Do too many of your patients owe you money? It’s a symptom of an even bigger problem! In this episode, Kirk Behrendt brings back Robyn Theisen, one of ACT’s amazing coaches, to break down overdue accounts and share a four-step solution to eliminate it from your practice. To learn how to collect from patients before day 30, listen to Episode 965 of The Best Practices Show!
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Episode Resources:
Main Takeaways:
Quotes:
“What happens is [overdue accounts] causes stress for the doctors and the team. It impacts profitability and impacts the ability to invest back into the practice. So, making sure that you are collecting for what you produce is an important part of the day-to-day operations.” (3:38—3:53) -Robyn
“[Overdue accounts] happen more than most know that it does. When I see practices, a lot of times I see 4% or 5% that is not collected. It doesn't seem like a huge amount. But when you break it down, that really makes a huge difference from a practice perspective. What it also does is that there is an element to that with patients of, we're not having upfront conversations with them, which impacts the way that they behave. It impacts the trust in the practice and different things when you aren't having upfront financial conversations with patients about what their investment is.” (4:46—5:20) -Robyn
“[Have] a strong financial policy. There's an internal and an external facing policy, so it is defining first your internal facing. What are our expectations for patients when they come in for appointments? What are the options that we have in terms of making it affordable for them? What are our processes and our protocols for that internal facing financial policy? Then, there's the external where it's for the patients. And yes, we have them written. Yes, we have patients sign all of these things in their new patient paperwork. I'm guessing that most patients don't actually read them, so having a system to be able to verbally tell patients what that policy is, what the expectation is, and train our patients to know what they can expect when they come in in terms of what their financial obligations are.” (5:44—6:31) -Robyn
“One of the biggest factors is trust. We know that that is what impacts many people for moving forward with treatment or accepting treatment, is having trust in the practice. Money can be very emotional. So, by having clear, upfront — when the patient knows exactly what is expected of them, trust is built. They are more likely to move forward with treatment when they know exactly what their financial obligations are. It's far worse to send them a bill later on and have them not have expected it.” (7:56—8:25) -Robyn
“We can't fix what we don't measure. If we don't know where we're starting, we don't know when we've had successes or wins, and we don't know what part to attack. So, one of the biggest things, and we talk about this a lot, is the collections percentage. When you think about your net production or the production that is after any adjustments and is collectible, what percentage of that are we collecting every month? I referenced earlier that 4% or 5%. I see practices at 95% or 96% collections. And while that is an “A” in many areas, that is leaving a lot on the table in terms of a collection percentage. So, really, 100% is what we're shooting for.” (9:31—10:08) -Robyn
“A good rule of thumb is you want your AR ratio to be one to one, which means if I collect $100,000 a month, I do not want my AR, my accounts receivable balance, to exceed that $100,000. So, we do not want our AR to be more than what our average monthly production is. That's a good rule of thumb to keep that ratio in perspective. That means that what we produce in that month, we're collecting.” (11:45—12:09) -Robyn
“[Review] balances as they go into different buckets. So, a bucket would be 0 to 30 days, which is current. Then, once it hits 31 days, it is now a past-due amount. So, what amount of your AR falls into each bucket, and how quickly do we get on that when it goes into the next bucket? So, really keep an eye on those. Statistically, as those buckets keep going down the line . . . you are 50% less likely to be able to collect that amount once it gets to 90 days when it travels from the 30 days. So, at 31 days, you have a 90% chance of collecting. After you get to 90 days, it's down to 50% likely to collect that balance.” (12:56—13:45) -Robyn
“Once you know that you have some accounts that are overdue, what is our plan to collect on it, and being able to define a system to know exactly what are we trying to accomplish here. One of the big things too would be to show your team what impact AR has on them. That 3% or 4%, how does that impact us long term? Show your team some of those things so they can get on board with it. Then, assign ownership. Who is going to do this? Who is going to be responsible for the result? How do they get there? What is the step-by-step guide to when we send statements? What do we say to people? When do we text? When do we email? All of those kinds of things to really lay out a plan for how we're going to get there.” (15:08—15:51) -Robyn
“If we have systems and they're not implemented, they're sure to fail. So, we have to really be consistent in how we are tackling these overdue accounts. We don't need to wait for balances to age. Schedule a meeting every week with whoever is managing your AR. Chip away at these. Be consistent with it and really like, ‘What did we do this week? How much did we accomplish?’ Let's celebrate those wins and, ‘Okay, what does next week look like?’ Let's keep tracking the progress so that you can make sure that nothing slips through the cracks. So, having those weekly meetings would be a great place to start, and really understanding it.” (17:54—18:27) -Robyn
“Along with those weekly meetings, I think one of the big things that teams can do is make sure that you're sending statements weekly. A lot of practices are sending statements monthly. By the time that a patient has received that, it is artificially aged to potentially 45 or 60 days. If we send them weekly, you're getting patients right as insurance checks have come in, or they've made a payment, and now we're moving on to it so that those balances don't increase and artificially age over time.” (18:30—19:03) -Robyn
“The more upfront we are with patients and the more transparent we are, the more trust they have in us and the better relationship that we have with them overall. Clear is kind, and it's kind to tell people exactly what the investment is before they get into a place that they're uncomfortable and then they don't come back. So, it really is a kind thing to do to let patients know up front exactly what they can expect from the investment.” (23:36—23:58) -Robyn
“Once the balance hits 30 or 31 days, it's overdue. So, what’s our plan to address those immediately? Then, what's the plan on the front end to not let it get there? So, we've got to attack it from both sides when you have some overdue accounts. The older the balance is, the harder it is to collect. So, being proactive on that and making sure that we don't let it go there is a big part of that. The third thing I would say is those weekly meetings. Print out your AR report. What accounts are over 31 days? What's our plan for that? Then, next week, how did we do with that? What's our plan for the following week? Really tackle it that way.” (24:06—24:39) -Robyn
Snippets:
0:00 Introduction.
3:32 Overdue accounts, explained.
5:22 Have a strong financial policy.
9:19 Know your numbers.
14:57 Document a system and create a plan.
17:45 Work the plan.
24:00 Final takeaways.
Robyn Theisen Bio:
Robyn Theisen brings an entire life and legacy of dental experience to the team and every team with which she works as the daughter and sister of dentists. With almost 20 years of experience in dentistry, her roles ranged from practice management to operations at Patterson Dental to coaching teams. Robyn’s passion is empowering teams to realize that they can dramatically impact the lives of the people they serve by implementing skills and systems to remove barriers to life-changing dental treatment. She has done it for decades and does it every day with dental teams.
Outside of coaching, she enjoys time with her husband, Rob, and two daughters, Emerson and Ruby. She loves traveling, music, fitness, and cheering on the Michigan State Spartans.