By: Tonisha Walton

Becoming the Bank for Your Patients: A Better Alternative to Third-Party Financing

August 14, 2024

Why Be Your Own Bank?

Third-party financing companies, such as CareCredit, often charge high fees ranging from 10% to 20%. Dr. Zak advocates for managing payment plans internally as long as the default rate remains low. This approach benefits the practice by retaining more revenue and helps patients avoid credit checks and cumbersome application processes, fostering higher trust levels.

Establishing Trust with Your Patient Base

Before implementing in-house payment plans, it's crucial to have an established patient base known and trusted by your practice. Extending payment plans to patients without a proven history is not advisable. Ensure that these patients are reliable, attend their appointments, and have a history of paying their bills on time. Over the past eight years, Dr. Zak’s practice has maintained a default rate of just 0.5%, demonstrating the sustainability of this approach.

Implementing Effective In-House Payment Plans

To successfully become the bank for your patients, Dr. Zak recommends the following guidelines:

  • Down Payment Requirement: Require a down payment of 25% of the total treatment cost or the lab bill, whichever is greater. This ensures fixed costs are covered. For example, if a full mouth reconstruction with 28 crowns costing $200 each is being done, the down payment would be $3,600. This covers lab costs, minimizing financial loss if the patient defaults. The only thing you will be out is your time.
  • Monthly Payment Minimum: Payment plans should not be established for less than $100 a month. If a patient cannot afford this, they likely cannot afford the treatment. Monthly payments should also be kept under $1,000 to avoid psychological barriers where patients compare their dental payments to their mortgage or car payments.
  • Payment Plan Duration: Ideally, payment plans should not extend beyond the treatment period. For instance, if an implant treatment takes 8-12 months, the payment plan should match this timeframe. Payments should be automated and tied to treatment milestones. If a payment is missed, the next step in treatment is delayed until the payment is made.

Example: For an implant treatment costing $4,800, a patient would start with a $1,200 down payment and then pay $350 monthly until the treatment is complete. This simplifies the process and makes it more manageable for the patient.  You are seeing the patient for post op appointments, implant placement, implant uncovering, restoration scan, and restoration delivery.  The patient has to be in contact physically with your office for multiple appointments giving you the opportunity to collect payment or insure that automated payments are being made. 

Key Benefits of In-House Payment Plans:

  • Lower Processing Fees: Compared to services like CareCredit, in-house payment plans reduce the expenses associated with third-party financing.
  • Increased Patient Trust and Loyalty: Patients appreciate the avoidance of credit checks and the personal touch of dealing directly with their dental practice.
  • Greater Flexibility in Payment Terms: Practices can tailor payment plans to match patient needs and treatment timelines.
  • Higher Profit Margins for the Practice: By retaining more revenue, practices can invest back into their services and patient care.

Enhancing Patient Confidence and Practice Growth

By implementing these strategies, practices can create a financially accessible and trusting environment for patients, ensuring they receive the care they need without the burden of high-interest third-party financing. This approach can potentially increase case acceptance rates and foster stronger patient relationships.

Dr. Zak’s experience in dentistry uniquely positions him to understand the challenges faced by dental practices. Apex Payment Solutions, offers tools to optimize payment processing, boost case acceptance, and improve collection rates.

Ready to implement these strategies in your practice? Contact us today to learn how we can help you create in-office payment plans that work for you and your patients. Together, we can ensure that financial barriers never stand in the way of quality care.

Visit our website at Apex Payment Solutions or call us at (800)-270-7164 to get started!

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