Money Talk

Many orthodontists are re-evaluating their practices’ financial health as a consequence of the weakening economy. For those who have not already done so, the first place to turn is well-published authors such as Roger Levin, DDS; Terry Sellke, DDS, MS; and Paul Zuelke.

Among the ideas presented by these authors are evaluating patient credit risks, scripting fee presentations, offering a menu of options, and systematizing the collection process.

Patients are most comfortable when financial expectations are communicated clearly and then handled in a consistent manner. When patients do not know what is expected of them financially, they will feel insecure and uncomfortable; this tension can then affect the clinical experience. A practice must reinforce the quality of the treatment delivered by having financial systems that create security.

Most practices have a treatment coordinator (TC) and/or a business manager to present treatment options, treatment fees, and payment plans, and then to follow through on execution of the fee contract. This team must be trained consistently to know the office systems. The TC should communicate, and believe in, the value that the practice provides to patients. The business manager should maintain a separation of payment plan from treatment plan and follow through on collections. Continuous training in the practice systems and scripting to address various situations is vital to keeping these positions working effectively.

Scott G. Smoron, DDS, MSD

Stick to the Script

Scripting is necessary if the practice’s mission and policies are to be clearly communicated in a consistent manner. Scripts should frame discussions so as to remove barriers that would prevent patients from initiating their treatment. Communications about fees should reinforce the service the patient can expect from the practice. When done properly, scripting should stimulate discussion with the patient in a positive manner. Scripting can also be used to limit discussion and focus attention on particular issues.

Along with scripting to guide the conversation, it is helpful for patients to have something to look at when discussing treatment fees. Fees should already be written down when presented. In situations where more than one treatment fee is presented, written numbers allow the patient to focus on talking about the treatment options instead of furiously taking notes about the fees.

Once a choice has been made concerning treatment plans and the fee has been clearly presented, the TC can say, “We would love to have ____ as a patient, and we have many ways to make this treatment affordable. First, we do offer a ___% discount for payment in full. However, we pride ourselves on being flexible and making arrangements that make treatment affordable. How do you think you can afford to pay for treatment?” Or, to put it even more simply, “How do you think you can make this work?”

If patients can articulate a payment plan they can afford, they are more likely to follow through on the plan. For patients who do not know where to begin, continued scripting can be valuable. “Many of our patients will make an initial down payment of ___% and spread the remaining payments over the course of treatment. Would this work for you?” Or more simply, “Do you have a amount you could afford to pay monthly toward this treatment?” If the ball does not start rolling then, simply inquire about insurance benefits, flexible spending accounts (FSAs), or medical savings accounts (MSAs) that might help pay for treatment.

A one-size-fits-all approach to payment arrangements usually fits no one well! Offering a discount to patients who pay in full is straightforward, but all other payment plans require a schedule and consequences for not staying on schedule. The protocol for when payment schedules are missed should be articulated to the patient.

Limit Risk

Zuelke’s materials are an excellent resource on credit risk assessment and financial strategies to address risk. Every private practitioner should study his ideas. Online services like OrthoBanc can also quickly provide grades and recommendations about creditworthiness and payment options. In addition, a simple evaluation of the responses to initial phone call questions, such as what general dentist the patient sees, can reveal a credit risk: Patients not attached to a general dentist are typically a higher risk than those new patients coming from the office of a strong referral source.

Another means of managing risk is to require monthly, automatic payments split across multiple credit cards. The assumption is that if the credit card issuers consider the patient a good risk, an orthodontist can too. If payments are spread over 1 year, you may require two credit cards; for each additional year of financing, require another card. If a charge does not go through on a particular card, notify the patient that the remaining fee will be charged to the remaining card(s) unless a new card is supplied. If a patient is choosing to avoid payment of the fee, the inconvenience of having to close multiple credit card accounts becomes a deterrent.

Be Flexible

Flexibility in payment arrangements builds goodwill in the patient relationship. For example, you can allow patients with FSAs or MSAs to have all payments come from these tax-advantaged accounts. Since the tax savings can be more than 30%, use of a FSA/MSA is great for the patient. Some patients will defer treatment, however, if they have not set aside money in their account. You can create goodwill by initiating treatment and deferring payments until the FSA/MSA is funded the following year. This payment deferment increases the financial risk of the patient to the practice and must be compensated for, however. One way that can be done is to spread the treatment fee out as even monthly payments over the length of treatment, but assess 1% interest on balances already due. This interest helps compensate the practice for the risk, provides a motivation to patient to pay, and still maximizes tax-efficiency for the patient.

Some patients will want to spread payments evenly over the course of treatment. This is easy enough. In many practices, these patients may only be seen once every 10 weeks. If that is the case, and the patient normally makes payments when they come for appointments, it would be easy for a balance to become more than 30 days overdue. To create an incentive to remain on schedule, charging 1% monthly interest on balances greater than 60 days overdue may make sense.

Recently, third-party financing operations have made some changes to the options available and the fees associated with them, making them more attractive as ways to manage payment plans. Both Springstone and CitiHealthCard have excellent resources to aid in the scripting of fee presentation and payment options for third-party financing. Reviewing their materials is a good idea even if you do not use their services. Third-party financing can create options for patients that a practice cannot provide internally. “Your treatment fee of $6,000 can be arranged in many ways, such as 60 monthly payments of $128 or 24 monthly payments of $250. Does either of those options sound appealing, or do you have any ideas?” The former involves interest, and the latter is interest-free. However, $128 may be the best fit for a patient’s budget, and providing this expands the ways in which a practice creates value for a patient.

Get Closure

When you are scheduling removal of appliances ahead of schedule, simply asking, “Would you like to pay off the balance on your account?” can be met with great success. Many patients want closure on the process when braces are being removed and merely need to be presented with the idea. Those who do not close out their accounts can continue to pay on schedule. However, this is an excellent time to place the patient on an automated payment plan for their remaining balance. Since visits to the office are less frequent, arranging to have the final payments paid automatically will make sense to most patients. You should let patients who do not opt into an automated payment plan know that late-payment fees will be assessed on a monthly basis once the original payment schedule has been completed.

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For those who opt to spread payments over a period longer than the treatment time, interest on balances greater than 30 days overdue creates more discipline. A modest late-payment fee should also be assessed monthly. In addition, to pre-empt late-payment issues, these accounts are best managed with automated payments instead of billing. If the automated payment does not go through, the patient is notified immediately and reminded of interest charges and late-payment fees.

It is always possible to forgive interest charges and late-payment fees once an account has been brought current. Many patients who are nonresponsive to a typical “Your account is behind” letter will respond when additional charges begin to accrue. They will also ask to have these charges forgiven. For those with a good track record, the charges can be forgiven. For those who have demonstrated an inability to remain current on their account, either the interest charges or late-payment fees can be forgiven at the completion of the payment schedule if the account is brought current.

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Scott G. Smoron, DDS, MSD, is in private practice in Mount Prospect, Ill. He can be reached at