Let’s get one thing straight: almost every dental practice in America has accounts receivable over 60-90 days… you are not alone!
Being owed money is a fact of life. Such as plaque and tooth decay, you can do a lot to reduce it; but it’s always present, and the key is to effectively minimize it.
Dentists currently have unprecedented financial pressures due to increasing practice acquisition costs, human capital, equipment and operational expenses. Everyone is struggling to produce more while making less in an increasingly competitive environment. Simply put, dentists are more than ever actively looking for solutions to improve their profitability and efficiency of their businesses.
If you are frustrated with patients that owe you money, if you feel like you are working hard and not earning enough or if you are evaluating your best billing practices, this article is for you!
Managing Insurance Is Difficult and Time Consuming.
Insurance has become a game of cat and mouse with stagnant reimbursements that often don’t budge for years: https://www.beckersdental.com/benchmarking/34177-reimbursement-rates-to-drop-2-7-for-dentists-5-stats.html . There are an infinite number of plans, varying deductibles, co-insurance and out-of-pocket maximums. Managing this part of the practice is downright exhausting and why shifting to outsourcing to a virtual team of insurance billers is worthy of consideration. I have found there is no one-size-fits-all; they have different options and are proficient in various software. Some charge hourly or, more commonly, a percentage of collections. I have invested significant time and resources vetting and developing relationships with these companies so that I can confidently connect you. Regardless if you choose to outsource or keep it in house, the patients’ portion is contingent on this being done efficiently.
Patients Have Less Money to Go Around.
Once your patient has obtained their primary objectives…their smile looks fantastic, they are out of pain, the tooth is gone, etc., what is their motivation to pay? Surely if your patient is a moral person and they have sufficient financial resources, they understand that a contract exists. You provided a service, and they are obligated to pay you for it. However, this is not the current state of many living in the U.S. According to https://www.cnbc. com/2018/01/18/few-americans-have-enough-savings-to-cover-a-1000-emergency.html only 39% of Americans have $1,000 in savings to cover an emergency. You must make it easy for the patient to pay you: being empathetic and creative is key!
Life Happens, You Must Become a Priority.
Job loss, divorce, medical problems, holidays, death, vacation, car troubles…it’s inevitable for all of us. As soon as your patient walks out the door, there is a noisy world of choices, decision making and consequences that take precedence. I would argue that your biggest competitor to getting paid is the chaos of human existence. To make matters more difficult, being turned over to a collection agency is not that big of a deal. As many as one in three is already in collections with other vendors https://money.cnn.com/2014/07/29/pf/debt-collections/index.html. Since there are very few natural consequences after the patient has been seen, you must create them artificially. You can attempt doing this yourself or consider hiring a company like mine to take the heat off of you. The key is to encourage the patient to not only pay but come back into the office for further treatment, not creating drama and negative reviews.
People attend to core needs, and you are not on the top of the list.
Need proof? Look at how many people have temporary crowns and never come back for the permanent to be seated. Check out your patients’ Facebook pages and see the last vacation, new car, iPhone or manicure they have received yet they still have not paid you! Very often what people say and do are entirely different. A great refresher is to go back to your Psychology 101 course and check out Maslow’s hierarchy of needs. Continue to strive to be a priority on their list of financial obligations! It is my opinion that with the increasing evidence on the oral-systemic link, the dental profession is crucial in maintaining health similar to a primary care physician!
Are you asking for the money?
It’s very simple but often not done properly. Have you listened to what is going on in the front? When it comes to money, if you don’t ask, you don’t get; it’s as simple as that. Who wants to pay when they can delay? Almost all of us would rather pay later. We are not bad people but simply taking advantage of the opportunity. Make sure your team is asking politely, firmly with tact (even adding humor)…it is extremely effective. You wouldn’t go to the grocery store or gas up without paying. Why is the business of a dental office different? I will tell you why – because we make it so! One can dramatically boost your over-the-counter collections by simply asking! Persistence wears down resistance!
Do you have the correct team member at check-out?
Does this person have exceptional emotional intelligence, communication and people skills? Or are they weighed down by their own financial problems, lacking confidence, mean or simply choose to not have candid conversations with your patients? Hav- ing the wrong person can drive your patients away and ensure you don’t get paid. Make sure you set up proper expectations and give feedback on their performance. Do they get rewarded for successful collection, or are they simply trading their time for a paycheck? Do they know what is expected of them? Watching what happens at the front will surely help you identify opportunities for improvement.
Are you the weak link?
If you allow patients to undermine your staff by coming directly to you for sympathy on repayment, how does that make your team feel? Empowered or demoralized? Your front office may not tell you this, but I promise they will not only resent you but learned helplessness will occur. Why should they care more about your money than you? If employees don’t feel appreciated and valued, they will not perform and give that extra effort when it’s needed most.
Do you care enough?
We know you have an interest (or you would not be reading this article), but do you exemplify the leadership traits necessary to run a high-performing office? Do you see your front office team as simply worker bees or do you empower them to live up to their potential? Do they have skin in the game? Having candid conversations about your A/R, where it currently is and where you want it to be and appreciating and rewarding people are a great start. Spend some time introspecting; it is a painful exercise but crucial to your progress.
I hope you enjoyed this article and that it has helped shed light on improving the profitability of your practice. If you just implement a couple of these key strategies, you will see a measurable improvement in your cash flow, and your operations will improve.
On a side note, even Ninjas do not get paid occasionally; don’t take it personally. Simply put, it’s the cost of doing business, and running a dental practice has both risk and reward. For perspective, step back, and you will realize the patients that owe you are most likely a very small portion of the grander trajectory of your practice.
Should you wish to discuss these strategies further or need help with your insurance billing or patient collections, please reach out to me.