When I transferred into the dental healthcare sector from my prior years of experience in sales and consulting, my first position was with a corporate-style DSO as an office manager. Now say what you will about DSOs, but the one thing they do extremely well is gain heavy office traffic through targeted marketing. The owners of this particular dental practice had over 50 years of experience in the industry and shared much of their wisdom with me.
One of the most discussed topics for management within the DSO was the importance of offering several third-party financing options and to “Run every application…”. I have always been a firm believer in offering finance options for patients, as the greatest deterrent for the public in actively engaging with a dental practice is the cost of treatment. The Kaiser Family Foundation did a study back in the fall of 2021 and found that dental care was listed as the most difficult out-of-pocket cost to afford, ahead of rent or mortgage, prescription drugs, and hearing or vision care.
Personally, I have never been a big fan of in-house payment plans. I feel like the amount of time required in handling the accounts receivables and collections (with the potential expenses of staffing them) far exceeds the third-party lender’s fees. As a prior office and business manager/partner of dental practices, I have always disliked offering in-house payment plans. Dentists went to school and took CE to strengthen their ability to provide top-notch dental care to their patients, not to be bankers.
When I partnered up with a local dentist in town and we opened our own practice, I prioritized communication with third-party lending reps. As a practice that emphasized implant dentistry, I knew the importance of being able to offer patients options for their various implant treatments. Whether you’re providing a single tooth implant or a full mouth restoration like all-on-four or implant overdentures, patients need options to afford these significant expenses. Additionally, I feel it’s important to note that offering several financing options is better than just one or two.
Most dental practice owners only offer Care Credit as their financing option. Although I feel Care Credit is great in certain scenarios (their 6, 12, 18, and 24-month 0% interest plans), they don’t offer good interest rates on the extended plans (48 and 60 months). Whether you have an 800 FICO score with low debt-to-income or a 650 FICO, you are stuck at the flat 16.9% interest rate. Most patients with well-established credit are very aware of this and would never wish to proceed with financing an expensive treatment procedure.
This is the main reason I feel it is important to offer several options to your patients, depending on their treatment needs and wants. Third-party lenders like Lending Club, Greensky, and Proceed Finance are great options for the higher-priced treatments. They offer plans that extend out to 84 months and interest rates as low as 5.9%. Other lenders like United Medical Credit and Snap! Finance are great for offering finance options to patients with less than desirable credit. Just keep in mind that the loan amounts will typically be lower.
In closing, I sometimes hear hesitation from doctors on utilizing these lenders due to the expense of the fees they charge for each patient financed. I would propose that the revenue gained from closing more cases per month far outweighs this expense. After all, if a patient decides to go for a second opinion and never comes back because they found a more affordable option, that equates to $0 and open chair time.
Kelly Johnson