by Cheryl Pickett

Tips and strategies for managing patient-financing programs

It’s safe to say that for the majority of families considering orthodontics, there are three big questions: “How long will it take?”; “How much will it hurt?”; and, of course, “How much will it cost?” Frequently, the answer to that last question ultimately determines whether or not the patient will start treatment.

For most practices, this means that offering and managing patient payment plans takes up a considerable amount of time and resources. I asked several offices to share a few of their strategies for a successful patient-financing program. Robert Ziaja, DDS, MS, Shelby Township, Mich; Tracy Ouyang, DDS, Portland, Ore; and William C. Heintz, DMD, Alton, Ill, and their staff were kind enough to share some insights.

William C. Heintz, DMD
Tracy Ouyang, DDS
Robert Ziaja, DDS, MS

Who’s in Charge?

All three of the offices agreed that the orthodontist should be involved as little as possible once the program is in place and major decisions have been made. Ouyang, who opened her solo practice in 2003, points out that this strategy was discussed and recommended when she was a student. The philosophy that an office is more efficient if the orthodontist focuses on the clinical and the staff focuses on daily operations is working well for her growing practice.

In Ouyang’s office, practice manager Janet Leehmann handles the whole financial process from presentations to late payment follow-up. As her office grows, Ouyang plans to add another staff member or two, but new staff will likely only be trained on the basics as a backup to a primary person like Janet.

Ziaja and his small staff of four try to keep the orthodontist out of the financial conversation as well, but not just for the sake of organization. About 15 years ago he chose to follow this philosophy because, in his experience, when it came to the personal nature of finances, “patients feel more comfortable asking the staff questions.”

If an office is larger, it might take a few more people to manage the financing program. Heintz uses a three-tiered system. First, the patient coordinator presents payment options to the family. Once the family makes its choice, the financial coordinator runs a mini-credit check, finalizes exact details, and draws up the contract once everything is discussed and agreed upon. Third, office manager Ellen Heintz is available to assist with special situations or problems. At this point, the orthodontist may be involved as well. In general, though, she notes, “Things don’t get to us very often.”

All of the offices I talked to agreed that beyond looking for great results, overall cost is another huge factor for most people considering treatment. To address this, each has several options in place to cater to as many families as possible whose insurance won’t cover any or all of their treatment.

Prepay in Full

Of all the options, this is probably the least popular. Even for those who do have the funds, spreading out the payments is still attractive, especially when low- or no-interest options are offered. To provide some incentive, all three offices give a small discount of around 5% to patients who prepay in full. To help patients better appreciate the idea behind the plan and discount, Ziaja refers to it as a “paperwork relief discount,” while Ouyang calls it a “bookkeeping courtesy.”

In-House Monthly Payment Plans

All three offices indicated that the majority of patients take advantage of their in-house monthly payment plan. The big attraction of these plans, of course, is a reasonable down payment and a no-interest payment structure.

The Michigan economy is particularly tight right now, and Ziaja explains that the choice in his practice is simple. “People in this area don’t want something that has interest.” After the initial down payment, as long as payments are on time, there are no finance charges associated with his in-house plan. He has also found that a large percentage of his patients have access to a health care savings account or flexible spending account, and choose to use these funds in conjunction with his payment plan. He suggests that practices bring it up with their patients, as some may not understand how these accounts work or that the money in them can be applied toward orthodontic treatment.

The other two offices have similar monthly pay structures, and have found that setting the repayment schedule to end before treatment does to be an effective practice. The goal for Leehmann and Ouyang is to have patients make their final payment about 4 months before treatment is completed. In Heintz’s office, they’ve also shortened their standard payment plan by a couple of months because patients are routinely completing treatment a bit faster than in the past.

Third-Party Financing

Everyone offers this option as well and, typically, only a small percentage of patients choose it. Reasons vary as to why they don’t, but for patients for whom it is the best choice, there are several vendors who offer outside financing plans.

One that all the practice were familiar with is Capital One Healthcare Finance™ (formerly Orthodontist Fee Plan™) With this plan, patients apply directly to Capital One and send payments to them. The participating office is pretty much hands-off after being paid in full minus a processing fee. Ouyang started offering third-party plans using OFP a couple of years ago and recently added CareCredit™ at the request of a patient. The new program provides an industry-specific credit card that can be used as needed once a patient is approved. Heintz recently switched to a program offered through Unicorn Financial™. Ellen Heintz explains the switch was driven by the fact that the company offers a “no down payment” choice as well as a “no interest option.” The credit scoring is also a little less strict, she says, making it easier for some patients to qualify. The fee to the office is a little higher, but she believed it was still worth changing. “It’s just easier for the patients,” she says.

Risk Assessment

Assessing the patient’s ability to pay and the likelihood of paying is as important in ensuring that patients will be able to follow through on a treatment plan. This assessment can be brief and easily accomplished during initial visits and the discussion of payment options.

Ouyang’s office begins with the premise that everyone intends to pay, but Leehmann also does an informal assessment when she meets with patients to try to determine their payment habits. For example, she tries to differentiate between those who have an overall questionable payment history and those who might be good payers experiencing a time of hardship. This assessment helps her determine the plan that the patient is most likely going to be able to handle, which then reduces their chance of delinquency from the start.

Heintz’s financial coordinator uses a similar process, but takes it a step further by running a mini-credit check on anyone applying for in-house financing. Using the tools provided by Unicorn, for example, she can get a snapshot of someone’s credit history. The report doesn’t show specific account activity, but it does provide an indication of a strong or weak history. If the information indicates a lower rating, she’ll also give the family a chance to discuss their situation to see if anything has changed.

Keeping Things on Track

Most patients enter into the treatment process with good intentions and expectations, but sometimes things don’t work out as planned. One way to keep patients on track is to use preventive measures.

For Ziaja’s office, allowing a longer period to submit payments keeps most patients on track. Patients can take care of monthly bills anywhere from the first to the 15th of the month. This approach is combined with flexibility for families who face financial emergencies.

Part of Leehmann’s job as practice manager for Ouyang is keeping a watchful eye on every account each month. Her goal is to make sure bad payment habits never get started. If someone is late, they get a call within 3 days. If there’s no response, a preplanned series of follow-ups kicks in, including several letters. The overarching philosophy here is that “it’s easier to make up one payment than two or three,” she explains. In a worst-case scenario, around the 60-day point, treatment is put on hold until a payment plan is worked out. However, these instances are rare and Leehmann says that the practice will always “work with anyone who communicates and tries.”

Check out the online Buyer's Guide
For a listing of companies offering financing, check out the online Buyer’s Guide.

Online account management is a new tool that’s growing in popularity with many offices, including Heintz’s. Thesoftware system helps alleviate several common late-payment issues. For example, busy patients don’t have to worry about when they can find time to call the office, and those who aren’t prepared to pay during a visit can log in at any time of day to take care of their account.

Heintz also has an in-house awareness system for patients who reach a problem stage. During regular staff meetings, everyone is made aware of which patients are having payment issues. This makes it easy for anyone who has contact with the patient to direct him or her to speak to the appropriate person and to reach a quick solution.

No matter what kind of options are offered or what obstacles arise in financial relationships, Heintz sums up every practice’s primary goal very well: “We try to give patients every opportunity to continue care.”

Cheryl Pickett is a contributing writer for Orthodontic Products. For more information, contact