Answering the Dreaded Money Question

Posted on April 2, 2014 by Fred Joyal

More new patients are calling asking about fees than ever before. This is in part because of the recession, and the number of people who have moved down on the socio-economic scale. But it’s also because people can now find the price of almost anything using their cell phone.

The other reason is they don’t know what else to ask when they call a dental practice, so they ask about cost. The average person does not know how to evaluate a dental practice with regard to clinical skills, so they at least want to find out what they’re going to be paying.

So how do you answer? Most consultants will say that you shouldn’t ever quote fees over the phone. Most front desk team members have either never heard this rule or don’t follow it. Some even offer fees without being asked.

I try to discourage receptionists from getting into money over the phone. But it really depends on what type of office you operate. I will break them down into three types:

The high-end, high-tech practice (usually all fee-for-service)
The PPO practice with mid-range fees
The HMO/State aid/credit dentist practice

How to respond when you are a high-end practice:

“We don’t normally quote fees over the phone. Our dentist likes to do an evaluation of the patient and then recommend the best treatment. We don’t accept insurance because we want to offer the highest standard of care possible, and most dental coverage is insufficient for that level of treatment. We do have a wonderful office, and patients love us, and we are happy to do an evaluation at no charge to you, so you can see the dentist and the practice and decide for yourself. And we also have several financing options. Would you like to come in tomorrow?” [Your state may have different rules regarding free evaluations.]

How to respond as a PPO practice:

“Our fees are very reasonable for our area, and we do accept insurance plans and have financing options. But we really think you’d like our office, so we recommend coming in to get a free evaluation. We won’t charge you for anything without your approval, so you’ll always understand the cost ahead of time, because we know that’s important. Can you come in this afternoon?”

If they keep pressing for a dollar amount, saying things like, “I just need to know how much a crown is at your office,” then respond with this:

“It sounds like you might be looking for the least expensive dentist. That isn’t us. But we recommend coming in to see they type of practice we are and the level of care that we offer, so when you do find the lowest cost dentist you have something to compare it to. And of course we won’t charge you for the evaluation.”

If they insist on the actual dollar amount, I would give them a range, explaining that it’s impossible to do an accurate diagnosis over the phone.

How to respond when you are an HMO/State Aid practice:

“Our fees are the lowest in the area, and we accept HMO plans [or state aid], and have excellent financing options for whatever is not covered by this insurance. We don’t offer free dentistry, however, so there has to be some financial arrangement made before treatment begins. Can you come in this afternoon?”

Notice that I addressed the issue of “free dental work” right up front. It’s critical to be clear about that, as very often their expectation is that you are like the emergency room and the county or the state pays for everything. (Last year ER visits for dentistry in the US cost over $1 billion…your tax dollars at work! And it usually costs ten times more at the ER than it would in your office, and seldom is treatment completed.)

I would then tell them the cost of treatment, if they are asking about something specific like an extraction. Your business model is to be the least expensive. They’re price shopping, so if they want to pay even less than you charge, you probably don’t want them as a patient.

THE THINKING BEHIND THIS

The cost of dentistry is definitely a factor for three-quarters of Americans, so don’t be dismissive of this concern. But don’t just throw a number back at them. Very often they are really trying to find out if they will be treated fairly, and don’t know what else to ask. When you say, “our fees are reasonable for the area,” this gives them a frame of reference.

You have two goals in every call:

shift their focus off the cost of an individual procedure
get them in the practice.

(With the low-cost practice, your third goal is to be extremely clear that your treatments are not free.)

This is important to remember: no matter what you do or say, YOU WILL NOT GET EVERYONE IN! But you improve your chances of starting the relationship right by making it about the care you offer, not the price you charge.

Most of this language I’ve learned from the masters of communication, Linda Miles and Bernie Stoltz. But getting good at effective communication is critical to any practice. So get coaching where you need it. It will profoundly effect your results.

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Are You Ready to Cut Your Fees in Half?

