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The Commitment


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Lesson #7: CORE Lesson #7 – Financial Arrangements

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Action Items

  1. If you don’t regularly use 3rd party financing, look into options and see if it fits into your practice.

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Hey, what's up everybody? This is Dr. Steven Schluentz. I want to welcome you back to another video. And we are on the last video of Module 7 which is The Commitment phase. And we are going to be talking about something that's very important that nobody really likes to talk about ever. And that's money, making sure you get your financial arrangements right.

And so when I was thinking about this video, this is one that I get asked a lot about. And it's actually one of the hardest ones for me to talk about because I can't give you specifics because every office is different, and so what would be the appropriate amount of money for somebody to be able to pay. And listen, every practice is different. And you guys are all going to view this differently.

For example, an older more mature office is probably going to be able to do more flexible financial arrangements simply because their overhead is lower. Their costs are lower. They're able to begin treatment sooner. Well let's say a younger practice has more overhead, has more bills that it has to pay when it's first starting, then financial arrangements is probably going to be a little bit more... More money is required upfront.

The sad part is the smaller office, or not the smaller office, but the office that's just beginning and has more overhead actually is the office that needs the money more. So it's two sides of the same coin. Or that doesn't make sense. Let me rephrase that. It's really sad and ironic that the practice that needs the money the most is also going to have to charge more upfront which creates more barrier.

So what you want to do is figure out a couple things as I go through this. One is what is the actual fixed cost of doing the procedure and know that upfront before you go to the patient. There is nothing worse than when you're starting to talk about financial arrangements with patients and you have no idea as to what is required for you to get started. You need to know that number and you need to be smart about it. You can't just make a number up. Understand that... Some of the cases that I do for example, the fixed cost is really low because I'm not placing implants. I'm not doing crowns. I'm doing a lot of composite. So once I get the wax-up back, it literally... For me, the fixed cost is how long does my assistant going to have to be there? How much composite do I need? And then how much does it cost for me to run my building. And it's not very... That's not a big commitment.

And then I always think to myself, what is the number that I need to be to actually be in this practice? What is the amount that I have to make in a day for me to be in this practice? So you can make a list. You can start to estimate costs and things like that. But you need to know that number.

And then you need to figure out what is our philosophical setpoint in this practice, okay? You need to know that and be consistent with it and have some financial arrangements in place that your office has all agreed upon, like the holy grail if you will, because it makes everything easier.

I actually have taken a lot of this and put it into the hands of my office manager, my front office person, because I don't want to have to think about this all the time. I've gotten to my practice now to a level like, "Listen, I just want to do the dentistry. So now that we know where we're at financially, I'm going to give you wiggle room to be able to work out the money aspect of it after they've agreed to the treatment cost."

So this is what dentists want to do though. Most of them don't want to talk about money at all. So they don't even talk about the final fee with the patients. And then they pony that off to somebody else. Now here's the problem with that. I fundamentally believe, and this is just me personally, that if you're going to be presenting a $30,000 case, you should be the one telling them it's going to be $30,000.

Now I know that I differ from a lot of people when they say that... They said, "You don't want to be the bad guy and the money and things like that." That doesn't make any sense to me. Do you think a patient doesn't understand that you're the one who sets the fees? So they already think you're the bad guy. So it's never made sense to me why you wouldn't want to have that big number upfront and say, "This is what it's going to cost. But we're going to work with you to make financial arrangements so this can be affordable and feasible for you." Okay?

The other flip side is when dentists don't have any financial arrangements in place and say, "Half now and half at the time of service." You can do that. And I know practices are very successful doing that. But for most offices, you want to have some flexibility so patients can say yes to this. If it's a $40,000 case and they don't have the option of going three or five years and letting a 3rd party financier take care of all this, you're really shooting yourself in the foot before you even start because almost nothing now is on upfront payments. Everything is a payment over time, almost everything you buy now. And so we live on credit. We live on payments.

