want." My staff has a written guarantee from me that if I ever say that again they can turn my office into the staff lounge.
You are probably thinking, "But, what if I have a two hour appointment scheduled to begin a bridge on a patient, and they forgot to bring their payment? Should I not start the bridge at that appointment?" The answer is: you should absolutely not start the bridge at that appointment. If the patient was not reliable enough to bring in their payment as agreed upon, then what will happen (in the typical scenario) is you will begin the bridge and be obligated to finish the bridge even though they haven't paid you. You will then be chasing them for the next two to three years for payment on the bridge; it just isn’t worth the resulting stress and headache. In addition, have you ever noticed that your dentistry looks and feels better to the patient after it's paid for? It is nearly always the patients that have not paid their bills who have the most difficulty with the way the denture fits, the way the bridge occludes, or the way the esthetics look. To quote Dr. Roger Levin, "Patients who have paid you will like your dentistry."
By the way, who is the worst person in the office to make financial arrangements with the patients? You know the answer. It's the doctor. In our office, the doctor presents the treatment, and asks the patient if there are any more questions about treatment. He then leaves the room for the office manager to come in and discuss financial arrangements with the patient. The doctor should run out of the room, and even more than that, should run out of ear shot of the conversation. I know too many doctors who are eager to jump back into the middle of the discussion about financial arrangements just when the patient is about to agree to the terms and tell the patient that they can pay whenever they want.
Here are the payment arrangements we now offer in our office. The patient can pay at the beginning of treatment and receive a 5% accounting discount. The second option is to pay 50% down at the beginning of treatment and pay the balance of 50% at the last appointment (or any variation thereof—for example, if the treatment will take four appointments, they can pay 25% at each appointment).
The last option is for very trustworthy patients only, who have an exceptional credit history in our office, and have proven to us that they pay on time. This option is a 1/3 of the fee for each month for three months. We never go longer than three months, and that is only with our most trusted patients. After that, if the patient wants a longer time to pay, they are more than welcome to use their credit cards or loans that can be arranged in our office through the Dental Fee Plan, Care Credit, Wells Fargo, or a number of agencies that do this. Financial planning is really a separate topic, which I hope to cover in another article.
This approach to financial arrangements will streamline your office policies, decrease your overhead, increase your profit, and significantly reduce the stress that financial arrangements cause in your office. Keeping these systems as simple as possible, and working honestly and openly with your patients about finances, will also increase the morale in your office—giving you a happier staff, and letting you have more fun doing dentistry.