When It Comes to Self-Financing Dentistry, Shakespeare Was Right!

When the economy shifted a few years ago, many dentists I know starting giving their patients a break and accepting terms, financing treatments themselves on patients who had lost their job or their homes, or who were just tight on money.  And I applaud their generosity.  But the most common experience was they ended up losing both the patient and the money.  Many of these people couldn’t make the payments, so rather than come back they went to another dentist, and often times paid the second dentist to finish the work the first dentist started essentially for free.

Accounts receivable is bad business, to be sure. But self-financing is also bad marketing. Statistically, if you have payments more than 90 days overdue, you can be 90% sure you will never see the money.  So why do dentists do it?  To be a nice person?  Because the patient had been a good patient for a long time?  Because the need of the patient was so extreme they didn’t feel they could ignore it?  All good reasons, but the unintended consequences are most often negative.  As Shakespeare said, “A loan oft loses both itself and friend.”

Sometimes there’s a deeper reason, that dentists are so overwhelmed by the constant whining about the cost of dentistry that they devalue it in their own minds.  And that’s where the unconscious marketing message comes in: when you agree to self-finance, you’re telling the patient that even you don’t believe you deserve the money, that you’re too expensive.  That’s why they’re so comfortable not paying you.  You think you’re building loyalty, but instead you’re compromising on your value position.

I’m going to make an absolute statement. There should be no accounts receivable in your practice.  No more than there are with your  dry cleaners, or any restaurant in town, or your supermarket.  If you are not paid at the time of service, you guarantee a percentage will be written off.   Because when it comes to bills that patients feel required to pay, you don’t make the list.  They pay their rent/mortgage, their car lease, their grocery bill, and their credit cards.  I could add ten more items to the list and you still wouldn’t be on it.

So why not only work on patients who will pay you?  That shouldn’t be a radical concept.  What you offer is valuable, worth every penny, and a better long term investment than almost anything else your patient is spending money on except food for their children.  And that’s the marketing message you want to communicate.  You communicate that very effectively when you insist on full payment for your work at the time of service.

So what should you do when you have a good, long term patient, someone who has been with you for years, and he lost his job?  He comes to you with a broken crown or a cracked molar and simply has no money to fix it.  Instead of financing him yourself, just do the work for free.  Say to him, “Look, you’ve been a good patient for years. This would cost $1000 to do this, and I know you don’t have it.  So I’m going to fix it at no charge.  But there are two conditions: first, you don’t tell anyone that I did this.  And second, the next time you need work done, you’re going to have to pay.  This is a one-time thing.”

You’ve made it clear what you’re willing to do, why you’re willing to do it, but it’s not the way you’re going to continue doing business with this person.  They will appreciate it, and instead of them owing you money and not being able to pay you, you’ve added one more experience that makes this person a loyal patient, and most likely they will soon get a job and continue as a paying patient.  Not all the time, of course.  Nothing works 100% of the time.  But the odds are a whole lot better than when you self-finance and hope to get paid.  Best of all, you’re not devaluing your dentistry.  You’re choosing to be generous with something extremely valuable.  Whole different message.

The rest of the time, I say get the money chairside.  This isn’t a fantasy.  I can tell you a hundred practices that do it with every procedure, every case.  They simply say, “This is what the treatment will cost, and this is what your insurance covers. How would you like to handle the rest?”  Don’t save it for last, when they’re leaving the office.  I’ll discuss this concept in more detail in my next blog, so stay tuned!

I welcome your comments--don't pull any punches!