The payment slip

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Payment plans benefit both the practice and patients.
Payment plans benefit both the practice and patients.

An increasing number of dental practices are offering payment plans to ease their patients’ financial pain and ensure a reliable income stream. Charmaine Teoh looks at the pros and cons of some common payment options

If you’ve ever had a patient turn down or postpone treatment, it may be time to consider offering payment plans. In addition to helping patients maintain their oral health, payment plans can bring in a stable flow of revenue and encourage more return visits.

“We found patients were putting off dental treatments due to the cost affecting their cash flow,” says Dr Poornima Srinivas, owner and principal dentist of Hills Dental Design in Sydney’s Pennant Hills. “People requiring extensive dental treatments or orthodontics were asking if their payments could be spread out over the period of the treatment. That’s when we decided to offer payment plans.”

Payment plans benefit both the practice and patients. “Payment plans increase the likelihood of patients accepting rather than refusing or postponing treatment because they can’t afford it, which provides the practice with a steady flow of income,” says Dr Srinivas. “The plans give patients the flexibility to budget for their treatments, so they can maintain regular appointments and address dental issues sooner rather than later.”

There are a number of payment options that practices can implement. One of the most common is a credit facility that specifically offers finance for dental treatments, such as GEM Visa (offered by GE Money) or MAC Credit. These companies will provide practices with a link to their websites or application forms, process applications and check patients’ credit risk. Conditional approvals can be granted in as little as 24 hours.

Credit facilities are appealing because they are generally low-risk—the credit provider bears the cost of missed payments—and involve minimal paperwork. Credit providers will also release funds to practices within a short timeframe. Hills Dental Design receives funds within 24 hours of submitting an invoice to GEM Visa, while MAC Credit states on its website that in most cases, funds can be disbursed in full within 24 hours of receiving a signed contract.

However, not all patients are willing to take out a loan or credit card. “We found that some patients were hesitant to go with the commercial credit option we offered, which incurred high interest if they missed a payment. So we came up with an in-house, interest-free payment plan,” says Dr Srinivas.

If patients need comprehensive treatment and cost is an issue, Hills Dental Design will offer selected patients the in-house payment option. When the treatment commences, the patient pays 30 per cent of the total cost upfront, with the balance paid over the duration of the treatment on a weekly, fortnightly or monthly basis as agreed between the patient and the practice. The payments are deducted from the patient’s credit card account to provide ease of administration. 

“We offer payment plans because we want to enhance the value provided to patients. Patients benefit from an interest-free plan that allows them to spread the cost of their treatment.” John Gibbs, managing director and CEO, Pacific Smiles Group

“Fortunately, we haven’t had any bad debt experiences,” says Dr Srinivas. “We don’t offer the in-house payment plan to everyone and vet our patients carefully to make sure they can meet their obligations. To date, they have been regular with their payments.”

However, Dr Srinivas cautions that offering an in-house payment plan requires meticulous debt and cash flow management skills. “Our practice manager is responsible for processing credit card payments each week,” she says. “If we don’t process a payment, we miss out on the revenue, so it’s critical that we keep detailed, up-to-date patient accounts and remember to put through the right amount at the right time.”

Pacific Smiles Group is another dental services provider that offers payment plans. The group comprises 42 dental centres and 250 dentists in capital cities and suburban and regional areas in the ACT, New South Wales, Queensland and Victoria.

“We offer payment plans because we want to enhance the value proposition provided to patients,” says John Gibbs, managing director and CEO of Pacific Smiles Group. “Practitioners can do the right thing by their patients by providing them with the required treatment. Patients benefit from an interest-free payment plan that allows them to spread the cost of their treatment over an agreed time period.”

The payment plan is available for treatments with an out-of-pocket expense of $1000 or more. Patients must pay a proportion of the total treatment cost upfront, with the remaining balance paid off over
a period of up to six months. Fortnightly or monthly payments are debited from the patient’s nominated bank account or credit card. Pacific Smiles Group uses Ezidebit, a direct debit billing company, to facilitate and manage the payments.

Like Hills Dental Design, Pacific Smiles Group has not experienced any bad debt issues. “We have not seen any major downsides yet, only a couple of missed payments which were corrected in the next payment cycle,” says Gibbs. “If a payment is missed, the practice will follow up with the patient to determine the cause of the default before deciding on the appropriate response.”

When setting up a payment plan, Gibbs says it is important to “invest plenty of effort upfront to carefully design a program that works for your patients and your practice. While many payment plans may be similar, customisation is possible.”

For major procedures or an extensive program of work, dentists should discuss the cost with patients, advise them of payment options and ensure a suitable arrangement is in place before treatment proceeds. A financial support program is particularly critical for those practices that provide specialist treatments such as orthodontics or periodontics.

According to Dr Srinivas, dental practices should seriously consider offering payment plans. “The benefits of offering a payment plan far outweigh the risks involved,” she says. “Patients are much more willing to accept the treatment plan and more importantly, they are encouraged to look after their oral health. Our patients are appreciative of our payment plans.”

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