Make your dentistry affordable so that patients don't have that barrier. It's easy for them to say, "Yeah, I just don't have $20,000. I can't do this." Don't make that decision easy for them. Say, "You know what? For $300 a month, you can basically get the mouth that you've always wanted and the health you've been aspiring to get. Isn't that worth it to you?" So you need to have in my opinion financial arrangements.

And me as a doctor... Now listen, if you are fundamentally against presenting the fee, then don't do it. But if I'm the doctor and I can't look at you and say, "This is going to be a big investment. But I think it's an investment worthy of you. And it's going to be $30,000." If I can't do that as a dentist, I got something fundamentally wrong with what I believe in. Right? And it's not easy. I'm not saying that it's easy. It takes some practice. But over time, you'll build up that muscle. It'll get easier.

But if you say, "No, I'm absolutely not doing that. I'm going to have somebody else present the fees," you better find somebody that's good with money because if you don't, you're going to be shooting yourself in the foot. That person will actually be subconsciously sabotaging your acceptance rate because if they don't have a good view on money... And this is kind of the higher level stuff that I talk about with some of my higher level clients, that if you don't have a good view on money, you're going to be in trouble when you get to this stage. And you'll do everything you possible can to avoid this. But you need to get this upfront. Okay?

So let's go back to financial arrangements. You need to have a dentistry that's affordable so that patients can fit it in their budget. Have some options for them for monthly payments. Everything is on payments these days. I don't think dentistry should be any different here. You can use 3rd party finance. But I have another video in this program that's all about third party financing, okay? There's so many different tools. And by the time that I put this out, there's probably another two or three companies that allow you to have 3rd party financing.

You need to know what their rates are. You need to look at the fine print. LendingClub is out there, and CareCredit, and Compassionate Finance. Those are the three that I can think of off the top of my head. But like I said, by the time you watch this video, there might be two or three more. Know what their rates are. Know what you're cost is to get them financing because sometimes it can be 10-15% of your fee is going to go towards them getting the money for you upfront, okay?

You want to be able to extend payments without jeopardizing the practice. Does that make sense? You can't put your practice in a financial buy by trying to extend out payments. So when you're doing full-mouth cases, you just as easily could be doing bread and butter dentistry on some of these days as well. So what you don't want to do is have two days that are dedicated to a full-mouth case that you don't actually get payments on. And then at the end of the month, you realize, "Oh my goodness. I did a really big case. But I didn't get any payments on any of this. I lost two days of production on my practice." You can't do that. You need to know what your fixed overhead cost is so that you're not losing money when you're doing these cases.

And again, I offer an incentive for Self-Pay, for those that pay at the time of service, right? If they want to go and finance everything themselves and they say, "You know, I'm just going to put it on a credit card. I'm going to take out a loan," I'm going to give them a financial incentive for whether it's 5%, 10%. Every practice can be different. But I'd rather pay them 10% and have them save money than pay 10% to CareCredit for them to give me the opportunity to get this personal loan. So I'd rather pass the savings onto the patient if they're able to come up with the money upfront because I know on the backend I'm going to be paying 10% if the take out financing.

So just think these things through. Really have a concrete plan in place. How are you setting up your financial arrangements? What is your office policy? And how do you stick to that office policy as much as humanly possible? And so your action step is if you don't regularly use 3rd party finance, you need to look into options and see if it fits into your practice. It's been a game changer for me. There's been at least three to five cases that I can think of that would've not happened if I did not have 3rd party financing. It just would've not happened. But the ability to use that took down this preconceived barrier that the patient had and they were able to move forward with therapy.

So look into 3rd party financing. Get a financial structure in place in your practice so that you can offer different types of financial arrangements to your patients so they can say yes.

I hope you enjoyed this video. And that's Module 7, guys. You are on the Module 8. Congratulations. You're getting almost through to the completion of this entire program. So fantastic job. Keep up the good work. And I'll see you at the next video.