How would you like to pay for that?
Increasing your Case Acceptance by Presenting Patients with Options
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:
- 25.3% increase in number of “Procedures Completed” in relation to “Procedures Planned”
- 21% gain in the total dollar amount of procedures for “Procedures Completed” relative to “Procedures Planned”
- 98% increase for implant services
- 75% increase in acceptance of oral surgery
- 71% increase in acceptance of restorative treatment
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.
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