Three consultants recently published an article in Dental Economics titled, "Outsourcing Patient Financing." They each promoted being a "Cash Only" practice and stated that being paid 100% in full at the time of treatment was the only way to go. Requiring payment at the time of treatment, they said, while obtaining great case acceptance, was a piece of cake if the practice would learn how to properly present "outside" financing.

  Lecturers at a recent "Executive" symposium encouraged orthodontists to avoid credit granting, to demand auto bank drafts, credit card drafts, or OFP financing, and never once mentioned doing something to help case acceptance and production.

  Third party dental financing started in 1971 when Beneficial National Bank started the BenCharge dental (and orthodontic) financing program. In the early 70's I managed a Beneficial branch that was the first banking company to offer dental/orthodontic financing. BenCharge offered 12-month no-interest financing, with a 5% discount to the practice. They offered automatic drafting of patient bank accounts and eventually also allowed customers (patients) to charge their payments onto their credit card. In other words, none of the "new" forms of patient financing are new at all. Most have been around for 30+ years!

  In spite of liberal credit approval and excellent terms for both the patient and the doctor, BenCharge and other similar banks and finance companies that followed, never had much penetration in the dental marketplace. BenCharge had thousands of practices "signed up" and had quality education programs to teach doctors and their employees how to properly present and "sell" third-party financing, yet while Beneficial did millions of dollars in dental and orthodontic business a year (nationwide), they never got more than about 10% to 15% of any individual practices' business. The complaint I heard from doctors so many times 30 years ago, "We cannot get more than a small percentage of our patients to accept outside financing!" is identical to the complaint heard most often today.

  Even with interest free financing, most patients will phase, postpone, or forego their treatment entirely rather than allow the practice to send their account to an outside financing source. Some patients will allow you to draft their bank account or charge their credit card, but once practices start requiring that of their patients they lose case acceptance. Consultants can talk until they are blue in the face about proper selling technique, proper verbal skills, etc., but no dental/orthodontic practice has ever been able to become cash only while still maintaining great case acceptance!
  I suppose that somewhere a practice may exist that requires third party financing or mandates auto draft of bank accounts and that also has great case acceptance, strong new patient flow, etc., however in 23 years of consulting I have yet to see or even hear of one. I have, however, met many dozens

of doctors who have limited their practice financial policy to cash only, to monthly payments by auto draft or by credit card only, or to exclusive use of third party financing, but each of these practices struggle with inadequate new patient flow or weak case acceptance, and most often both! Most practices in this situation do not see or will not accept the fact that their restrictive financial policy is a major source of their problem.
  Assuming you are a non-advertising, fee for service (no Managed Care) practice, you are at financial risk with only about 20%-25% of your patients. Since 75% to 80% of your patients will always pay you appropriately, identify them, specifically, and grant credit to them in a fashion liberal enough to get great case acceptance. With great verbal skills during the financial presentation, you will get many paids-in-full and will still get large down payments and short-term contracts from most of these patients, with low or no down payment and longer term financing with only a very small portion of the accounts.

  Your risk, of course, is with the 20% to 25% of your patients who are not creditworthy. A $3.00 credit report, obtained via the internet in 60 seconds, will identify these high risk patients with almost 100% accuracy. If you know, with certainty, the patients who are risky, you grant no credit, or no inappropriate credit, you will have no risk and no loss. It's just exactly that simple!
  Do not be fooled into believing that outside, third-party financing, auto-drafting, etc., is the panacea that some would have you believe. Third party financing, through CareCredit or one of the other reputable financing organizations is highly valuable to a health care practice and, used properly, will enhance case acceptance and practice productivity. However, believing you can turn your practice into a "cash only" facility and believing that more than a small number of your patients will willingly allow you to draft their bank accounts or their credit cards, or will willingly finance their treatment through outside financing, is a pipe dream, a fantasy created in your mind by some very good quality marketing designed not to help you build your practice but to build the coffers of the finance companies and banks, often at the expense of your practice.
  The answer to being a highly productive and profitable practice is to market toward quality patients, to diagnose nothing but first quality treatment, to have great presentation skills, to keep reasonable and appropriate levels of financing for your "A" patients in-house, and to be able to identify, with certainty, the relatively small percentage of patients who truly need to be handled on a "cash-only" or outside financing basis.
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
 

Yellow Page Advertising

  I know, I know. You are tired of reading this in almost every newsletter, but I can't help myself! I was in a new client's office a few months ago. He was paying $1,400 a month for a ¼ page ad in his local Yellow Pages - almost $17,000 a year. He was getting 8-10 new patients a month from this source. 70% were "C's." 20% were "B's." 10% were "A's." The rate of case acceptance from the patients, even the "A's" was horrible, and total practice revenue from all patients from this source was a total of $1,200 per month. I am not a rocket scientist but even I can tell that math isn't working in the doctor's favor!
  $17,000 a year spent on almost any quality internal marketing program would have generated a minimum of 20-30 "A" patients a year. These patients would have a good dental IQ, great case acceptance, great clinical cooperation, and guess what type of family and friends they would refer to your practice? Get the heck out of the Yellow Pages, or any other form of retail advertising, and put that money where it will do you some good!

