Linda Miles

In 1977, I heard a phrase at my very first dental CE Seminar in Williamsburg, VA that shaped my career as a budding Practice Management Consultant and speaker. Dr. Omer Reed said: "People who owe you money don't like you!" 

Over the years, I added several other phrases to that as I saw his statement ring true in so many practices. The two I've added are: "People who owe you money break appointments", and "People who owe you money refer others who don't wish to pay on time". Over many years of visiting more than 1200 practices across North America and in several foreign countries, I can attest that in-house billing is a true nightmare.

Some pretty savvy dentists have turned, or are thinking of turning, to the old fashioned way of in-house billing. This "return to the past" thinking has been rising the past few years by dentists who think they are saving money by becoming a lending institution. Some have even touted how much money they will make on the interest they will be charging to patient accounts. Trust me: The negatives far outweigh the positives!

Success is All About Relationships

Let's begin with relationship building which I believe is the foundation of patient retention and success. Dealing with past due accounts causes caustic relationships and unhappy patients. Receiving a statement with a demand note or a past due memo annoys patients and makes them tell others how "greedy that dentist is". Then after the past due phone calls to try to collect the account in arrears, patients who have no money or no intention of including "the rich dentist" in their outgoing checks that month start the cycle of the avoidance game. Not answering messages, ignoring the statements, and missing future appointments.

If the dentist added all the employee's time involved in hundreds of statements, numerous calls and the cost of missed future appointments, it could be two to four times the amount of the past due account. After all, it costs the practice the same amount to collect a $50 past due account as a $500 one. And if the financial coordinator totals the money that is owed to the practice with smaller (less than $200 balances), it is typically 60-70% of the Accounts Receivable.

The Root Cause of Missed Appointments 

Failed appointments are the number one topic that dentists and teams come to hear at practice management courses. And guess what? Thirty years ago it was the same HOT topic and I bet thirty years from now, it will still be top-rated. There are many causes (and solutions) of broken and changed appointments. Besides a breakdown in communication from the dentist and team members to each patient of the importance of the next visit, mis-guided communication in print or verbal forms that actually cause wasted chair time, untrained administrative team members that do not know who to discourage (in a very nice way) an attempted cancelled appointment, the real culprit is: The patient has an account balance and does not want to be confronted about it or they do not want to grow the past due account further, so they no-show.

Open chair time in hygiene or the doctor's schedule is wasted time that can never be recovered. Team members want increases in pay and benefits but many have no idea that money in the bank instead of on the books, and reduction of wasted chair time are the two keys to practice success which means the dentist can share those rewards with all.

Other "money on the books" versus in the bank nightmares includes:

1. Divorced parents who want the other parent to pay for the dental treatment of the children. Getting in the middle of a divorce is not a good way to develop business relationships with either parent or the embarrassed child patient(s) for that matter.
2. The dozens of phone calls that come into the practice after statements go out with patients calling with questions or complaints. It is never good for other paying patients to hear those conversations at the desk. Paying patients are thinking, "Some patients obviously don't pay for treatment at the time of service, why can't I pay on time too?
3. Female patients who change their last names back to pre-marital status, those patients who move and leave no forwarding address, and those who move from practice to practice with fictitious information. That group of patients can sometimes be 2% of your patient base. Two percent of last year's production is a lot of money...not to mention time involving in tracking down the "dead beats" that had no intention of paying the practice in the first place. Younger dentists and younger team members at the front desk are bigger targets for those types who know how to "work the system".
4. The time involved in turning bad accounts over to a collection agency that keeps 40-50% of what they collect. Or the time involved in your financial coordinator processing forms for Small Claims Court with either the dentist or the FC having to appear when the court date is set.
5. Auto payments on credit cards with closed accounts, disputed account balances, security issues for holding account numbers on file, or the patient's insufficient funds.
6. The biggest loss of all is the amount of time employees must spend with hundreds of monthly statements, billing repeatedly with no responses, phone calls on past due accounts and the negative environment all that causes. Think about all the other positive administrative duties they could be doing throughout their busy days such as: Filling openings in the schedule within five minutes of an open chair time, reactivating past due hygiene patients to build the "backbone" of the practice, working the incomplete treatment list to touch base with every patient who wanted to "think it over" or "talk to my spouse". Dental team members need TIME and TRAINING to dig deeply into the patient files...spending many unnecessary hours trying to be debt collectors and billing clerks is NOT the way to build the modern dental practice that wishes to reach its full potential.

So what is the solution to all these issues with in-house billing?

In my opinion, patient financing and having a clearly defined and signed financial agreement with each patient is the only way to practice successful dentistry. The best financial agreement can be downloaded easily from CareCredit, a company that has done more to enhance patient relationships through effective patient financing than any other in dentistry. They make my philosophy of TNT collections (today, not tomorrow) come alive. And, through better staff time usage, the average practice increases by thousands of dollars per month per dentist.

If a practice is spending time with in-house billing and collections, the small percentage fee to offer patient financing is miniscule in comparison. To have the money up front with NO RECOURSE to the practice, to relieve the team of the stress and hours of added work, to enhance patient relationships and change the work environment from negative to positive energy, and greatly reduce wasted chair time: BEING ONBOARD WITH PATIENT FINANCING is a NO BRAINER.

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