Adopt a STRICT payment policy without losing patients

Traditionally, dentists have been especially sensitive to the financial needs of their patients, often allowing long delays in payment, rather than insisting on prompt settlement.

by Elizabeth Langwith

Traditionally, dentists have been especially sensitive to the financial needs of their patients, often allowing long delays in payment, rather than insisting on prompt settlement. Placing financial needs of patients first has led many dental practices to fiscal trouble. Too often, dental patients don’t treat outstanding bills for dental care as a high priority. While consumers will settle promptly with dog groomers, auto mechanics, and dry cleaners, dental bills frequently get shuffled to the bottom of the pile.

Dr. Bruce Dinner, an orthodontist who recently retired after 30 years, shares his ideas on the subject.

“A few patients will justify their non-payment or delayed payment with the excuse that dentists are overpaid for the services they provide,” he says. “Also, many consumers know that dental practices tend not to be too aggressive when collecting because of concerns about the practice’s reputation.”

Cash flow counts

Telling dentists that cash flow is “important” is an understatement. According to a recent American Express survey of health care professionals, when asked what the most important management priorities for the next six months were, 32 percent of dentists surveyed put managing cash flow on the top of the priority list. In a dental practice, as in any business, cash flow is the lifeblood of the organization. Dentists sometimes lament that they have become professional bill collectors first, and dentists second. One remedy for cash flow issues is to develop and implement strict policies that require patients to pay in full at the time of treatment.

Encourage payments via credit card

There is one way to maintain a strict payment policy and simultaneously keep the widest range of patients - offer patients the ability to pay with credit cards. Recent estimates show that 144 million Americans carry at least one general-purpose credit card.

Some readers may be surprised to learn that there are dental practices that don’t accept credit cards. With the proliferation of cards, it hardly seems possible that a modern dental practice could exist without accepting credit cards. Yet it’s true. One objection we often hear is that the costs associated with establishing and maintaining a credit card merchant account outweigh any benefit.

Accepting plastic for payment makes sense for many reasons. Credit cards can be leveraged by practitioners to implement and enforce payment policies. Card companies will provide pre-authorization forms that can be incorporated into payment policies requiring patients to provide credit card information to guarantee payment at the time of service. Some card companies even incorporate the message, “Payment is requested at the time of service,” on signage that can be displayed in the office to reinforce the message.

Credit cards also can be used to assist staff. For the same reasons that dentists are often not aggressive in their collection efforts, practitioners and their staff can be reluctant to clearly and openly explain payment options to patients. To help address that problem, credit card companies will provide signage informing patients of possible payment options. The information on display also makes it easier for office staff to inform patients of their payment options.

This benefits patients, too. Just being able to read the information on display can ease any financial anxiety patients might feel so they can understand treatment.

Knowing credit cards are welcome, patients might consider other dental services such as teeth whitening.

Other payment options

Some practices try to motivate patients by offering a full-pay cash discount - typically a 5 percent discount if paid in full prior to treatment. Another option for practitioners is to work with outside lenders to provide patients with special term loans called treatment-financing plans.

Each alternative has advantages and disadvantages. While the cash discount has been useful in many orthodontic practices, to take full advantage of it patients need to have cash on hand, and relatively few choose this option.

When it comes to treatment-financing plans, remember that all are more expensive for dentists than credit card fees. Nevertheless, they can be useful options for some patients - the financially savvy patients who want to keep medical expenses separate from other costs and patients who don’t qualify for credit cards.

While financially savvy patients might ask for this option because likely they can qualify for no-interest plans, dentists need to realize that costs to practices are high.

Patients who want to keep their medical expenses separate from other expenses have more options. These patients either can use a separate credit card for medical expenses or choose a card that categorizes spending in a year-end summary of charges. Patients who don’t qualify for credit cards benefit most from these types of financing plans because otherwise, they might not be able to pay or be treated. While costs to dentists are high, the alternative for treating these patients might be no payment at all.

Understanding all payment options is necessary to manage a successful practice. By fully leveraging what credit card companies provide and selectively offering other payment options that make sense for their practices and patients, dentists can devote more time to patients and get a better handle on a key management priority.


Elizabeth Langwith is vice president of the Healthcare Group within American Express Establishment Services. American Express works with doctors to be their best business partner, allowing them to more seamlessly manage their practices, navigate payment processes, and market their services.

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