Peter Marana, DDS
I am a dentist in the Upper Peninsula of Michigan with two small practices in nearby towns. I would like to share my story of how my wife and I successfully converted two poorly managed, moderately successful practices into two very well-managed, high-producing practices.
About three years ago, my wife, Kathy, started helping me in my office. She had lost her job as a pharmaceutical rep due to downsizing in the early `90s. Kathy first began by taking over the unpopular job of collections manager for both of my practices. She was very successful at collections and, through a great deal of perseverance, managed to get my collections under control.
When Kathy started working collections, the majority of my accounts receivables were over 90 days old. In six months, all of these 90-day-old accounts were either collected or placed on a firm financial agreement in a monthly payment plan.
At this point, I made a very costly mistake. I let my wife take a sales rep job with a different company and turned the collections effort over to my regular staff. As it turned out, one of the biggest problems that I had, but did not recognize at the time, was that I had the wrong personality in the front office. It takes a friendly, but assertive , person to enforce payment policies. Because of my staff members` close personal ties to the communities, they definitely were not comfortable enforcing strict financial arrangements and making collections calls to many of the local people.
When two of my assistants went on maternity leave at the same time, I again needed my wife`s help in my practices. It was then that I found out the accounts receivables had returned to their previous delinquent state. As I struggled to improve the collections in both offices and implemented stricter office policies, I went through a complete staff turnover in both offices. Some left by their own choice; some left by my choice.
To keep my offices running, I had my wife take over as office manager for both of my practices. I then quickly hired new chairside assistants and hygienists. After about five months, it became apparent to my wife that, even with very firm, signed financial arrangements, the majority of patients were not honoring their payment promises. We also realized that I actually was harming my practice and creating ill will by hounding patients for monthly payments or filing charges for lack of payment in small-claims court.
In addition to my collection problems, I was trying to get my patients to realize that dental-insurance companies are in business to make money, not improve their (the patient`s) dental health. I did thoroughnew-patient exams with all of my new patients and presented comprehensive treatment plans. It always was a struggle to get patients to look beyond their very limited $1,000/year dental benefits and to accept optimal care for their best long-term dental health.
I saw the link between insurance reimbursement, collection problems, and poor case acceptance. I needed to get patients to accept their dental conditions and plan for their long-term health, independent of what their dental insurance would do. I saw that by filing patients` insurance and accepting third-party payment (which usually took up to three months to pay claims), I was putting myself in the collections business to collect insurance co-pays. I realized the solution to all of these problems was to make my practice exclusively fee-for-service and have the patient pay me and then get their reimbursement directly from the insurance company.
I now offer very flexible payment options to my patients through an outside financing company. I file all insurance claims for my patients electronically and have the insurance check go directly to them. My patients can pay the entire amount owed at the time of service by personal check (with a five-percent discount), credit card, or dental charge card. If a patient or a patient`s family has a series of appointments within a 30-day period, I wait until the last appointment to bill the dental credit card and offer the longest interest-free plan that the company allows for the dollar amount charged. I never count the dollars that I spend to offer outside dental-financing services. This process has saved me from becoming a collection agency and allows me to offer an interest-free payment plan to my patients.
Converting your practice to fee-for-service only takes guts! I lost about 20 percent of my patients when I switched over, and we had open confrontations with patients for about seven months. Part of this was caused by the ill will my former staff members had created in these small towns, as well as the fact that I went from a very lax office policy to a well-defined, strict policy.
I had to confront many of my assertive/abusive patients myself, because they tried to "walk over" my wife. I also had to explain my practice changes to several local dentists and specialists. They heard the complaints from many of my disgruntled patients and worried that I was ruining my practices, affecting the referrals I made to them. If you are going to change your collections procedures, be willing to take the heat and have an office manager who is 110 percent behind you. The stress associated with such a major change is enormous, but so is the potential for long-term rewards.
After converting my practice, I found that the patients I really lost were the losers. I lost the patients who did not keep their appointments and who had no intention of paying for them. Now that I have used outside financing for a year, I honestly can say that I would never turn back. Many of the patients who gave me a hard time initially have stayed in my practice because they realized they were receiving the best in care. Some also tried dental credit cards for the first time and liked them! My wife has pointed out that by switching to a fee-for-service practice, her rapport with patients actually has improved because we are no longer in the collections business.
Another benefit we`ve immediately realized is the drastic reduction in overhead from not sending statements or chasing insurance payments. At our peak, we were sending 400 statements per month and calling patients every day for their monthly payments. The savings in postage, office supplies, and labor is incredible. The time we saved in billing also has freed Kathy to do practice-building activities such as follow-up letters and phone calls.
To complement our payment options, I now present comprehensive care to my patients by first asking them to consider what is an appropriate expenditure for their monthly budget. Their budget - not the insurer`s - will set the pace at which we complete treatment. I tell my patients to view quality care as an investment.
Patients and their dentists need to look beyond quick fixes when considering dental-treatment options. This can be done only if we separate ourselves from the banking and insurance business.
Peter Marana, DDS, graduated from the University of Detroit Dental School in 1986. He started practice in Norway, Mich., in 1986, and a second practice in Stambaugh, Mich., in 1988. His wife, Kathy, works with him in both practices. Dr. Marana can be reached at (906) 563-5512 or (906) 265-5186.
