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Unpaid bills can be the bane of a dental practice’s cashflow. Setting clear expectations around treatment costs and offering payment plans protects both revenue and client relationships. By Angela Tufvesson
A patient who can’t or won’t pay their bill after their dental service has been provided is a headache when you’re running a dental practice—and it’s a more common problem than many realise or are willing to admit.
One veteran dental industry consultant revealed to Bite that some of his dental clients had outstanding invoices for services rendered worth hundreds of thousands of dollars. And it seems those are not isolated cases.
For ‘Anna’ (not her real name), who owns a dental practice in WA, chasing up outstanding accounts for treatment done under general anaesthetic became a huge drain on the business.
“Patients would have to pay a 60 per cent deposit for treatment ranging from around $1500 to $5000, but getting the remaining 40 per cent could often be problematic. Invariably, a lot of these went to debt collection or were written off,” she says.
“The practice manager and the other girls would spend a lot of time chasing people up for the final payment. The time wastage was a huge thing, more so than the money lost.”
There are many reasons why bills aren’t paid, explains Louise Howlett, Prime Practice coach and trainer. It can be a parent sending a child in for an appointment without the means to pay, a forgotten credit card, someone receiving emergency dental care who isn’t anticipating the expense, or patients who change their mind part way through treatment.
“Then the patient often become a bit elusive, and you start having to chase them for money,” she says.
Michelle Pritchard, founder of Aligned Business Consulting, says forgetting a health insurance card can lead to reluctance to pay in full as patients may worry about then having to claim back the amount from their insurer.
New patients with whom the practice hasn’t yet established a relationship tend to be more likely to leave without paying, Pritchard adds. “Generally, it’s those first patient appointments where it can happen before you’ve built up that trust.”
In these situations, “a good amount gets written off”, explains Howlett, putting practices significantly out of pocket. “When you look at cost versus benefit of chasing it up, the time spent chasing it up means it’s often not worth it,” she adds.
Planning payments
Anna says her practice has recently introduced a policy requiring the full amount to be paid upfront. If a patient is unable to pay, they are offered a payment plan through an external provider. It’s an approach that aims to both improve cashflow in the practice and protect client relationships.
Patients would have to pay a 60 per cent deposit for treatment ranging from around $1500 to $5000, but getting the remaining 40 per cent could often be problematic. Invariably, a lot of these went to debt collection or were written off.
Anonymous practice owner
“Dental care can be overwhelming for patients, and the cost is often a lot for them to deal with. It’s about understanding the economic state that people may be in,” she says.
Pritchard agrees that offering patients payment plans operated by external providers is an effective strategy that locks in payment upfront and prevents a long list of debtors from accruing.
“Enabling a patient to be able to afford to have treatment is a really big thing, and that’s why I encourage accessible options like payment plans,” she says. “Some practices do in-house payment plans, but I feel that practices should stick with their core business, which is practise in dentistry, and outsource payment plans.”
Howlett says using external providers reduces the admin load for practices “because the patient tends to manage a lot of that on their own. If you are doing internal payment plans, be incredibly selective about who you offer them to, but where possible, minimise the risk and take up agreements with external payment companies,” she advises.
Several payment plan providers offer services specifically to the dental industry, including DentiCare, Fund My Dental and National Dental Plan, which is supported by humm. National Dental Plan allows patients to borrow up to $20,000 interest-free for dental treatment. Importantly, says Kevin Joseph, head of organisational development and growth, “we facilitate immediate positive cashflow for practices as they are paid in full up-front”.
Clear communication
There’s more to managing payments than outsourcing to an external provider. Howlett and Pritchard both agree that establishing a framework that promotes clear communication reduces debtors, aids cashflow and preserves client relationships.
Set clear expectations about how the practice manages payments, Howlett suggests. “Put it on your website that patients should expect to pay when they come in. Communicate your payment options—all major credit cards, or whatever it is. Explain about claiming on health insurance, and that you don’t run accounts.”
When a patient calls the practice to schedule an appointment, relay the same messages. Practice staff should provide an overview of your fees and explain that the dentist will go over specific costs during the appointment.
It’s crucial that the information that’s been given to the patient about payment is then transferred to the dentist so they’re able to meet the expectation set by the front-desk team.
“During the appointment, the clinician needs to say, ‘We’ve found this problem and if we do this treatment, there is an additional cost today’,” Pritchard says. “If this isn’t verbalised during the appointment, they can get price shock at reception when they go to pay, and that’s when you have issues.”
Howlett says having the patient agree to treatment beforehand means the front office coordinator “doesn’t have to have an awkward conversation about payment and then chase people up.
“Prevention is better than cure,” she adds. “It all comes back to setting expectations and then holding patients accountable.”
