Financial Flexibility

Rosemary Bray

I keep hearing how hard it is to get patients started lately. The economy, job losses, fear, the stock market, the price of gas—all of it adds up to a difficult time for practices and their patients. Here’s a frightening statistic: 3.6 million jobs have been lost in this country in 13 months.

If I’m an orthodontist, I know that I need to be both more flexible and more conservative in a tough economy.

How do I do that? One way is by offering third-party financing. I would not let my treatment coordinator (TC) conclude that since she doesn’t like it when people are not approved, it is just easier for the orthodontist to take on all that risk. I also do not like hearing, “They probably won’t start … I bet they don’t. …”

At this time, the orthodontist cannot be wishy-washy about starting treatment. There is, of course, a difference between being proactive and being unethical. In other words, if the patient needs treatment and may be almost ready to start, instead of recommending observation, as you always have, perhaps suggest starting now.

Many will not start merely due to costs and the economy, and others will start because kids are still a high priority in many families, thank God. I personally believe that when patients come in for an initial exam in these economically challenged times, they are likely more serious than the initial patients orthodontists saw before the crunch time. We have eliminated many shoppers, so realistically you should see an increase in your conversion rates right now. You may be doing fewer exams but getting more starts.

Payment Options

To increase your conversion rate, your first job is to design payment options that maximize the use of third-party financing, even if you have never used it before. Fearing that someone won’t qualify is understandable, but it is not a great reason not to offer the option. It is understandable to be frustrated when people aren’t accepted, but you should know that “instant denials” are people who are not credit-worthy. You should not feel bad that they aren’t approved, because this means they cannot afford your treatment. Period. These families, quite honestly, have greater needs than orthodontics right now—they are in bad shape. Adding to their distress is doing them an injustice.

Let things get better for this family and they will return one day. Create a Raving Fan, even if they cannot start, and tell them you are there for them when they are in a better position to begin. Help them feel better than they already do! Offer guidance, see them regularly, send them your newsletters, holiday cards, birthday cards, etc, so they have a feeling of belonging even though they do not begin treatment right now.

Some offices are taking small monthly payments and building a credit balance so when the family is ready, there is already a small to sometimes good-sized account built up to help with or take care of the initial payment.

The Four Family Groups

Springstone Patient Financing publishes a booklet called The Ten Essentials of Case Acceptance that makes great sense to me. The booklet breaks families into four financial groups. Group 1 has the full treatment fee available and is ready to pay on the day they arrive at your practice. Group 2 has the initial payment. Group 3 does not have the initial payment saved. Group 4 is not credit-worthy.

You should design your financial presentation around the Group 3 families. Group 1 and 2 will start regardless, as long as they have been sold on the value of your treatment. (This is a separate issue all about the new-patient start process, right? If you’re not sure about how to do this, attend a TC training course. And yes, I do give them annually.) Group 4 can’t afford it. Bummer, but that is the fact. Group 3 is where you can save some starts that might otherwise get away.

The Presentation

The way to convert those Group 3 families is by presenting the third-party financier in an upbeat, positive, reassuring way. And you do it in the right order, with the right words and the right objection handling. This is huge. So many TCs present third-party financing as a “last resort,” even changing their tone of voice when they get to it. No! No! More people will be unable to qualify in a down economy, but it doesn’t make sense to throw the baby out with the bath water. Be happy you have this!

In my mind, a family who says, “We don’t want to pay interest,” but can’t afford the office plan hasn’t been sold on the treatment itself. If they really want it, they are certainly going to finance it if that is the only affordable option for them.

In these situations, it is usually more a question of a TC who isn’t comfortable from a verbal skills standpoint, or families who haven’t been sold on the value in the first place. That means more training.

I also think people forget about some of the “smooth” comebacks to such concerns. If families are concerned about interest, they can make an initial payment (of any size) and finance the rest. Now you have been completely flexible, reduced their interest expense, and still not hurt your finances. Another strategy to make families feel better about setting up financing is reminding them that they can reduce interest expenses by paying a loan off quicker than the term dictates. Having the orthodontists be the bank is not the best way to make the patient feel better.

On some level, if they don’t want to take on debt, they aren’t committed to moving forward, interest or no interest; they owe a bunch of money once they start treatment. Again, this has more to do with selling the value than how it is paid.

Since we are dealing with the TC’s emotions, it is important to set realistic expectations. If she presents properly, you should see about a 50% to 60% approval rate. Affluent areas will show higher approval rates. Co-borrowers can save a few more starts. Poor presentation, flexing your office plan, pulling credit, etc, can drive that down into the 30% range or less. You have to commit to using financing well or it becomes a self-fulfilling prophesy. Dabbling with patient financing always leads to discouragement, ironically “proving” that it “doesn’t work.”

Dealing with Denials

Now, what to do with patients who are denied financing? One tip for you: When an applicant is “instantly denied” by Springstone, that means they have a FICO score below 600. I would never flex my in-office plan for such a patient (because they are currently not paying their bills). If they are denied by Springstone, but not instantly, then at least you know they have challenged credit but are not completely hopeless. You might want to consider a “modified start” of some sort (such as lay-away or a slower clinical treatment plan until they establish a payment history with you). Don’t count them out or make them feel bad. Help them!

Another option for families who are not instantly denied (and even ones who are) is to find out if there is anyone else in the family who might “sponsor” the child for braces. Typically, if one spouse has poor credit, the other does as well, so adding a spouse as a co-borrower doesn’t usually help much. But a grandparent, uncle, or aunt may be in better shape. It is worth asking. I provided ortho treatment for my grandson this year. Others will too.

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In the sponsor situation, the extended family member will actually apply as the main applicant for the loan. They receive the coupon book and make the payments. (The parent can pay the sponsor back, but that is between them.) The bottom line is that you get paid and the patient gets a gorgeous smile. It’s a win-win.

It’s definitely a challenging environment right now. You need to be more empathetic and flexible with your families. Many are really hurting. Remember to thank your lucky stars that you have a great job and an income. If you are reading this, it is most likely you are not one of the 3.6 million Americans who have become unemployed this year.

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Rosemary Bray is a speaker, trainer, and consultant to the dental and orthodontic professions. She can be reached at