Reach Higher With Flexible Payment Options
In a world of monthly subscriptions and lower costs, how will your practice adapt?
“Let me think about it.”
It’s one of the toughest sentences to hear in any dental practice. You know your patient needs treatment. But, sticker shock looms heavily over payment conversations. Most dental professionals got into their career to help people and practice medicine—not to become an expert salesperson. This all makes treatment acceptance a complex case for everyone.
Last month, Rob Bay of Dental Intelligence shared how focusing on attrition and case acceptance is often a better strategy for increasing profits than garnering new patients. Consider these three tactics to increase production and your case acceptance rate:
– Refine your internal processes. As Rob explained last month, it’s not enough to make appointment scheduling and reminders part of your practice’s process—you need to measure success and hold your team accountable. The good news for many practices is that measurement nearly always improves performance.
– Optimize your treatment presentation. Dr. Mark Costes of Dental Success Institute notes, “We have to present them with a multiple thousand dollar treatment plan after them knowing us for, what, less than an hour?” Whether it’s a trained sales professional or your hygienist, everyone needs to become a master of the soft skills needed to build rapport and trust.
– Offer flexible payment options. Perceived cost is one of the reasons people don’t go to the dentist. Offering a wide range of ways to pay is one way to mitigate financial fear. The more flexible you are with payment options, the more likely you are to have more patients move forward with the treatment they need.
How Flexible Should You Be?
It depends on your practice’s ability to take on risk. Flexible payment plans can use many variables such as extending the pay period beyond the length of treatment, offering a 5-10% discount for full up-front payment, increasing or lowering down payments or a combination of these types of terms. The point is to think outside the box.
“Patients today are different than they were 15 or even five years ago,” explains Hunter Satterfield, a CPA and new CWA partner. “There are so many subscription services in our culture that are $15-30 a month. It’s the kind of economy our consumer lives in now. We must adapt to a new culture and demographic of patients.”
Hunter notes that among CWA clients, there’s an increasing trend toward offering more flexible payment options, which lowers the barrier to entry and increases case acceptance. However, a well-tuned sales process is vital to this tactic’s success. Not every patient is a fit for flexible payments and dental professionals need to understand when to offer it as an option.
“Sometimes, flexible payment options can be used as a crutch,” he noted. “It’s important to get payment in full or quickly when it’s feasible for a patient. Offering a flexible plan should only occur after exhausting those two options. This involves a lot of scripting, customer experience analysis and tracking of metrics to know when to get the ideal acceptance of payment terms.”
If you are using the right analytics tools in your office to track delinquency and ensure collections, you’ll begin to see a trend. This can identify patients most likely to accept larger down payments or make late payments.
However, delinquency is always a concern with flexible payment options. Practices need good processes in place for follow up and accounts receivable so that case acceptance always outperforms delinquency. Contracting a third party to handle collections can relieve stress and reduce risk on your practice.
“What you can’t have is a 15% increase in delinquency and a 5% increase in case acceptance. Some practices have really good processes and procedures in place and they don’t see an increase at all,” Hunter said.
Flexibility Feeds Growth
When considering flexible payment options, it’s important to keep an eye on contracts receivable as a percentage of production. CWA’s annual Orthodontic Comparison Report tracks this number for orthodontic dental practices around the nation. Offering an indication of a practice’s overall health, the latest report results did not indicate an increase in delinquency.
“The average orthodontic client at CWA has 50-60% still left to collect from their patients that are in braces,” Hunter explained. “If your percentage is above the industry average, it means you have more money to collect in the future. And, you need to have good control over your collections process. If that process isn’t well built out, you’ll experience a much higher likelihood of delinquency.”
Hunter also notes that if your percentage is lower, it doesn’t mean that your practice is unhealthy. It simply means your patients make large down payments or pay in full.
For larger practices, Hunter says that flexible payment options can act as a growth mechanism: “Those that offer flexible payment options have a higher contracts receivable as a percentage of production. But they also have higher case acceptance, which feeds growth and profits.”
Start Adapting Today
How can you begin to offer flexible payment options? Consider a pilot program with only 10-15 patients, meeting very specific criteria. Then, track the results. Is it helping case acceptance? Is it harming delinquency? Are you seeing a shift in your percentage of contracts receivable to production?
Not sure where to start? CWA’s expert team can run the numbers and offer personal insight on if your flexible payment structure is working for, or against your financial goals. Reach out to our team for a complimentary consultation today.