Posted on February 18, 2014 by Fred Joyal

Transparency in pricing is a powerful trend affecting most industries today, and I’ve seen indications that it is coming for dentistry. In the car business, for example, you can go to TrueCar and see exactly what the factory invoice on any car is, as well as what the discount range is on virtually every vehicle. Countless travel sites compare hotel room prices or plane flights. And the cheapest price for any appliance can easily be found online.

There are strong forces at work to do the same thing in dentistry. Brighter, for example is a company that has negotiated significantly lower fees with participating dentists, and allows the person searching to compare the costs of procedures by dentist. They’ve raised $28 million in venture capital to launch a business specifically designed to cut your fees in half. That applies to all your fees, not just a new patient offer. This kind of win/lose proposition makes the dental insurance companies seem appealing by comparison.

This is also a problem if you are not a “Brighter dentist”, because consumers will start to believe that you are overcharging. It will also increase the number of calls that you will get asking about the cost of every procedure. In essence, this is the commodification of dentistry, and I can’t see how that’s a good thing.

It’s probably only a matter of time before someone feels the need to create a website that lists every procedure and what it costs all around the country, based on UCRs, or some other source. While we in the industry know that many things control fees, from your location, to the degree of technology in your facility, to the insurance reimbursements, the average consumer thinks you make too much money, and this will only grow as a belief.

So what are you to do in the face of this inevitability? Here’s one thing I’ve learned in many years of business and advertising: value is a perception, not a calculation. Granted, some people are just looking for the cheapest dentistry because they have no, or very limited, money to pay for it. But for people who have anxiety about dentistry, who appreciate genuine compassionate care, who want an expert to work on their body, not the cheapest provider, then cost is a secondary consideration.

Zappos is not the cheapest way to buy shoes. It’s the most convenient way, with the best service. BMWs are not the cheapest cars, but just try to get one of their owners to switch to a Kia. Whole Foods is not the cheapest grocery store (not even close!) But they have built a perception of value that is not based on being the cheapest, and they are all doing tremendous business. So maybe the exact perception you want to build is that you are not the cheapest dentist, nor do you strive to be.

I’ve also observed that many people use higher pricing as an indicator that the service or product is better than average, just as they tend to assume that the absolute cheapest price means the lowest quality. This is what we need to get them to understand about dentistry. People tend to believe that almost all dentistry is the same, and it’s just a matter of finding the cheapest way of getting it. You can only do that with effective, clear communication. It is going to be more and more important to create an overall experience in your practice that communicates higher value. (Did I mention that everything is marketing?)

That communication is often going to begin with the first phone call. Many practices ask me how to address this situation when someone is price shopping. My recommendation is language like this:

“We’re not trying to be the cheapest dentist. Our fees are very reasonable, with many financing options, but what we offer is a practice that offers a very high standard of care in a comfortable environment, and we try to provide that as affordable as possible. And we think if you come in and see for yourself, and we are happy to do an initial exam at no charge just so you can get a sense of the level of care we provide, then at least you’ll have something to compare it to when you visit the cheapest dentist’s office.”

Will this work every time? Of course not. But you don’t need everyone. You will not get some people, those for whom price determines value, and their mouth is just an appliance in need of cheap repair. But many people want a dentist that makes them feel comfortable, that they trust, that cares about them, and gives them good health advice. I’m guessing you want to attract those people. So be that kind of dentist.

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Dental Plans Are Not Health Insurance

Posted on January 22, 2014 by Fred Joyal

Of course, we in dentistry all know this. It’s the consumer that somehow gets confused. Understandably, because it’s presented to them as a form of health insurance. But we’re left explaining to patients why they have to pay for so much of their dentistry even with their dental plan. I’ve made this short video on how to explain the difference between their health insurance and their dental coverage, with an analogy that I think you’ll like and find useful.

You may remember last year, when the CEO of Washington Dental Service explained on the news why they were cutting reimbursements to dentists in an economy where absolutely nothing else is dropping in cost. He flippantly said that “dentists could work more” to make up for the slashing of their profit. Read my blog about it here, if you like.

