Duane A. Schmidt, DDS
Once the capacity to verify checks is in place-using the handy VeriFone (see last month`s column)-a dental office is positioned for one more function. To the VeriFone we now add a VeriFone printer, at roughly $250. The same VeriFone that we use to screen patient`s checks works fine to verify credit cards. The tiny, desktop printer frees staff from a hard-copy crisis.
Three key questions must be answered: How does the program work? Why should a dental practice accept credit-card payment? And, should a VeriFone program be used in a solo practice?
First, the how: The receptionist taps in a code which directs the VeriFone to a credit-card data bank, rather than to the financial data base that we access to verify checks. The amount of the transaction is punched in and a response screens on the LED in seconds. Once the card is approved, a receipt prints out for the patient to sign. In 48 hours, the money is wire-transferred into the office checking account. It`s that simple.
There was no dialing wait, no human interface, no receipt to hand-generate, no hard copy to assemble, no postage to pay, no postage delay and no wait for the cash. Are those benefits enough for an office that may accept only a few credit-card payments monthly? Absolutely! At a 10 percent return, $250 will earn only a couple of dollars per month. On the other hand, an investment in a VeriFone printer, even under a least-used scenario, will deliver far greater profit than this.
But, why accept credit cards in the first place? Attorney John McGill, in the Blair/McGill Advisory newsletter, notes that a dollar collected over-the-counter creates a 100 percent collection percentage. He observes that in 30 days, collectibility on that precious dollar reduces to 94 percent, which plummets to 74 percent in 90 days and 58 percent in 180 days.
Blair/McGill conducted a survey of the credit-card policies of 407 dentists. Granted, these dentists were on the cutting edge of management evolution, since they subscribe to his monthly publication; but, the results were telling.
Of the surveyed dentists, 97 percent accepted credit-card payments, yet only 67 percent estimated the patient portion and attempted to collect it at the initial visit. That`s interesting, considering that a computered practice can produce in seconds any of hundreds of varying third-party-payer estimations. Not only is cash flow enhanced, when estimates are presented, but studies show that dentists who inform before they perform have far fewer patient complaints.
In the Blair/McGill survey, 63 percent of the doctors did not track front-desk collections. Only 24 percent set a staff-collections goal and only 27 percent displayed a sign to announce the availability of credit-card-payment options.
In my new book, Schmidt`s Anatomy of a Successful Dental Practice (PennWell Publishing Co., 1996, $44.95), I point out how dentists open their doors to new patient traffic, then raise barriers to keep people out. The barriers may include office hours, fees, parking restrictions, payment terms, location, information about the practice and unavailability of some services.
One more barrier may be the failure to accept credit-card payment. Certainly, in this modern age, those who do not accept credit-card payments should not be unhappy when patients who want to pay with plastic do so . . . in another dental office.
A reasonable expectation of credit-card use may be in the range of 10-20 percent, although all the factors that differentiate our offices and the style of our practices can shred that assumption. Still, for every $100,000 of production generated in a practice, adding another $10,000 in credit-card payments is not money to sneeze at. Processing those payments, on a VeriFone with printer, requires little time and an almost nonexistent investment.
Negotiate a credit-card fee in the 2 percent range with your local bank. However, if the bank will not cooperate in the 2 percent-discount range, inquire about the ADA-sponsored credit card, which is competitively priced.
Adding credit-card-payment capability can be one more technological triumph to add to your happiness, your days and your bank account-all three being nice prospects.
The author practices dentistry in Cedar Rapids, IA, in an electronic dental office. He has written three best-selling, practice-building books. He also lectures frequently on profit-building with dental computers. Address E-mail commentary to [email protected].
