It’s easy for those without dental insurance to avoid getting treatment, which ultimately leads to more dental and overall health problems down the road. It’s in the best interest of the provider and patient to offer different financing options for those who need the assistance. What’s more, it opens your doors to new patients who thought they didn’t have access to dental care. Here are some ways to incentivize patients to finance all or a portion of their payments to tighten your bottom line.
Discount programs are offered by third parties to incentivize patients to pay all or a portion of their treatment. This is a viable option for those who need very little dental work, need more dental work than insurance will cover, have health issues that can be complicated by dental problems or are on Medicare. The patient pays an annual fee upfront or splits the fee into monthly installments, then pays out of pocket for the discounted dental services throughout the year. For the dental entrepreneur, it’s less of a write-off than going through traditional dental insurance providers.
Medical credit cards
Most health care providers already accept medical credit cards of some form, like CareCredit. This can be valuable to the dental entrepreneur if the patient is responsible for the fees associated with it. However, dental service organizations (DSOs), in particular, feel the frustration of managing the regulations associated with medical credit cards, such as when a treatment requires multiple visits and prolongs the patient’s care. As for the patient, medical credit cards have been found to damage consumers’ credit as it is treated differently than medical debt. Oftentimes, though, a dental practice may offer a discount to those who use this financing option.
Asking for patients to pay in cash not only reduces the risk of no-shows, but it also increases your revenue ever so slightly as you avoid paying a credit-processing fee. As a courtesy, dental entrepreneurs often extend a discount to those who pay all in cash. Just be sure to lay out all the conditions of any discount plans to staff members to avoid the risk of embezzlement or fraud. Also be sure to train your employees on calculating accurate assessments so patients come prepared with the correct amount of cash on hand.
According to a report, almost 90% of dental providers offer payment plans, oftentimes with a lower interest rate than a credit card. This leads to increased satisfaction, streamlined management of out-of-pocket expenses, more access to needed care and more affordable dental care for patients. For dental entrepreneurs, payment plans streamline cash flow, shorten days of sales outstanding, reduce accounts receivable and decrease bad debt. Simply put, this option puts the patient experience in the hands of the provider.
The connection between financing options and valuation isn’t necessarily a straight line. The value of your dental practice could decrease if cash flow isn’t handled properly as a reflection of your business practices. Contact the experts at Professional Transition Strategies to learn more ways to run a profitable dental practice.