Written by Barry Freydberg, DDS Sunday, 31 July 2005 19:00
As our practices perform more procedures with larger out-of-pocket costs for our patients, we look for ways to help make them affordable. Desires for prettier smiles and the comfort of implants can be difficult for our patients to fund.
We all have our favorite financial arrangements, with cash before services or at the time of service (with or without discounts) obviously being the best. Another common option is to pay an initial portion down and so much per month. Others offer monthly credit card transactions and even long-term patient financing with third parties.
Realizing that patients do not embrace some of these, some are expensive, and some require patient compliance, I looked again to technology for another solution.
What I often find is that our profession, due to the small size of its market, often receives technologies long after other larger markets have already adopted them. That is where I found a technology that, to my surprise, patients have embraced far more than I expected. I will explain why.
A NEW FINANCIAL PAYMENT PLAN OPTION
We have been using a new (for dentistry) financial payment plan option that has saved my office money and time...and a whole lot of collection headaches. Like me, I'm sure you find the business of collections and payment processing time consuming and inefficient. In the past, staff was spending far too much time following up on late payments, making trips to the bank, and negotiating and renegotiating with patients regarding payment schedules. Often, patients mailed in checks late or underpaid the originally agreed upon amount. My office staff was spending far too much time every month following up with past-due phone calls. Other practices that do not outsource statements also spend time printing and stuffing statements. I knew there had to be a solution to these administrative problems...a way to improve cash flow and cut the costs of transaction processing and bank fees.
After doing some research outside of dentistry and talking with other dentists about their needs, I found that we could use some nondental financial management options that are becoming commonplace and can actually begin to improve your bottom line while allowing staff to spend more time with patients. The software lowers the cost of payment transactions by establishing automated payment plans that reduce or eliminate credit card processing fees and reduce bank fees by automatically withdrawing money directly from the patients checking account. This system saves money in several ways: it creates automatic payment flow, reduces credit card transactions and their fees, reduces or avoids financing plan service charges, and eliminates the management of payment plans. Additionally, through electronic check scanning (an option of the system), our bank fees dropped by hundreds of dollars per month.
|Figures 1 to 3. All information needed to elicit the transfers is done online. You enter the total amount, payment frequency, and number of payments. These screen-captures show data entry.|
|Figure 4. Permission form from patient can be paper (as shown) or electronic.|
The beauty of automatic withdrawal is in its ability to establish a regular, automated payment system, which eliminates the problem of slow payments or nonpayment. Once patients provide their account information, a system is in place for regular payments to be taken directly from their checking account and deposited into yours (Figures 1 to 4). Our office enrolled many past-due accounts receivable and existing payment plans on this system, and now we don't worry about incomplete or late payments. As patients family financial needs change, sometimes they choose unilaterally to adjust their financial commitment to their dental practice.
For extended payment plans, recurring ACH (automated clearing house) transfers are easy to set up and save 5% to 13% versus third-party credit plans or 2.5% to 3% versus credit card fees.
For patients paying by traditional paper check, the system includes a desktop check imager, with means you can scan checks electronically and make bank deposits right from your office! You save time, have access to your funds 3 to 5 days faster, and reduce your bank fees. The system allows you to accept checks over the phone or Internet, which assists you in collecting regular or past-due payments.
This is another great way to increase cash flow with little or no management! One can set up the system to bill automatically via ACH transfer any insurance remainders, eliminating the money and time inherent in mailing statements or chasing the patient, while saving 2.5% to 3% on credit card payments.
A FEW FINAL WORDS
I have found after having this system in place that I have saved a substantial amount of money per month both in collections and time. And it has improved the service my pa-tients have received while visiting my office. Staff members have more time to spend with patients and no longer need to make as many difficult collection calls that adversely affect patient relationships.
During seminars, my most commonly asked question is, "What if there is no money in their account?" This is also a problem with paper checks, but electronically, we resubmit and get the money faster. The next most common question is, "What if the patient closes the account?" Again, this can also happen with paper checks. How often does that happen, anyway? If the patient is dishonest, there is little you can do in any event.
I want to mention why I am surprised patients have accepted this method of payment better than I expected. As mentioned earlier, I embraced this technology to reduce expenses, increase collections, and to help patients afford dentistry. But what I didn't expect, possibly a generational predisposition on my part, is that many patients see this as a convenience and service. Another check they don't have to write! Many are coming to expect and desire this method of payment. Why not join other industries in offering this same convenience?
Another unexpected re-sponse from some senior patients (mid-70s and older), who express financial concerns and who might not understand the concept after it is explained to them, is that they tell us that they'd actually rather write a check in full.
I highly recommend looking at this option for financial arrangements and would be happy to answer your questions by e-mail. I can tell you that it will most likely become the financial arrangement of the future.
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