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 Comprehensive 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!
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