Doctor’s rank 36 out of 40 on patient’s priority list to get paid.
Studies show costs associated with accounts receivable average 17% of a practice’s outstanding balances. Many chiropractors are discovering that a dedicated health care credit card is an excellent patient financing tool for wellness plans.
The term, “”value of the dollar”” is typically used when referring to the world currency market. Your practice may not be on such a grand scale, but it would benefit significantly if you carefully monitor the value of your dollars when collecting treatment fees. The value of the dollar diminishes progressively with aging accounts receivables. The longer a patient takes to pay your fees, the less valuable that money is when you finally receive it. If all fees were collected immediately, more capital could be invested smartly, which could, in turn, earn more money for the practice. In addition, statistics show that the longer a patient delays payment, the less likely the practice will ever receive compensation from that patient.
Cash flow is the key to any successful practice. Allowing patients to pay at their leisure severely hampers cash flow. Most management consultants recommend that practices not extend financing to patients at all. Most say that patients should pay with cash, check or credit card. This policy should be written and communicated effectively to your patients. An increasing number of chiropractors are joining other health care professionals in accepting credit cards for patient payments. Experts in the practice management are advising chiropractors to accept credit cards. Their use as a payment option helps practices meet their objective of consistently collecting treatment fees at the time of service, thereby reducing–or eliminating–accounts receivables.
Eliminating patient financing maximizes the return to the practice and the value of the practice’s dollar. There are times, however, when patients are unable to pay with cash, check, or a major credit card. For these instances, dedicated health care credit cards provide both practice and patient with an additional payment option. With dedicated health care credit card usage, treatment fees are deposited into the doctor’s account within several business days. Payment is guaranteed as treatment is provided. Most dedicated health care cards are non-recourse, which means the chiropractor is not responsible should the patient delay or default on payment. Practices are not banks and should not behave as lending institutions, especially since they rarely charge or collect interest. By extending payment plans, the practice develops a poor cash flow condition when patients delay payment. It is interesting to note that doctors rank 36th out of 40 on a patient’s priority list of patients’ creditors to get paid. The patient will pay their mortgages or rent, car payments, credit cards, electric, gas and phone bills long before they pay the doctor.
An additional benefit to practices that accept dedicated health care credit cards is that patients are encouraged to accept and start treatment. Approximately 90% of the U.S. population does not receive chiropractic care. Why not? Do they believe in the benefits of chiropractic? Do they not know if chiropractic can help their particular ailment? Perhaps they don’t see the value versus cost. The answer is actually fairly simple. The potential patient hears through education programs conducted by the practice how chiropractic will help them and what the total initial cost is. So now the potential patient knows the cost but the value is still in question because they still have not experienced the relief/benefit of chiropractic care. We can’t afford to treat them and merely hope they will experience the value. So what’s the answer? Perhaps the best alternative is to lower the patient’s initial out-of-pocket cost without lowering the dollars coming to the practice. The most effective way to lower out-of-pocket cost is a patient payment plan that pays the doctor in full, but allows patients to pay small amounts at first and larger amounts as the treatment progresses. This way, the initial large expense patients incur is deferred to a time when their benefits/value is more obvious to the patient. In other words, the larger payments will come when their benefits/value is more obvious to the patient. With dedicated health care credit card acceptance, there is no initial payment needed and the entire treatment fee is collected at the start of the treatment plan. Acceptance of major credit cards and a dedicated health care card will earn a practice tens of thousands of dollars annually in increased and accepted treatment plans.
Credit card acceptance will also lower a practice’s overhead. The costs of billing and collection is eliminated, along with the time and stress of telephone collection calls. Independent studies show the costs associated with accounts receivable average 17% of the outstanding balances. Contributing to this figure is the expense of sending statements, labor, phones, and computers, etc. The 17% that patient billing chisels away a large portion from the practice’s profitability. In addition, the value of the dollar is continuing to decline with every day that account remains on the books. Credit cards eliminate these expenses. Unfortunately, the average American keeps their bank card balances within $300 to $400 of their limit, leaving very little for their health care needs. These credit cards, it must be remembered, are designed for “”consumer”” purchases. Many chiropractors are discovering that a dedicated health care credit card is an excellent patient financing tool for wellness plans, which typically are not covered by insurance. A patient’s monthly payment can be as little as 3% of the balance. Patient acceptance of the wellness plan phase is increased dramatically with this additional patient payment option.
The best way to help your patients afford their needed treatment is to incorporate a dedicated health care card into your office’s financial policy. This provides your patients with an additional payment option that benefits them with a low, affordable monthly payment plan for their treatment while ensuring the office gets paid in full, up front. Today, credit cards are not only acceptable, they are essential. Every practice should offer several patient payment plan options, but exclude in-office patient financing. Both patient and practice objectives are accomplished with the use of major credit cards and a dedicated health care credit card. The value of your dollar could depend on it.s” “Rob Morris is Vice President Marketing for CareCredit, Anaheim, California. CareCredit markets a dedicated health care credit card and other financial products and services to chiropractors. For more information on the CareCredit program, please contact Dencharge at 1-800-300-3046.”