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Patient finance – a win-win for any practice

15 September 2016

Patient finance – a win-win for any practice

Business gurus quite rightly talk about taking steps to create a successful practice, such as ensuring it is well presented, with a welcoming environment. Reception staff should speak to existing and potential patients in a customer-friendly manner. Dentists should communicate with patients to understand their concerns and recommend the appropriate treatment.

Unfortunately, having done all the above there can still be a stumbling block – affordability.

Patients may fully appreciate the benefits of the suggested treatment and very often would like to proceed but if the cost seems beyond their means they will not do so.

Offering patient finance invariably solves this problem and, in addition to patient satisfaction from receiving the treatment, has a number of benefits for the practice.

The benefits of patient finance

I’ll list advantages of offering patient finance and then explain how easy it is to do so before explaining the principal benefits in more detail.

  • Increased treatment take-up will provide increased turnover and improved profitability
  • Improved cash flow, with payment being made at commencement of the treatment
  • Certainty of treatment – finance removes concerns relating to a patient who might struggle with making payment part way through a treatment
  • Removal of bad debt – the credit risk is borne by the lender
  • Removal of the cost and wasted time in chasing up slow payers
  • Providing the patient with the ability to consider more extensive treatments, rather than concentrating on the essential treatment only
  • Attracting new patients - you will get a better response to an advertisement relating to a £2000 treatment if it is marketed ‘from £40 a month’

So, yes, ensure that all the other building blocks are in place to make the practice an attractive environment which patients are happy to attend but don’t risk losing them because of their concerns about affordability. It is offering finance that can really help you reap the benefits.

How to offer patient finance

I talk to practice owners who have considered introducing patient finance but have not done so as a result of unfounded fears relating to the perceived difficulties in the process. In reality, offering patient finance is not difficult as I explain below.

There are certain matters that need to be addressed at the outset. Any finance intermediary worth their salt will be able to provide assistance with these.

  • Does the practice need to obtain authorisation from the Financial Conduct Authority (FCA)? It is now possible to offer interest-free finance for fewer than 12 months without any form of licence or authorisation. To offer longer term and interest-bearing finance it is necessary to obtain authorisation from the FCA. However, the cost of Limited Permission Authorisation is only £100. The annual renewal fee is on a sliding scale according to the amount of finance written and for most will be £145pa. Finance intermediaries will provide guidance and some will prepare your application without cost.
  • What finance options can be offered? Interest-free finance is certainly an attractive option for patients. However, because the patients are not paying interest, the cost is borne by the practice through a percentage (known as a subsidy) deducted at the outset. Other options are normally available and you need to decide which might be most advantageous for your practice.
  • How is finance to be introduced? Is the finance option to be introduced by the dentist, the treatment coordinator or the reception staff? Ideally, the ability to spread the cost should be mentioned in the same conversation as the treatment price itself. Hopefully, the patient will recognise the benefits of the treatment and the ability to spread the cost should allay their concerns about affordability.
  • Who is going to discuss finance with the patient and where will they do it? Assuming the dentist introduces the concept of finance, someone else needs to discuss it in more detail with the patient and, ideally, need to do so in private. The discussion will probably only take five or ten minutes but privacy is important.
  • How will the application be processed? There are different processing options, ranging from the submission of paper applications, to online processing or to the patient processing an application themselves and e-signing the agreement. The choice is yours – what will your staff and patients be most comfortable with?
  • Is any training available? Finance intermediaries will normally offer in-practice training to discuss all of the above and to ensure staff are happy with the process.

Likely benefits in detail

Some practices managers and principals believe there will be limited demand because “No-one asks about finance.” Unfortunately, a lot of patients don’t like to ask but would appreciate it to be offered. You don’t instruct your staff not to mention evening and weekend appointments, dental plans, your free car park and so on.

The benefits of patient finance to any practice can come about in three principal ways:

  • Patients that would previously have departed saying they would ‘think about it’ will be more likely to proceed straight away. For example, £1800 of treatment might have been difficult for them to pay for in one go, whereas £150 a month over 12 months on an interest-free basis could make it easily affordable. A patient who is convinced of the benefits or necessity of the suggested treatment is likely proceed on this basis.
  • When apprised of the finance options, some patients will proceed with the full treatment package rather than deferring part or parts of it.
  • Some potential patients will be attracted to the practice because of the finance facility enabling them to spread the cost. There will be plenty of potential patients considering dental implants, orthodontic or other cosmetic treatments who will be reluctant to make contact because of the cost. Advertising affordable monthly instalments may be all they need to persuade them to contact you.

The bottom line?

Take-up varies from one practice to another, largely due to the level of commitment within the practice in offering the finance options. However, practices that offer finance regularly normally achieve a position where one in four or five of their more sizeable treatments proceed with finance. This will be brought about by a combination of existing patients deciding to proceed and new patients being attracted by the ability to spread the cost. A practice annual turnover of £300k can quite easily become £360k. A turnover of £600k can become £720k – or more.

Wherever you are and whatever type of private treatment you offer, there will always be patients who wish to consider spreading the cost. A significant and growing number of practices have already realised the benefits of offering finance and if you don’t offer it others will.

About the author

Brian Carter is a director of Financing First Limited, a credit broker authorised and regulated by the Financial Conduct Authority. More information about dental finance is available here:

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