Effective Financial Communication

Sept. 1, 2004
Ditch the detective work — Patients won't disappear before paying when you communicate financial expectations

By Jennifer de St. Georges

Communicating financial arrangements with patients is one of the most difficult aspects of practice operations. But with the right tools and the right attitude, collecting money from your patients can be rewarding and fun. Three principles will help your practice communicate more proactively with patients about finances.

Before I share them, I'll tell you about the day I learned the secret to asking patients for money and making collecting fun. Many years ago I had a patient named Sally Tatum. Sally stood about 4-foot-2-inches tall, and she could literally walk past the front desk (I couldn't see her because the counter was so tall), leave the building, get in her car, get on the freeway, and be gone before I realized she had left the clinical area. That meant Sally never paid for her dentistry. Once we realized Sally had disappeared, I would call and inform her the next time she came in she would need to bring me a check. She would agree, and then somehow manage to come in, see the dentist, finish her appointment, and once again bypass the front desk — without paying.

One day I thought of a plan. We decided to put a lock on the inside door that had allowed patient access from the business area back into the reception room. The next time Sally Tatum came in, she completed her dental visit and headed for the door, but this time it didn't open because I controlled the release under the counter.

"Mrs. Sally Tatum, how nice of you to stop," I said. "I believe we had an agreement that you would bring in a check today."

She smiled sheepishly, put her bag on the counter, opened her wallet, and handed me a beautifully creased, perfectly folded check for the $400 upon which we had agreed. When I looked at the date, it had been made out three weeks prior to our conversation. Then it hit me. This was a game. Her goal was, and always had been, to get to the freeway as often as she could without giving up the money. My goal was to effectively communicate and enforce the financial policies and procedures of the practice. Collecting became fun the day I realized this game can be defined by three principles. They are:

1) Inform before you perform

The first principle of effective financial communication is inform before you perform. This principle relates clinically (known as informed consent) and to your practice's financial policy, or how you handle money issues.

Patients should never have to ask anyone in the dental office, whether it's you, an assistant, a hygienist, or a member of the administrative staff, "How much is this going to cost?" If patients have to ask, your practice is not communicating its financial criteria in a proactive manner. Before you can communicate your financial criteria, you have to create them, and unfortunately, too many practices don't clarify patient-finance policies.

To create an internal financial guideline, list every situation dealing with patients that have possible financial components, then list your practice's procedure for handling it. For example, when a patient misses an appointment, do you charge for the no-show? If so, what is the fee? Do you charge for bounced checks, and how much? Once completed, your internal financial policy should be posted in a private area of the office and made readily available so any staff member may access it and follow proper procedures.

Using written financial agreements is another way to ensure effective financial communication with patients. Financial forms should cover treatment, fees, and guidelines. Once you agree on treatment and the method of payment, keep the information easily accessible in patient records and on the computer.

Should doctors discuss money?

Practices are often unsure of the role dentists should play in communicating finances to patients. Frustrations often arise when administrative staffs aren't given proper direction and authority to handle financial issues. Set proper standards in financial communication and empower your administrative staffs to enforce financial policies. Dentists should not discuss money with patients. Nevertheless, there are three exceptions:

• During an emergency situation when the patient is in the chair, X-rays have been taken, and the diagnosis has been made, don't expect an administrative staff member to walk into the clinical area to tell the patient how much treatment is going to cost. Be prepared to discuss your recommendations and the fees attached to each.

• The second instance is when there is a change in treatment. When the buccal pit becomes a four-rooted endo and a crown, stop and inform the patient so there are no surprises.

• The final instance is during the consultation. Talk only about the cost of treatment — not how the fee is going to be paid. That discussion should be left to administrative staff in most cases.

2) If you don't ask, the answer will be "No"

The second principle of effective financial communication is if you don't ask, the answer will always be "No."

A dental collection agency told me once that 85 percent of debts could be collected at the front desk if somebody would ask. Setting proper expectations and communicating financially with patients should start before treatment. Accounts receivable becomes an issue if you haven't effectively communicated and secured "emotional buy-ins" from patients in regard to financial agreements. Occasionally people come up to me during my seminars and ask why I stress communicating with patients prior to treatment. They say it's just as important to talk about small claims filing and collection calls. Then they go on to share their successes in going to court on behalf of the doctor and the knowledge they've acquired about small claims. I listen intently and then respond with two comments:

• "You've gone to court and won the judgment, but you still haven't got the money."
• "If you put that same energy into communicating with your patients prior to treatment, you probably wouldn't have an accounts receivable problem in the first place. A better use of time and energy is proactive communication."

3) Make statements and avoid questions

Most dentists, hygienists, and other clinical staff have been trained to ask patients open-ended questions. "How does your tooth feel?" "What are your expectations?" "What are your concerns?" When dealing with patients clinically, asking open-ended questions is appropriate and encouraged. But administratively, the worst thing you can do is ask a patient a question in an environment in which you can't control the response.

For example, if you ask, "Would you like to pay, Mrs. Smith?" and Mrs. Smith says, "No," you can't blame Mrs. Smith for the answer. You gave her permission to answer in the way she felt most comfortable. A better choice is to make statements: "Mrs. Smith, the charges today areU," and then go through the different ways she can pay.

The final and often overlooked piece in effective financing is ensuring your patients have flexible payment options that do not harm your practice's productivity and bottom line. There are three financial options: prepay, retail credit cards, and patient financing.

With prepay, the money is in your bank account prior to treatment. It virtually eliminates short-notice cancellations and no-shows. If you offer patients a prepayment courtesy, inform insurance companies of the discounted rates.

The second option is a retail credit card such as MasterCard or VISA, because the practice is paid within 24 hours.

The third option is a patient-financing program. This option pays you within two days of treatment and allows patients to make small monthly payments that fit into their budgets.

Discontinue non-productive financial options such as pay-as-you-go, half-down and half on the second appointment (both encourage short notice cancellations, no-shows, and piecemeal dentistry), and carrying accounts in-house (A/R and collection expenses).

Following these principles and making a commitment to be proactive with your patients will improve your financial communication. You'll make the game of collecting money more rewarding and fun.

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