Dangling hundreds of feet above the ground, suspended in the air by wires, cables, and a small seat board, window washers in major cities go about their business day-after-day. They are the urban mountaineers of sorts, scaling and rappelling up and down these glass and steel structures to ensure that the view from the other side of the pane is free of city soot and grime. While I'm not sure what the specific criteria are for becoming a window washer, I suspect that a fear of heights would be one of those insurmountable obstacles to landing a job in the profession. It's pretty obvious that skyscraper window washing is not an occupation for just anyone.
Although few dentists give it much thought, the same is true for the individual responsible for collections in your practice. It's not a job for just any warm body. Certainly this person isn't dangling from the rooftop, but a slip here and there can make a serious mess of your practice finances. And having someone who is afraid to ask for money in charge of you collections is like having a window washer who suffers from acrophobia. It simply doesn't work.
Not only do practices routinely hire or assign someone poorly suited for the job of collecting payment, they frequently provide zero training. In fact, 99.9% of all employees who work at the front desk have not had one day of professional training. Yet these individuals have the practice's financial health hanging in the balance while they teeter between too timid to ask for payment and too flexible to insist that patients follow practice financial policies.
Although we've seen marked improvements in practice collections over the past 20 years, this is largely the result of patients becoming much more comfortable using various payment options that are available to them including credit cards and patient financing programs, such as CareCredit. Nonetheless, skyrocketing accounts receivables are leaving many practices poised to take a serious financial spill.
The majority of those responsible for ensuring the fiscal health of the practice are very feeling in their temperament type. In other words, they are those warm, fuzzy individuals who really want to be liked by everyone. There is nothing wrong with this temperament type; in fact, they tend to be very good with patients. However, asking for payment or handling a patient who balks at the office financial policies can be extremely challenging – if not impossible - for these employees. Without proper training in effective collections, the employee just agrees to whatever terms the patient offers. “How about $10 a month?” says Mrs. Smith whose about to start a $1200 treatment plan. “Uh, sure. No problem,” says no-collection-training Carol.
In other cases financial policies are simply non-existent because the doctor fears that patients will be offended by payment requirements . In still others, the doctor performs treatment without any regard for whether the patient can pay, leaving the collection “problem” for the front desk to handle.
Stop allowing your financial health to dangle without out a safety net. Start with a basic collection expectation. For example, your accounts receivables should be no more than one month of what the practice produces. In other words, if production is $80,000 per month, there should be no more than $80,000 owed to the practice. You should also see a 98% collection ratio every month – that's 98 cents on every dollar. In some situations, the collection ratio needs to higher, particularly in offices whose percentage of accounts receivable over 90 days past due is more than 12% of total accounts receivable .
If the office is collecting assignment of benefits from insurance companies, the front desk should be collecting from patients 45% of the monies that were produced that day. If the dentist is not accepting assignment of benefits then the dentist should expect the front desk to be collecting in the high 90s over the counter because it is considered a cash practice.
Next week, five expectations to financial freedom.
If you have any question or comments, please email Sally McKenzie at email@example.com.
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