Patient affordability is a critical challenge in many industries, and dental practices are no exception. Fortunately, the right tools and strategies can help you make your services more affordable for patients.
Many third-party financing companies offer healthcare credit cards to patients that allow them to divide the cost of treatments into monthly payments. Learn how these options benefit your patients and practice.
Flexibility and Convenience
Dental financing is a range of payment options and credit arrangements designed to allow patients to manage the costs of dental procedures. Often referred to as “healthcare credit,” these financing alternatives include payment plans and credit cards specifically designed for dental expenses and traditional loans available through banks and private lenders.
Sometimes, third-party financial solutions are described as “dental insurance,” but this terminology is misleading. Unlike actual insurance, where premiums are paid to cover the risk of significant losses, third-party dental plans typically collect periodic premiums from a group of people to pay for the cost of their health care. These plans may also include copayments and annual expense limits that limit the financial risks dentists and patients face.
No Delay in Treatment
Many dental patients can’t afford to write one extensive check for their treatment. This is why patient financing is so necessary. It allows dental patients options for affordable dental payment plans. It splits up the cost of their care into manageable monthly payments, making it more feasible for them to get the necessary procedures done without delay.
Third-party financing can take many forms, from healthcare credit cards to personal loans and in-house dental finance programs. In general, however, these arrangements are made between the third-party company and the dental practice rather than between the dentist and the patient.
The ADA does not oppose capitation as the primary reimbursement form in prepayment plans. Still, it wants such plans to be subject to the exact quality-control mechanisms as fee schedules or other traditional insurance forms. These include periodic examinations of a sample of the dentist’s services by outside consultants to ensure that the treatments claimed and paid for are appropriate and that the same level of care cannot be provided at a lower cost.
The goal is to ensure that no one has to suffer unnecessarily or go without the critical dental work they need because of financial limitations. That’s why offering in-house financing and connecting patients with third-party patient financing options is so important for dental practices.
Reduced Risk of Complications
Dental treatment can be expensive, and patients may be unable to pay for it out of pocket. Third-party financing companies can help lower the cost of dental care by offering patients affordable payment plans. With high credit limits and convenient repayment terms, these companies can make dental procedures more accessible to patients who would otherwise be unable to afford them.
When a patient is approved for a loan, the lender will typically send the payment directly to the dental practice. This allows the dentist to avoid paying for the patient’s dental treatment out of pocket, thus saving administrative costs. In addition, a dentist can use this type of financing to offer discounts to attract new patients.
Employers, unions, or government agencies subsidized many of the earliest group prepayment dental plans. The actuaries who designed these programs knew that their policies could cause moral hazard, whereby workers would seek additional care when they saw the cost of dental treatment fall. To mitigate the effect of moral hazard, these plans included mechanisms such as cost controls and tables of allowances.
In the future, private and public dental insurance must continue to grow to reach more workers. However, the nature of these policies must also be reexamined. Ideally, these plans should pay for outcomes rather than checklists of procedures with tooth-by-tooth limitations and arbitrary dollar limits.
Dental financing platforms offer dentists the opportunity to increase their patient base while making necessary services more affordable for patients. This can help increase the likelihood of patients accepting treatment as it eliminates the need to use their credit cards or take out personal loans to pay for services. In-house financing also provides patients with a more streamlined experience by removing the need for them to search for third-party lenders.
Dental practices need to communicate all available payment options to their patients. Many patients cannot afford to pay for their entire appointment upfront, so it is crucial to offer flexible payment plans. Marketing materials such as posters, brochures, social media, and website banners can help spread the word about these new payment options. Including a link to an online financing calculator can also be helpful for potential patients to see how they can afford their dental treatment with these flexible options.