Check Your Website

  I was looking at a doctor's website the other day. He had a section titled "Payment Plans" or something similar. That section started out well by saying that the practice was pleased to offer flexible financial arrangements to their patients. The site even went on to say the doctor was "not willing to let finances and the payment for dental care be a barrier to the patient's ability to start into treatment." I was thinking that this was quite an enlightened practice until I continued reading and saw the reference to third party financing (OFP, DFP, CareCredit, etc.). In fact, this was a cash only practice and the only financing offered was through credit cards and these financing organizations.
  This will attract the "B" and "C" patients to the practice, in much the same way as a Yellow Page ad stating "Extractions While You Sleep" or "Emergencies Welcome." This is no way to attract "A" patients to your practice. Keep such messages, links to the finance companies' websites, etc., off your website!

"The greater the obstacle, the more glory in overcoming it." Moliere

Zuelke Monitors

  Are you looking for an easy way to track your practice statistics? Our friend, Lynne Fales of FoxFales, Inc. has set up our Orthodontic Practice Monitor and Case Start Tracking Forms so that they can be done on your computer through Access. To download the forms, visit her website at www.foxfales.com.

"Success is the feeling that we can succeed." Nelson Boswell

Financially Responsible Step-Parents

  I have taught that you must have a step-parent's permission to obtain a credit report. This is because, contrary to a custodial birth parent, a step-parent has no "natural" (legal) financial responsibility to pay for dental or orthodontic care for their step-child. Just because, for instance, a mother lists her husband, the child's step-father, as a responsible party on the Patient History form, does not mean that he is actually responsible.
  Under one set of conditions, it is acceptable to have a step-parent be responsible for payment, to obtain his/her credit report, and to use his/her credit decision as the criteria for your financial arrangement. Those conditions are:

• There must be direct contact between a practice employee, usually the Treatment Coordinator, and the step-parent. The natural parent cannot make the step-parent responsible!
• The step-parent has personally agreed to accept full financial responsibility.
• Before appliances are placed, the step-parent, along with the birth parent, and in the presence of an office employee, must sign the Financial Agreement document.

  Sometimes the work associated with establishing true legal responsibility may seem to be more than the result is worth, but many of your patients' parents are divorced and remarried and the two to five percent more production that you would not otherwise have had, is a lot of net income. We believe the effort is worth the result.

Invisalign

  More than 400 of our clients, most (but not all) of them orthodontists, are "certified" Invisalign practitioners. Understandably I suppose, we get many Invisalign related calls to our support program each week.
  Recently we have received a number of calls asking how to handle a patient, who had already started into treatment, when the insurance company has reported that they will not cover orthodontic treatment when done with Invisalign aligners. Our first response is to question why a practice would have accepted assignment of insurance benefits and proceeded into treatment, when they did not know, for certain, whether or not the insurance was actually going to pay for the orthodontic work done.
  Once that issue is settled, we ask the client why they told the insurance company the details of the specific appliance that is being used. Is an insurance company told the brand name of the brackets used in traditional orthodontics?
  Comprehensive orthodontic treatment is comprehensive orthodontic treatment…period! The specific type of appliance used is immaterial and does not need to be reported to the insurance company. Having said that, if an insurance company calls or writes, with a specific request regarding the type of clinical treatment, you must not mislead the company and must report exactly the information they have requested. Fortunately, such requests come infrequently.

What's Your Logo Say About You?

If it's time to refine your practice's image, then check out The Agency (www.televoxagency.com). A full-service firm dedicated to creating both internal and external marketing materials and strategies, The Agency maintains its focus in the orthodontic industry. From logo design to practice brochures to patient forms to websites, The Agency provides a custom, visually-consistent brand for your practice. The Agency also implements "start-to-finish" business development programs, such as patient recruitment campaigns & referring dentist programs. To learn more about The Agency, call 800-451-3515 or visit www.televoxagency.com.

"People with goals succeed because they know where they're going." Earl Nightingale