How to Handle Collections and Grow Profits
Developing a sound financial policy and clear collection protocols are important steps to growing practice profits. If you’ve come that far, you’re on your way to true practice success and profitability – but you’re not done. So what comes next? Here are other factors to consider, all designed to help you create a steady cash flow in your practice.
1. Hire the right person to handle collections. The truth is, not everyone can handle this position. It’s important to find someone who is assertive, polite, tactful, goal oriented and confident. The team member tasked with collections must understand it’s his or her job to get payment from patients.
Remember that this won’t happen without your support. Provide this team member, usually known as the Financial Coordinator, with the training, tools and scripts needed to succeed. In addition, resist the temptation to make exceptions for family and friends when it comes to payment polices. You might feel good helping loved ones out, but trust me, this does nothing but undermine the practice’s ability to develop an effective financial policy.
Train your Financial Coordinator to make effective collections calls. The calls should never be confrontational – the goal is to work with the patient to resolve the situation and collect payment.
2. Hold your Financial Coordinator accountable. You don’t want more than one person handling collections in your practice. Hire the right person and then make this team member accountable for collecting money, generating accounts receivable and following up on delinquent accounts.
3. Look at the status of your accounts receivable. The thought of this puts many doctors into a cold sweat. If your practice is struggling, you know the numbers could be pretty ugly. The last thing you want is to find out you have $175,000 or more in uncollected fees eating into your bottom line – money that could be used for equipment upgrades, team training, raises, even your retirement. Yes, the numbers could be pretty depressing, and we all know ignorance is bliss. Unfortunately it’s also expensive. As painful as it might be, you have to know what’s happening with your accounts receivable.
Ready to face the numbers? Here’s what you need to do:
• Every month, generate an aged accounts receivable report that lists every account with an outstanding balance and date of last payment. The accounts receivable report also should “age” the receivables showing the “current” column, which is revenues produced in the last 29 days that have not been collected. It should also give you a breakdown of accounts that are 30, 60 and 90 days past due.
• Examine the charges in the report’s “current” column. These are uncollected monies produced in the past 29 days. Because the practice should have a minimum of 45% over-the-counter collections for the month, there should be no more than 55% in the current column awaiting insurance reimbursement.
• Remember to always run the report with credit balances. Why? Credit balances need to be added back to the total accounts receivable.
Did your totals exceed monthly production? If the answer is yes, there’s a problem in one or more of the following areas that it’s time to address:
Billing. Don’t wait to send patient bills out once a month, and remember to include self-addressed envelopes when you do. It’s also important to include the payment due date. And remember, you might receive payment faster if patients can pay online. Consider adding electronic billing as a convenient option for your patients.
Remember the best way to communicate is by making a phone call to collect first. While putting a delinquent message on a statement is easy, getting an answer or a credit card number over the phone brings faster results.
Insurance System. Your Financial Coordinator should know how much of the bill the insurance company is expected to cover. The patient should be expected to pay the bill and receive reimbursement from the insurance company. Make sure patients understand this when you’re explaining treatment costs.
4. Communicate the policy. Keep your financial policy updated and don’t stray from it. Make sure both patients and team members are aware of and understand the policy.
Patients expect to pay you for services rendered. The ones who don’t pay promptly are typically patients who cancel at the last minute or don’t show up at all, mainly because they don’t understand the value of the care you provide. Educate your patients about the importance of maintaining their oral health, and make sure they’re aware of your payment policies in advance. That way they know exactly what to expect, and are happy to promptly pay you for the exceptional care you and your team members provide.
For additional information on this topic and more, visit my blog: The Lighter Side
Interested in speaking to me about your practice concerns? Email email@example.com
Have you noticed that the needs and mentalities of your staff have changed over the years? What you are observing, and is likely causing you a certain degree of frustration, is the changing of the ‘guard’ from Baby Boomers to their children – the Millennials. Since the Boomer generation was so large, there are relatively few Gen Xers in the workplace compared to the newer, larger wave of Millennials. And with this influx of younger workers, employers, managers and leaders are having to adopt their style to effectively engage these workers and draw out their potential. As you will read next, and as contrary as it might seem, the best approach seems to involve more leadership and less management of these individuals.
This should ideally give you a sigh of relief, as once one has developed the skill set, leading people is actually much easier than managing them. Millennials are a unique group; they want to do well, but they want freedom to try new jobs. They care about mobility and their happiness, including work-life balance. They simply cannot be managed the way other generations have been managed. They must be inspired and enabled through BRAVE leadership.
The BRAVE leadership framework is comprised of Behaviors, Relationships, Attitudes, Values and the Environment, building those from the outside in through context, purpose, strategy, message and implementation. Applying those to Millennials is most easily framed if we go through each component in reverse order:
Environment – Context
Values – Purpose
Attitude – Strategy
For Millennials, the line between work and personal time is one such artificial boundary. As one student remarked at a CEO Connection Forum on Managing Millennials, “What I do is incredibly convergent with who I am.” It makes no more sense to them for you to worry about their doing personal emails and texts during “work” time than for them to worry about doing work emails and texts on their “personal” time. There is no work time. There is no personal time. There is no work/life balance. There’s just life.
