Many dentists work very hard at improving their clinical skills. Continuing education is a high priority for most dentists, and the level of expertise is high as a result of this. Unfortunately, what matters most to the patients are not your clinical skills, but your business and practice management skills.
Patients have no idea what kind of a margin you use on a crown preparation, or even what dental materials you use in your office. The only way for them to subjectively rate your office is by their comfort and whether or not your office is user friendly. Unfortunately, most dentists do not put as much time and effort into the business of their office as they should. This is a side of the practice that can make you or break you.
Financial arrangements are one of the most important aspects of the business side of your practice. Sometimes getting the patient to be able to pay for and afford their dentistry is much tougher than making a clinical diagnosis. Part of the reason the overhead in our office has been at 45% for the last 10 years is that we help patients afford their dentistry through the use of third party payment plans.
An inviolable rule in our office is that all finances are discussed and agreed to before any treatment is done. In other words, I don't care if the case is for $25.00 or $25,000.00, I will not begin treatment on any patient unless they have spoken to our office manager ahead of time and made proper financial arrangements. If you want to reduce the stress in your office, this is one simple way to make your life much easier.
Now, you may be thinking that our offices are all in high-class neighborhoods where everyone has plenty of discretionary income to use for their dental needs. In reality, our offices are just like yours. We have patients from every socio-economic level. We never prejudge patients as to what they think they can or cannot pay. We are often surprised—sometimes a patient we think cannot afford a new pair of shoes will want to pay for 10 veneers, while in other instances a patient who drives up in a new Mercedes doesn’t want to spend a nickel to improve his or her oral health.
We go on the assumption that most people are in our office because they want some form of dental treatment, and we help them get it any way we can. The way we are able to do this is with third party payment plans. In order to keep our fees reasonable, we need to get paid when the dentistry is done. We realized a long time ago that our office is not a bank. When we tried to be a bank, we were a very poorly run bank, because we typically had many accounts receivable over 120 days old. Our front desk staff would spend 90% of their time tracking down and going after these accounts, which made it not worthwhile for anyone.
Everyone agrees that the worst job in the office is making collection calls. When your office has to make collection calls, everyone loses—you, your office, and the patient. First of all, the patient will dislike you and your office and will tell everyone about the poor service and the rude people in your office. Your office loses again because of the wasted time and effort that it takes to make these calls. The patient loses because they cannot come back to your office and get the treatment they need.
We are all good at practicing preventative dentistry. Now I want you to think about prevention when it comes to the business part of your practice, particularly collections and accounts receivable.
One of the easiest payment plans that nearly every one of your patients has is sitting in their pocket right now. I am referring to a Visa, MasterCard, or Discover card. I am still amazed in this day and age at the number of dental offices that do not take these cards as a convenience for their patients—and it is much more than a convenience for your patients. You get paid instantly and it's worth the two to three percent it may cost your office for that money to be in your bank account rather than in the patient’s bank account. The benefit of using Visa, MasterCard, and Discover is that the patients are used to using these cards; patients can pay off their monthly balances at will, and there is virtually no headache for your front office staff. Most of your patients have this instant financing sitting in their wallet or pocketbook right now.
There are many other very good third party companies that provide patient financing as well, and these can easily be arranged through your office. All it takes is a few minutes of the patient's time and staff time to get the system in motion. These companies will provide your office with applications. The patient fills out the application with all the necessary information and the form gets faxed over to the company. Usually within 10 minutes you will have an answer from these financing companies as to whether or not the patient can receive financing, and what their line of credit will be. You can even apply over the internet and literally have an answer within a minute.
The advantages to using this kind of system are many. First, it is convenient for many patients to have a separate line of credit strictly for their dental needs, which keeps their regular credit cards free of large balances. Second, the money usually gets deposited into your account within one to three days, which helps your cash flow. Third, once the patient pays off his or her balance, he or she then can use this credit line over and over again for their dental needs. Finally, if the patient is denied credit, your office does not look like the bad guy. After all, if these professional banking companies will not lend money to the patient, certainly the patient will not expect you to extend any kind of credit to them.
There are many different third party companies that provide patient financing. Some of the more popular ones are the Dental Fee Plan, Unicorn Financial, CareCredit, and Wells Fargo. You need to do some shopping around to see which one or two of these companies can provide your office with the best service. Also, there are many fees that can be involved with these financing companies; you must look carefully at these so you can get the best deal. Probably the most important consideration is that these patient financing plans are nonrecourse. This means that if the patient does not pay off their credit line as promised, these companies cannot come back to your office and demand the payment. Another major consideration is what it costs your office to provide these plans, as some charge up-front fees as well as a percentage of the credit line used.
We took pencil to paper and interviewed a number of these companies until we figured out what would be the most beneficial for our office and what would be the most cost effective plan for us to offer. The company we now use is CareCredit. They are endorsed by most state dental associations and are one of the most widely used dental financing companies around. CareCredit has one of the highest approval ratings. What amazes me is that many times patients will apply for a certain amount, let’s say, $5,000, and then be approved for $7,500 without us even asking. Then the patient can instantly afford more dentistry. We use CareCredit constantly for treatment cases from $500 to $20,000. Patients love their no-interest financing deals and have been very satisfied. There is no question that we do more dentistry because CareCredit makes it affordable for our patients.
I have heard lecturers promote having your own in-office payment plans. I can tell you after working with many dental offices over the years, that for most offices, this is an impractical and bad idea. The staff time and cost to maintain payment plans quickly eat up any money you think you may be making on interest paid by the patient. This also involves tremendous headaches, stress, and low morale for the office in general. In addition, in the words of Dr. Roger Levin, "Patients that have paid you like you and they like your dentistry.” Did you ever notice that dentures that are fully paid for fit better than those you are owed money for? It's always those patients who still owe you money whose dentures don't fit well, or they are not going to pay you because they don't like the way the dentures look (even though they approved them at the try-in), or there are still some high spots that never seem to go away. All dentistry fits and looks better once it is paid for.
Getting the financial part of your practice takes work and practice. By having clear-cut financial policies, and easy-to-use payment plans, your office can increase your collections with less effort and stress. This also helps your patients get the kind of dentistry they need and deserve while significantly reducing the stress in the office, which makes visits to the dental office much more enjoyable for everyone.