The Horrible Truth About Collections

Now we did it.  We said the word collections.  No one is going to read this blog ever again.

This is sort of the dark underbelly of a practice…collecting money.  It’s the part no one wants to talk about.  Like taxes and OSHA, there are certain aspects of practicing that people could do without.

Everyone is in favor of getting paid–it’s just the collecting money part they wish they could skip.

However since it is a necessary evil, is there a way to clarify the subject or make it less painful in any way?

Clarify it?  Yes.  Less painful?  Ummm…

Ok, joking.  It’s not that bad really.

Let’s review the problem here.  Practices deliver treatment to all sorts of people.  They have expenses (payroll, supplies, insurance, rent, etc.)  They need to get paid.  However, people don’t always pay.  Insurance companies don’t always pay.

The secret of collections is actually really simple–ask for money.

No, seriously.  We see this all the time.  The number one problem that we see with collections is actually amazingly simple.  Practices simply don’t ask for money.

A person finishes up his treatment and goes to the front desk, fully expecting to pay.  The front desk thanks him for coming and sends him on his way, telling him he’ll get a bill in the mail.  Doesn’t even ASK him for money.

A person is told they need a treatment plan.  However, rather than waiting to see if the person can work out how to pay for it, they instantly assume that they don’t have money or won’t want to pay for dental work and so give him another, cheaper, option.  However, the funny thing is that the patient actually needs the first option.  That’s what would be what would be best for him and probably what he would be happiest with in the end.

Some practices don’t even send out bills sometimes.  It’s true!  We’ve seen it.

Doctors will sometimes just give away treatment.  The patient isn’t even a friend or family.  The doctor doesn’t even tell the patient that he’s doing it so that the patient understands what just happened.  The patient thinks he’s paying full fee because the doctor never even told him that he did two or three things for free.

This is one of the ways that a practice stays broke while working hard.

Let’s look at it this way: You do a lot of work–a lot of hard work.  You provide good service.  You went to school for years.  You studied and skipped out on other things you could have done.  Even today you don’t do things that you could be doing, taking time off for yourself or your own hobbies.

You work hard to provide the best treatment possible.

That’s valuable.

You deserve to be paid for it.

You and your office staff don’t have to be pushy or rude–but you do have to actually ask for the money that is owed.  This can be cheerful and friendly, but it can’t be overlooked.

Too often practice owners see this as dirty or greedy, but it’s a vital part of running a business.  Billing and collections are necessary to keep the lights on and provide future service to those who are counting on you.

The four most key points of collecting money are:

1.  Treatment plan presentation.

Present the treatment that the patient actually needs–not what you think he can afford.  Make sure that you are absolutely thorough in communicating why he needs it so that he can understand it himself and be able to weigh the options.  Many patients will just go with the cheaper option because they don’t even understand the difference between the two–even if the more expensive option would be much better in the long term.  People will often select the more expensive treatment with no persuasion at all–if they fully understand it and the ramifications of it.

2.  Free Service.

A doctor may feel bad that he is charging what he is, even though it is a fair price.  As a result, he’ll throw in extra services or products.  It’s sort of tricky way of not getting paid.  You see, he didn’t discount the services he billed for–he just did some other things for free.  Often the patient or client doesn’t even know this was done.  The doctor just subconsciously believes that all of his patients think his prices are too high and so does freebies to make them cost less.

There are two things wrong with this.  First, his prices aren’t too high.  His services are valuable and he deserves to be paid for them.  Secondly, he isn’t fully confronting HIS costs.  You see, the bank isn’t going to cut him any slack.  The suppliers aren’t going to give him free supplies.  The landlord isn’t going to give him a free month’s rent.  HE still has all the same expenses to stay in business, but now he’s making less.  He gets overworked and feels under pressure as a result.

Any doctor has to make money just to stay in business in order to help more patients.  You can’t treat anyone if your electricity is shut off.

3.  Front desk.

Make sure the front desk is trained on actually asking for payment whenever possible.  Don’t let them get into the habit of sending everyone on their way.  People expect to pay when they go to any restaurant or store in the world.  They won’t be shocked that you’re asking them to pay–and the best chance to catch someone is before they even walk out your door.

4.  Billing.

Make sure your billing is in good shape.  A practice has to send out regular bills that are very clear and easily understood.  They also have to be consistent.  If the practice doesn’t follow up, the patient or client very likely may not pay.  The same sometimes goes for insurance unfortunately.  Pushiness is not needed here–persistence is, however.

If you just focus on the four points that we listed above, you can raise your Collections Ratio almost without even trying.  Again, you don’t have to be mean or demanding or stingy.

But you do have to ask.

 

Have a question about your practice?  Try our free “Ask a Consultant” service.  Just send us your question in the form below.  We’ll email you back as soon as we can and may even post our answer to your question (but not your name) for others to see in the future.

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