Why Dentists Shouldn’t Be Bankers
How much are you paying your patients for the privilege of performing their dentistry? Make no mistake, as long as you’re carrying outstanding accounts this is exactly what you’re doing. Even if you have a profitable, thriving practice with a great collection rate, you’re also paying out; it’s just a matter of how much.
You’re probably paying more than you think when you factor in the cost of time to chase down payments, the cost of bad debts you’ll never recover and most importantly, the cost of lost relationships that inevitably occur when money issues go sour.
Ironically, if you’re like most dentists who carry AR, you do it because you don’t want money to become an issue and affect the relationship. You want to be accommodating. It’s precisely because of the potential money has to be a relationship-buster (ask any marriage counsellor) that you need to be clear about it up front.
Does this mean you should never let a patient out the door without complete payment on the spot? No. It does mean, however, that your patients come into your practice understanding that they are fully responsible for payment. It means that they are made fully aware of the value of what you do, and of the number of financing options available to them through outside lenders. Most of all, it means that what you do collect, you do so at the time of service or through controlled accounts receivable, meaning there are firm automatic financial arrangements in place.
And don’t forget the psychological reason for having patients pay at the time of service. People don’t mind paying for something while they’re still in the glow of having just received the value. There is that “it’s expensive but worth it” feeling. But getting a bill weeks or months later, when you’re no longer in that energy field, doesn’t feel as good and that’s when “buyer’s remorse” can kick in.
In any case, no matter what systems you implement, you should follow one basic premise: What you deliver, you should collect. I know there will always be some patients who don’t pay, and many practices are quite happy when they achieve a collection rate of 98 percent of their charges. But your expectation should always be that 100 percent of your patients pay or make firm arrangements at the time of service. If you think that’s unreasonable, then tell me which two percent of your dentistry is not worth charging for.