The premise was that WDS, a division of Delta, needed to offer lower-cost premiums in order to stay competitive–even though they control 80%+ of the state’s dental insurance business. (Can you say monopoly?) What’s fascinating is what they’re actually doing with the money is running television advertising promoting their product. Gotta love that non-profit approach to making a lot of money for the executives. (The CEO makes $1.2 million. Talk about biting the hand that feeds him.)

Anyway, we’re stuck teaching people the differences in their coverage, and putting them in a position where they make bad health decisions because they have this implicit trust of their health care providers. So they say things like, “I only want to do the dentistry that my insurance will pay for,” and, “Do I really need this work done, or do you just want to make more money?”

My advice is to sit every new patient down in the first visit and explain clearly that, unlike health insurance, where the coverage is based on what is actually wrong with them, dental coverage is simply a discount plan on some range of basic services, set by their employer and totally unrelated to the condition of their mouth or their dental care needs. And that you will do your best to treat them in a way that is most affordable, but your professional responsibility as a dentist is to make them aware of their condition and the options for getting themselves back to a healthy smile.

Most of them will understand, and the rest, well, it’s crown-a-year dentistry for them!

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The New York Times Takes Aim at Dental Financing

Posted on October 16, 2013 by Fred Joyal

On October 15th, The New York Times had a front-page article about how many senior citizens are getting roped into paying high interest for medical care financing. Although the article was about medicine in general, the primary example was a case of a woman who financed her dentures, and how the interest had ballooned when she fell behind on payments.

Basically, the article stated that much of medical financing is done by companies that charge higher interest, with severe penalties for late or non-payment. They mention that medical financing was about $45 billion in 2010, and going up. This is primarily for non-insured medical treatment, not dental care. But, strangely they didn’t mention any medical cases. They did quote a chiropractor who had stopped using financing because “One missed payment can really ruin a patient’s life.” (Unlike missing other kinds of payments, like your mortgage or your electric bill, which have no repercussions at all, right?)

They did point out that some of these plans charge no interest for 6-18 months (as if that’s somehow evil inducement, unlike buying a TV that way, or a bed, or anything else.) And then there was my favorite line, “Doctors, dentists and others have a financial incentive to recommend the financing because it encourages people to opt for procedures and products they might otherwise forgo because they are not covered by insurance.” The Times forgot to say “procedures that would be beneficial to these patients.” Because, as we all know, senior citizens are flocking to dentists hoping to get as much unnecessary dentistry as possible, even if it impoverishes them.

Once again journalism takes the easy path, slamming dentists, and making them seem greedy. I could get angry about it, but it’s just one more shot glass in an ocean of negativity. Sadly, the dentist that was mentioned refused to comment. This is only makes us look worse. I would have said, “the truth is, if someone needs dentistry, then there are very few investments they can make that can enhance the quality of their daily life as much as that dentistry will. And unfortunately, dental coverage is minimal for most people, unlike health insurance. So we offer financing because the problem is only going to get worse and more expensive if they don’t take care of it at that time.”

When people don’t have the money for something in this country, and they need it or even just want it, they finance it. And you know who pays higher interest? People with worse credit. And they are financing all sorts of things that don’t add anywhere near as much value to their lives as the care dentists offer.

CareCredit is mentioned in the article, and everyone I’ve known there for 25 years has operated reputably, and helped literally millions of people get the treatment they need that they otherwise could not have afforded. The article also mentioned that the dentist got his money up front. The Times didn’t mention that he took a discount on that payment, because they didn’t know, or they didn’t know if it was non-recourse or full recourse financing. And why bother to find that out?

The Times also forgot to mention that for most people dentistry is unexpected spending, often with an urgent need to get the patient out of pain or save their teeth. But why bring up that trivial detail? And they never asked the woman in the article if she would return her dentures if she could get the money back. I’m guessing she would have said, “Hell no!”

So what can we do in the face of this kind of negative publicity?

Well, I wouldn’t stop offering financing, that’s for sure. Patients need it. As a practice policy, I would make sure that you explain the financing details to your patient, and make sure that they understand them. Of course, many times people don’t listen the first couple of times you tell them something, but don’t just hand them a credit app and breeze through the explanation. It still has to be affordable for them to accept it, and they need to understand that if they don’t pay it’s just like not paying their mortgage or a credit card, there are going to be repercussions.