Relationships – Message
Carlson COO David Berg gets this. He has set up a reverse mentoring program so that his Millennial employees can mentor him to help him understand future guests.
Behavior – Implementation
You and them. Treat Millennials with the same respect with which you want them to treat you. Give them access to information. Forget “need to know” limitations. They hunger to know what’s going on and how their jobs fit into the organization’s purpose – which should have a component that betters the world.
Work and personal. Get over this historical divide. The two blur for Millennials. Accept it; embrace it.
Individual and group. Leverage Millennials’ bias to work in networked teams. Encourage and applaud their joint efforts.
Face-to-face and electronic. Leverage and let them leverage the electronic tools with which they are so familiar. Text and chat are as valid forms of communication for this generation as were PowerPoint slides in darkened rooms for Baby Boomers.
Inspiring and enabling. Leadership is about inspiring and enabling others. For Millennials, enabling is inspiring. Do both. And do both together.
Dr. Gale provides coaching and training to enhance leadership skills, interpersonal communications and team building. If you would like to learn more, contact him at firstname.lastname@example.org
You Can’t Make These Things Up!
I often get calls from offices around the country with stories and questions that are pretty amazing. If you have been in practice for any length of time, you probably have quite a few stories as well. Clients of McKenzie Management receive information and training on how to handle a vast array of situations. When the staff is equipped with scripts on what to say and ideas on how to handle certain circumstances, problems are easier to deal with.
Dr. M has a welcoming and homey practice in a small town. Most of his patients have been with him for years; in fact, many were patients as children and are now bringing their children to him. His office is located in a residential area and patients sometimes walk or bicycle to their appointments. It is not unusual for an older sibling on a bicycle to accompany a younger sibling on a bicycle for their appointment, with parents available by phone if any “permissions” are needed.
Last week, Joey, an older brother age 14, accompanied Anthony, a younger child of 10, to his recall appointment. Joey was planning on waiting in the reception area until Anthony was finished. When Pam, the dental assistant, went out to get Anthony, he calmly got up and walked with her down the hall. But then he broke into a run, ran to the back door of the office, opened the door, ran to his bike, got on it and rode away! It all happened within seconds. Pam was left standing in the hall in shock. She quickly told Dr. M what had happened and he went out to the older brother, Joey, to inform him that Anthony was gone.
Joey was quite disgusted with his younger brother and left on his bike right away. Dr. M told Joey to please call when he got home so the office would know Anthony was safe. Meanwhile, Pam called Anthony’s mom to give her the news. Luckily, while Pam was on the phone with Mom, Anthony came in the door of his house. Mom told Pam that she would reschedule his appointment for later next week. Pam told her, “Please come with him. He gave us a heart attack today!” As clients of McKenzie Management, as well as students of experience now, the office has made a policy that an adult must accompany all minor children to appointments.
Here’s another example. Marie is a patient of a McKenzie dentist now, but was formerly a patient of Dr. S. She had been new to Dr. S’s practice, having found the office by way of a friend at her work. Marie had a new patient exam, adult prophy, and several restorations. She was happy with her treatment, although she thought the fees were a little high. Even so, she had decided to become a regular patient. That is, until she was approached by staff at the conclusion of her last appointment and pressured to film a positive testimonial for Dr. S right then and there.
The office manager and Dr. S both accompanied her into a private office area equipped with a video camera and a sample script. They asked her to express how happy she was with her treatment and how reasonable their fees were. The script had the language they wanted her to use. They told her that they planned on posting the video on social media including Facebook and Twitter. A release form allowing for the posting was included at the bottom of the script. Marie was flabbergasted! She told them she had no intention of filming a testimonial and hurriedly left the office. Needless to say, she never returned.
Word-of-mouth and written or filmed testimonials are very powerful for obtaining office referrals, but should never be solicited in such a heavy-handed manner. A McKenzie dentist knows that at the conclusion of treatment it is appropriate to say, “We have loved taking care of you. If you have any friends or relatives who need dental care we would be very happy to see them.” Then if a patient is referred, a thank-you card and gift are sent. If the dentist or staff happen to see a positive review on social media, it is also a nice idea to send a “thank you for the kind words” type of letter. Pressuring patients to provide positive reviews will not work, and in fact will likely backfire.
Here is a final story. Petey was a six-year-old boy who received two restorations from Dr. B. Petey had gotten along very well throughout the appointment. He was cooperative, calm, and seemed to be unperturbed by the entire process. Dr. B congratulated him on his behavior at the end of the appointment, and got down on one knee to be level with Petey while talking to him. He said, “Petey, you did a great job today. That wasn’t so bad, was it?”
Petey looked at Dr. B, made a fist, and punched Dr. B in the nose. “That wasn’t so bad was it?” he said.
Working in a dental practice can be an adventure. Certain things will happen that you just can’t make up!
Carol Tekavec RDH is the Director of Hygiene for McKenzie Management. Carol can improve your hygiene department in just one day of training “in your office.” Interested in knowing more about how to improve your hygiene department? Email email@example.com.
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