Don't be afraid to discuss payment

Accounts receivable is not an ugly term in itself.

As an unwanted orphan child in the business world, it is as constant as stains on your lab coat. It just comes with the territory. No one wants it but we have yet to come up with a way of avoiding it completely.

Most of the problem stems from an acute gut grabbing rollercoaster-like sensation that appears to hit doctors and staff alike when it comes to discussing money with clients.

Heavy load

Staff knows that the hospital is depending on them to collect every dollar of patient fees but, for most, it can be the most difficult part of their job. When they know that the client has financial problems, that knowledge feels like a hundred pound sack of manure (for lack of a better word) on their shoulders, just making their job all the harder.

From the staff's point of view, your fees almost always appear higher than they themselves could afford on what you pay them. Your staff can readily understand why clients might want to delay needed care for their pets just as long as possible.

Even though signs in the exam rooms stating, "Payment in full is expected at time of service unless prior arrangements have been made" will state the case, the fact is that some member of your staff is going to have to say to your client "Pay me now!"

Cost/benefit

Sandy Ross, a communications specialist, writing in Dental Economics/June 2001, stresses eight principles that every staff member dealing with fees needs to understand and understand well.

Principle one: Almost anyone can afford almost anything he or she really wants.

Principle two: Almost no one can afford everything he or she really wants.

Principle three: Almost no one wants everything he/she can afford.

Everybody makes choices every minute of the day. Some people sacrifice vacations for a "cool car." Others will look forward to overtime pay to finance a "spring fling." Everyone balances a purchase's perceived costs against perceived benefits to determine a relative value that is unique to each person.

The pleasure of knowing that their pet is dental tartar and periodontal disease-free is, for many, more important than many other wants they may have. And yet, you are likely to bump into the client whose pet's mouth is rotting away and who claims inability to afford good dental care in an expensive restaurant that weekend.

We can certainly disapprove of this client's choice, but it is his choice. He perceived his culinary choices to have relatively more value. Perhaps the disapproval should be directed more towards ourselves for failing to meaningfully communicate the effects of non-compliance on his pet's health.

Principle four: Clients know that services come with fees attached and also that you like to be paid.

Since both you and your client know this, it makes sense to discuss it before it becomes a problem. Wiser veterinarians will initiate the discussion rather than avoid it or delegate it! Addressing the health issues and the pet's comfort levels will go a long way toward establishing your client's comfort level with the fees to be paid.

Then just say, "Fluffy's mouth is infected and painful and we need to stop this infection now before it spreads too much more. I know that most clients don't budget for an expense such as this, so if there are any financial considerations that you would like to discuss before we start treatment, I'd be happy to discuss that with you."

Principle five: Confirm in writing what the client's choice of payment will be. If they say, "Doc, you do it now and I'll pay you for it in a month," just say that that won't work for you because you have to have a deposit and enough to cover your cost of labor and supplies now, but you can have them write a check for the balance which you will hold and deposit in a month, or "Why not just put it on your credit card and it won't even get billed for a month?"

Principle six: Everyone wants to pay less than they have to. In spite of a down economy, no one is lowering the price of bread, milk or gasoline. You did not create the dental problems and there is no reason to lower any fees to resolve their pet's problems.

Principle seven: Clients deserve to know the full fee before they commit to payment. You cannot even order in a restaurant without reading the menu and its fee schedule can you? While it is not always possible to know the full fee in the case of dentistry, for example, you can give the client a pager so that you can reach your client and discuss your findings after your full examination.

Principle eight: Discussing fees with a client who is not fully informed as to the cost of not treating the problem is a waste of everyone's time. The client must recognize that there is a problem. You and the client must agree on the severity and the need to resolve the problem and the client must have confidence that you really can solve the problem.

Finally, the fee must be broken down so that it makes sense to the client. I usually say "Between the lab tests and X-rays that I need to see exactly what needs to be done and especially to make the anesthesia as safe as possible, the anesthesia itself, and the treatment of the dental disease, we're probably going to run between $250 and $500. Of course, we do have a payment plan if that's any problem for you."

When a client emits the dreaded mantra, "I can't afford that!," all you have to do is to say quietly, "What do you mean by that?" They may say merely that "Well, I don't get paid until Friday," or "I get a check on the first of the month." That's when you say, "No problem, we'll gladly hold your check for a few days, what's important is to stop the pain and clear up this infection." This then is not an affording problem, rather a cash flow adjustment for both parties concerned.

Getting paid with hold checks is seldom a problem. Actual studies show that 98 percent of hold check dollars are collectable. When you consider that you give up 2 percent to 3 percent for any credit cards used, the 2 percent loss with hold-check credit is very acceptable.

Dr. Snyder, a well-known consultant, publishes the Veterinary Productivity, a newsletter for practice productivity and is available for in-practice consultation. He can be reached at 112 Harmon Cove Towers, Secaucus, NJ 07094; (800) 292-7995; Vethelp@comcast.net; fax: (866) 908-6986.