June 1, 2005
by Jennifer de St. Georges
There are three principles I’d like to share that will help your practice communicate more proactively with patients about finances. Before I do, I’d like to tell you about the day I learned the secret to asking patients for money and making collecting fun. Many years ago I had a patient named Sally Tatum. Sally was about four foot two and she could literally walk past the front desk, (I couldn’t see her because the counter was so tall), leave the building, get in her car, get on the freeway, and be gone before I even realized she had ever left the clinical area. Invariably that meant Sally never paid for her dentistry. Once we realized Sally had left, I would call and inform her the next time she came in she would need to bring me a cheque. She would agree, and then somehow manage to come in, see the dentist, finish her appointment, and once again bypass the front desk–without paying.
One day I thought of a plan. We decided to put a lock on the inside door that took the patient from the business area back into the reception room. The next time Sally Tatum came in, she completed her dental visit, and headed for the door, but this time it didn’t open because I had the release under the counter. “Sally Tatum, how nice of you to stop,” I said. “I believe we had an agreement that you would bring in a cheque today.” She smiled sheepishly, put her bag on the counter, opened her wallet, and handed me a beautifully creased, perfectly folded cheque (for the four hundred dollars that we had agreed upon). When I looked at the date, it had been made out three weeks prior to our conversation. Then it hit me. I realized this was simply a game. Her goal was, and always had been, to get to the freeway as often as she could without giving up the money. My goal was to effectively communicate and enforce the financial policies and procedures of the practice. The day I realized that this game can be defined by three principles was the day collecting became fun.
THE FIRST PRINCIPLE: Inform before you perform
The first principal of effective financial communication is– inform before you perform. This principal relates both clinically (known as informed consent), and to a practice’s financial policy or how you handle money issues. I believe the patient should never have to ask anyone in the dental office, whether it’s the dentist, an assistant, a hygienist, or a member of the administrative staff “How much is this going to cost?” Before you can communicate your financial criteria, you have to create them, and unfortunately, too many practices simply haven’t taken the time to clarify patient policy when it comes to finances. To create an internal financial guideline, list every situation dealing with a patient that has a possible financial component and then list your practice’s procedure for handling it. For example, when a patient misses an appointment–do you charge for the no-show? If so– what is the fee? Do you charge for bounced cheques–and how much? Once completed, your internal financial policy should be posted in a private area of the office and made readily available so that any member of the staff can access it when needed and follow proper procedures.
Using written financial agreements is another way to ensure effective financial communication with patients. Financial forms should not only cover treatment and fees, they should also inform the patient about the guidelines in effect. Once treatment has been agreed upon and the method of payment has been set, keep the information easily accessible in the patient’s record and on the computer.
Should doctors discuss money?
Practices are often unsure of the role the dentist should play when it comes to communicating finances to patients. Frustrations can often arise when the administrative staff isn’t given proper direction and authority to handle the practice’s financial issues. The role of the dentist is to set the proper standard in financial communication and to empower his/her administrative staff to enforce the financial policies of the practice. The general rule I have taught for years is that the dentist should not get into the subject of money with patients. There are, however, three exceptions where I believe it is appropriate for the dentist to discuss fees. When working in an emergency situation, the patient is in the chair, x-rays have been taken, and the diagnosis has been made, I don’t expect an administrative staff member to walk into the clinical area to tell the patient about how much treatment is going to cost. The dentist needs to be prepared to discuss his/her recommendations and the fees attached to each.
The second instance is when there is a change in treatment. When the buccal pit becomes a four-rooted endo and a crown, the dentist needs to stop and inform the patient so that there are no surprises. The final instance is during the consultation. But in this instance the dentist should only talk about the cost of treatment–not how the fee is going to be paid. That discussion should be left to administrative staff in the majority of cases.
THE SECOND PRINCIPLE: If you don’t ask–the answer will always be “no”
The second principal of effective financial communication is –if you don’t ask, the answer will always be “no.” Many years ago a dental collection agency told me that, in their opinion, 85 percent of all monies could be collected at the front desk if somebody would only ask. Setting proper expectations and communicating financially with patients should start prior to treatment. Accounts Receivable only becomes an issue if you haven’t effectively communicated and secured an “emotional buy-in” from the patient in regards to the financial agreement. Occasionally people come up to me during my seminars and question why I stress communicating with patients prior to treatment so much. They often say it’s just as important to talk about small claims filing and collection calls. Then they go on to share their success in going to court on the behalf of the doctor and the knowledge they’ve acquired about small claims. I listen intently and then respond with two comments. One–you’ve gone to court and won the judgment but you still haven’t got the money. Two–if you put that same energy into communicating with your patients prior to treatment, you probably wouldn’t have an accounts receivable problem in the first place. A better use of time and energy is proactive communication.
THE THIRD PRINCIPLE: Make statements and avoid open-ended questions
The third principal of effective financial communication is– make statements and avoid open-ended questions. Most dentists, hygienists, and other clinical staff have been trained to ask patients open-ended questions. How long has the tooth been hurting? When was the endo done? How long has that tooth been extracted? When dealing with patients clinically, asking open-ended questions is appropriate and encouraged. But administratively, the worst thing you can do is to ask a patient a question in an environment in which you can’t control the response. For example, if you ask the question, “Would you like to pay, Mrs. Smith?” and Mrs. Smith says “No,” you can’t blame Mrs. Smith for the answer. You gave her permission to answer in the way she felt most comfortable. A better choice is to make statements. “Mrs. Smith, the charges today are…” and then go through the different ways the patient can pay.
The final and often overlooked piece of the puzzle in effective financing is to ensure your patients have flexible payment options that do not harm your practice’s productivity and bottom line. There are three financial options that I recommend practices incorporate; prepay, retail credit cards, and patient financing. With prepay, the money is in your bank account prior to treatment so you virtually eliminate short-notice cancellations and no-shows. If you offer patients a prepayment courtesy, inform the insurance company of the discounted rate. The second option I recommend is a
retail credit card like MasterCard or VISA, because the practice is paid within 24 hours. The third option I recommend is a patient financing program. This financing option pays you within two days of treatment and allows your patients to make small monthly payments that fit into their budget. Non-productive financial options, such as pay as you go and half down and half on the second appointment (both encourage short notice cancellations, no-shows and piecemeal dentistry) and carrying accounts in-house (A/R and collection expenses) should be discontinued in my opinion.
By following these principles and making a commitment to be proactive with your patients, you’ll not only improve financial communication — you’ll make the game of collecting money more rewarding — and fun.
Jennifer de St. Georges is an internationally renowned dental practice management educator. She has spoken at virtually every leading dental meeting in the U.S., Canada, and the UK, and has written articles for the prestigious international “Journal of the FDI.”
Reprinted with permission, Dental Economics, September 2004.