A recommendation being made by at least two consultants today is that delinquent patients be asked for their payment when they come in for an appointment, something we have taught our clients that they must never do! Consider this story I heard a few days ago from a fairly new client. It seems that her rate of failed and rescheduled appointments has been steadily increasing. The issue came to a head the morning this doctor called me when a mom whose son was scheduled to start that day called to cancel the start appointment. This mom had been to the office a week earlier for an appointment on another of her children who was in Phase I treatment. She was three days past due for her payment at the time and a front desk person had been instructed by their Financial Coordinator to ask all patients for a payment if they were past due. So she did so! Here was the conversation as it was relayed to me:
“Last week when I was in for my daughter’s appointment, one of your staff asked me to make a payment. My payment was a few days late at the time and I had planned on making the payment the following week when my husband got paid. I was so uncomfortable and embarrassed at being told in front of everybody that I was past due that I gave her a credit card to make the payment even though my husband and I have an agreement never to use our credit card for such transactions. I was embarrassed at the time but now I am upset at having been treated in such a manner. I no longer want my son to be treated here and when my daughter is finished with her current treatment, she will not get her braces here!”
Was trying to collect a lousy $200 payment that was three days past due worth the result? This was an “A” patient! However, even if this mom was an identified risky patient, a “B” or “C” perhaps, and even if she were 60 or 90 days past due, she still should never have been asked for money when in for a regular clinical appointment.
This is a simple issue! The problem with delinquency has nothing to do with lost revenue. The problem with delinquency is lost relationship. Patients out of relationship with the practice miss appointments. They do not bring other family members into the practice for treatment. They do not refer friends into the practice for treatment. Case acceptance sucks in orthodontic offices with high delinquency – always!
Yes, we have to fix delinquency, but asking for money from patients when they are in for clinical appointments will never work. Yes it may collect a payment, but all that is really accomplished is the patient/parent is taught never to keep an appointment if they are past due. Then we see more emergencies, more instances of poor clinical cooperation, and more patients in treatment past the diagnosed treatment time.
This is why having a doctor look at the percentage of his receivables that are past due is a gigantic waste of the doctor’s time. What is the significance of knowing that 3% of your accounts receivable are past due? There is none!! For instance, our average single doctor practice produces $161,000 per month and he/she has accounts receivable that total an average of $830,000. Let’s say he/she has 2% of those receivables past due 30+ days. That’s $16,600 in delinquency. How is that number useful? It is only useful if you believe that the dollars you should have been paid, but have not, are important. Think about that $16,600. Would you rather have 83 patients past due $200, which totals that $16,600, or would you rather have 40 patients past due $415 each (still $16,600), or 20 patients past due $830 each? Dollars don’t no-show. People no-show! And patients who are delinquent have always caused the lion’s share of all patient related clinical and administrative problems since the dental profession began.
So again, delinquency must be kept to a minimum. Our clients are expected to keep their 30 day (or more) patient delinquency at 3% of the total number of open accounts, but that is only accomplished by a proper balance between telephone and letter collection activity and will never be accomplished by tying payments to patient visits. Leave your patients alone when they are in for clinical visits. Do timely and appropriate collection activity by phone and by letter, and be willing, in cases of serious delinquency to dismiss a patient or to finish a patient at no charge, but do not have a delinquency control system which trains patients that they are expected to pay when they come in for an appointment.
Two-Fer (2nd subject in one article)
A client called me a short time ago and asked if I knew what ZACC was and should he use it. After I picked myself up off the floor I explained ZACC to him but after hanging up I realized what a terrible job I have done in marketing what is really a very useful and accurate tool to use if doctors are interested in knowing the financial risk of each of the patients coming to the practice. ZACC is the Zuelke Automated Credit Coach. It can be found at www.getzacc.com.
Over a ten+ year period I designed, with significant help from my team, a computer algorithm that has trained a computer to make 100% accurate credit grades. The system has been extensively tested, with many thousands of real world, real people statistics, and is, truly, 100% accurate at forecasting the risk of any individual patient. The ZACC tool evaluates not just every line and column on a credit report but also evaluates the maturity and the stability of responsible parties. It knows the difference between a negative item on a credit report that should be ignored and a negative item that must be considered. It knows the difference between a stable person of low income but high bill paying capability and a person of high income but low bill paying capability. Simply put, ZACC works! It can be used, by any staff member, to obtain perfectly accurate credit grades (not point scores) and specific recommendations for minimum down payment and maximum payment plan length and it takes less than 60 seconds of staff time to utilize. Most reading this already know of ZACC, but for those who do not, take a look at www.getzacc.com.
