Dental Care Crisis?
It’s no
surprise that America is in a dental care crisis. According to a study done by
‘Statistics Brain’ in July 2013, nearly 50% of Americans do not see their
dentist on an annual basis. At an even more alarming rate, the average time in
between dentist visits has increased from one year to 3-4 years. Why is this? Many studies have shown it is
due to substantial increase in pricing and the lack of coverage by most dental
insurance plans. Many people think
“Because I need this dental work, my dental insurance will pay for it!” or “My
dental insurance will pay 80 percent of what I need to fix my dental problems!”
When the reality is people who have “dental insurance” really only have minor dental benefits that are
determined by their employer and an insurance company. A dental benefit is more
like a coupon. It doesn’t pay for the entire product or service. It only pays a
limited percentage, and it has a maximum it will pay each year.
Dental Costs Up, Insurance Coverage Down
According to
MckinneyDentist.com, in 1972, most dental plans covered $1,000 to $1,500 per
year, and most companies paid the premiums. At that time, crown fees were
around $400 and insurance could, would and did pay for 80 percent. Basically, a
patient could get three or four crowns a year to repair broken down, filled
teeth and in a few years, their mouth didn’t need any more major work. Plus,
the patient could get two cleanings a year and not even approach their
insurance limits. That was a great deal for patients and dentists. Forty years
later, most plans still have $1,000 to $1,500 annual limits, and many people
are paying half or all of the premiums. Today’s crown prices have more than
doubled so one or two crowns will basically wipe out a year’s benefit, at least.
Consumers
also believe that ‘the dentist and dental team should know what a person’s
dental benefit is and what it will cover and pay, and if the insurance company
doesn’t pay, it’s their problem.’ When in reality, the dental insurance
contract is between the employer and employee (the patient), and the insurance
company. The dentist has no influence on what “should be covered”. The employer
and insurance company negotiate these things ahead of time. The dentist is caught
in the middle, and the patient is left to figure out how to pay for treatment
that isn’t covered.
Patient Financing with Credit Plans
In response
to these circumstances, more dental practices have begun offering patient
financing. In many cases the financing
is through a third party, and the benefit to the patient is obvious: they can
spread their payments out over time, which eases the financial strain when it
comes to costly procedures. Some
practices accept “medical credit cards,” and the patient must be approved for a
credit line. If approved – and according
to some statistics, as few as 1/3 of applicants for these types of credit plans
are – the patient typically has 6 to 12 months to pay off their balance in
full. The monthly payments are usually
reasonable, but there is the potential for complications. If the patient misses a single payment, or if
they are unable to pay their balance in full by the end of the payment term,
they may incur interest charges exceeding 25%, applied retroactively on their
entire balance.
These types
of third party financing plans benefit the dentist by paying the treatment fee
upfront – but the dentist has to sacrifice as much as 10% of that in order to
offer the payment plan.
Interest-Free Installment Payments
Recently, an
alternative form of patient financing has become available, through third party
billing companies – such as EBCS – that will electronically draft payments from
the patient’s checking, savings or credit card account. The payments are typically debited on a
monthly basis, and the plans are interest-free.
In the event that a payment returns or declines, the billing company
handles the contact with the patient, instead of the dentist’s office.
For the
patient, breaking up the total cost of treatment into installment payments not
only increases affordability, it also translates into a greater willingness to
seek follow-up or elective procedures.
For the dentist,
these types of plans are available at low cost, or in some cases, no cost to
the practice. Administrative fees are
passed on to the patient in the form of a modest enrollment fee, along with a
few extra dollars charged for each automatic withdrawal. Most patients are more than willing to pay
these fees, which add up to a negligible percentage of their total treatment
cost. They consider it a small price to
pay – literally – for the ease and convenience of a payment plan.
To minimize
concerns about risk of delinquency, the dentist can also purchase a credit
recommendation system that delivers instant decisioning via a soft credit pull,
as well as guidelines for determining the amount of down payment and length of
payment term.
As
out-of-pocket dental costs rise, due to the increase in treatment fees and
reduced dental coverage, it is well worth it for dental practices to consider
offering patients as many flexible payment options as possible. Patients will appreciate having choices, and
dentists will realize the benefit of increased case acceptance, coupled with a
reduction in delinquencies and accounts receivable.
For more
information about setting up an in-house payment plan for your dental practice
through EBCS, contact us: Electronic
Billing & Customer Support, 800-766-1918, Monday through Friday, 9:00 am –
6:00 pm Eastern.
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