Make the Most of the Mid-Career Practice
It wasn’t long ago that doctors did not accept major consumer credit cards as a payment option at their practice. Instead, patients paid with cash. If they were unable to pay cash, they declined or phased treatment or the practice billed them -- in effect, granting them an interest-free loan. Over time, dentists were given more education both in school and in industry seminars about managing their practice, following sound business principles. As a result, dentistry has advanced in its business acumen. Today, dentistry and the options patients are using to pay for their treatment is undergoing another evolution, as the majority of practices now also offer payment plans through a financing partner.
Offering payment options benefits both the patient and practice. Patients can fit more comprehensive, esthetic and cosmetic dentistry into their lifestyle with a low, comfortable payment. As a result, practices experience higher treatment acceptance, increased production and decreased A/R. In fact, the Academy of Dental CPAs, ADCPA, recently released a landmark study that verifies offering CareCredit, the country’s leading patient financing program, “…significantly and positively impacts key financial metrics within the practice.”
The Dynamics Causing the Evolution
According to the 2005 Dental Economics Practice Survey, between 52 and 61 percent of practices currently use a financing program. These results are supported by Dental Practice Report, whose 2004 survey shows 55% of survey respondents offer a patient financing program and by the American Academy of Cosmetic Dentists with 82% of their members also offering this payment option.
There are many reasons both doctors and patients are looking for a financing solution beyond cash, major consumer cards and in-practice billing. For patients, new technology has created an increasing demand for more comprehensive and cosmetic treatment, resulting in a higher out-of-pocket cost. Patients want the dentistry and need a convenient payment option. And, national banking data indicates the average person has only $300 available credit on their consumer cards, so these may not be a viable payment option for all patients.
Today, doctors recognize it is no longer financially prudent to loan money to patients, especially when treatment costs thousands of dollars, and assume that risk of nonpayment.
Offering A Financing Program Makes Patients and Practices Healthier
When doctors make the decision to offer a patient financing program as their practice’s payment plan, it not only helps patients get the dentistry they want and need, the practice benefits as well. The ADCPA’s 2005 nationwide financial study analyzed the impact of CareCredit on practices compared to offices without a program. The results were significant.
The key finding of the analysis concluded that practices without a patient financing program increased their gross annual production by only 4.1% compared with the 25.3% gain achieved by practices enrolled in CareCredit. When compared to the average annual gross practice production in the U.S. of $600,000, a 25.3% increase represents $151,800 per year. Practices that did not offer a program had an average increase of only $24,600 per year.
In addition, practices offering CareCredit experienced on average:
The Accounts Receivable Trends Report stratified outstanding payments by aging categories (i.e. 0-30 Days, 31-60 Days, 61-90 Days, and over 90 Days). Practices utilizing the CareCredit program realized a 37.7% improvement in total Accounts Receivable aging, compared with a 3.8% improvement by practices without a program. In addition, the average outstanding payment was reduced by 41%.
Commenting on the study findings, Michael J. Testa, President of CareCredit noted, “For years practices and dental practice management consultants have known that patient financing makes a difference for the patient and practice and it’s great to have that officially validated. What we’re most excited about, as indicated by the ADCPA results, is the extremely high level of satisfaction practices have with the CareCredit program. 98% said they are ‘very likely’ or ‘likely’ to recommend CareCredit to others. This is important to us because we work hard every day to make CareCredit the fastest and easiest program available.”
Dentists can view a complete copy of the ADCPA’s Impact of CareCredit on U.S. Dental Practices by visiting www.carecreditworks.com or they can contact CareCredit at 800-300-3046, ext 4519.
Studies show that people who have dental insurance benefits visit the dentist more often than those who do not. Another year is drawing to a close and the holiday season is coming upon us. It is time to send out the “use it or lose it” insurance letter.
Sending it out now allows the patient to schedule ahead and reserve the time that best meets their needs and allows the dental office to get a picture of what will be needed for the scheduling in days ahead. The insurance letter should address the dates that the office will be closed or any change of the regular hours during the holiday season. Patients are often disappointed to learn that you are closed when they are available to come in. College students will be home and schools will be closed. This is a good time to come to see the dentist for routine visits and any necessary restorative.
If you are on the PPO network, you may want to do your homework and determine which of your insurance plans pay on the seat date versus the prep date. You do not want to be caught delivering crowns in January that were prepped in December when you need to use up those 2007 benefits.
Print the unscheduled treatment list including any pre-determined dental claims and start calling these patients. Many will appreciate the concern. Take a look at last year’s production for November and December. Were you able to meet the needs of patients who wanted to come in? If not, you may want to add hygiene or doctor days to accommodate patients requesting appointments. Tune up your ASAP list or Tickler File for patients who may want to come in at the last moment. The holiday season usually marks the beginning of the flu season so be prepared for schedule fall-out.
Patients with larger treatment cases can use both yearly benefits by coordinating the preparation and delivery times to crossover to the next year. As a courtesy, put together some temporary cement kits for patients who will be in temporaries over the holidays. If you will be out of the area over the holidays, inform the patient as to who will be on call and give them the contact information.
To help you get started, the following is a sample of the letter:
Don’t Forget to Use Your Dental Insurance Benefits Before the Year is Over
Dear Valued Patient,
Another year has flown by and I want to say thank-you for your trust and confidence in my dental practice. Many patients do not realize that the dental benefits they have will not rollover into the New Year. If you do not use those plan benefit dollars you will lose them. For instance, if your plan allows you to have $1500 for 2007 and you have used $700.00—you will lose $800.00 if it is not applied to dental services by the end of December. The cost of these benefits is on the rise and many employers are cutting back on benefits. It makes sense to use every dollar that you are entitled to and for which you have paid. If you have a Health Savings Account or a cafeteria plan, you may want to use these benefits also.
Our goal is to assist you and your family in obtaining optimum dental health and saving money too. You don’t have to start the treatment now, but it is wise to schedule the time that you request before the “rush” begins. The end of the year is busy so give us a call today to reserve the best time for you.
Dr. Stanley Goodbrush
Some informational brochures about services and products offered in your practice can accompany this letter. You may even want to offer a holiday special on teeth whitening kits or electric brushes.
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