You might look into some very good self-financing systems, which allow you some flexibility with your patients in terms of interest and late payments, such as Comp rehensive Finance, and it’s always good to have a few sources of financing for patients. By no means should you self-finance without one of these services, or you will find out just how large your uncollected accounts receivable can get. You need to be one step removed from the financing, and these services create that.

And also be vigilant about the finance companies that you do use. Some of them are a little tricky, or bury the risks or the triggers of higher interest in the fine print. These patients are your long-term customers, and you need to protect them.

And in your treatment discussions, it’s essential that you are building value for that treatment in the patient’s mind, otherwise the natural tendency is to focus on the cost, especially as they make the monthly payment.

Lastly, and I say this often when I lecture, that I think there is great nobility in a profession that does so much for people’s well-being and is so under-appreciated for it. Maybe the New York Times will call and interview me, so that I can tell them that people finance all sorts of stupid things that they don’t need and can’t afford, but dentistry isn’t one of them.

To read the full article, click here, although you might not have access to it. Some of the comments below the article give you a flavor for how the public thinks, and there are even health care professionals calling it “predatory” to offer financing. One jerk actually said that he accepts major credit cards, but offering his own financing would be “unethical”. Pardon me for thinking clearly, but it’s the same thing, buddy!

Love the Dentist? Depends Where You Live

Posted on August 14, 2013 by Fred Joyal

We do a lot of consumer research at 1-800-DENTIST, and recently we did a nationwide survey on attitudes towards dentists and dentistry. This wasn’t done just with people who called our service, but was a random sampling across the country. We learned some interesting things.

First, more than 65% of Californians have a regular dentist. This is higher than the national average, and almost the reverse of certain southern states, namely Mississippi and Alabama, where nearly 70% of the population do not have a regular dentist, and only seek one in an emergency situation.

On another note, more than half of dental patients in New York that we surveyed were unhappy with their dentist. Are people just crankier in New York? Because over 65% were happy with their current dentists in California. It’s not like they don’t have a choice to change dentists in New York. They certainly don’t have to go all the way to California to find a dentist they like.

There are wide variations in dental behavior all across the country, and we have learned from answering millions of calls from people looking for a dentist that their expectations are also quite varied. In some parts of the country the majority of people expect someone else to pay for their dental care, and in other cities and neighborhoods the primary concern is the level of care and expertise of the dentist and practice, regardless of cost.

How can there be so much variation around the country? We all watch the same TV shows and movies, with actors with great smiles, why is it so acceptable in so many places to neglect yourself until it’s an emergency, and even then an extraction is the requested treatment?

My only conclusion is that it’s cultural, and that culture can be very localized. And I do see the consciousness shifting in the consumer mindset, but it’s gradual, and was certainly set back in 2008 when many people in the middle and lower classes lost a good portion of their discretionary income, and paying for their dental care became a financial impossibility.

It seems unlikely that the Affordable Care Act, which is already a Frankenstein of various conflicting solutions, as it mutates and is either gutted, revised or replaced, will ever encompass much in terms of dental care. It does currently require that most children be covered by 2018 (after another presidential election).

And therein lies the solution, I believe. It starts with children, as most cultural shifts do. We need as an industry, as a nation, to do our level best to help children to, first, not be afraid of seeing a dentist (that usually means keeping the parent out of the operatory) and to be much more concerned about neglecting and damaging their teeth. We are making valiant stabs at this, by eliminating sugared drinks in schools, and in California, for example, a child cannot begin the first grade without having seen a dentist, but much more needs to be done.

Our goal should be a complete shift within a generation, so that 99% of American children brush, floss and see a dentist regularly, and like the dentist they go to. And that they know what damages their teeth, and what protects them. It’s probably going to be done practice by practice, since I don’t expect there will be a national awareness campaign anytime soon. (Maybe the next First Lady will take it on!)

Our company is going to keep promoting dentistry, and expanding our ad budget, but I think it will take an increased focus by individual practices all across the country to make this tectonic shift occur. I hope you’re with me, and I welcome your thoughts and comments on this.