Don't be afraid to discuss payment

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Accounts receivable is not an ugly term in itself.

Accounts receivable is not an ugly term in itself.

As an unwanted orphan child in the business world, it is as constantas stains on your lab coat. It just comes with the territory. No one wantsit 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-likesensation that appears to hit doctors and staff alike when it comes to discussingmoney with clients.

Heavy load

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

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

While signs in the exam rooms stating, "Payment in full is expectedat time of service unless prior arrangements have been made" clearlystate the case, the fact is that some member of your staff is going to haveto say to your client "Pay me now!"

Cost/benefit

Sandy Ross, a communications specialist, writing in Dental Economics/June2001, stresses eight principles that every staff member dealing with feesneeds to understand and understand well.

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

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 sacrificevacations for a "cool car." Others will look forward to overtimepay to finance a "spring fling." Everyone balances a purchase'sperceived costs against perceived benefits to determine a relative valuethat is unique to each person.

The pleasure of knowing that their pet is dental tartar and periodontaldisease-free is, for many, more important than many other wants they mayhave. And yet, you are likely to bump into the client whose pet's mouthis rotting away and who claims inability to afford good dental care in anexpensive 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. Perhapsthe disapproval should be directed more towards ourselves for failing tomeaningfully communicate the effects of non-compliance on his pet's health.

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

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

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

Principle five: Confirm in writing what the client's choice of paymentwill be. If they say, "Doc, you do it now and I'll pay you for it ina month," just say that that won't work for you because you have tohave 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 holdand deposit in a month," or "Why not just put it on your creditcard and it won't even get billed for a month?"

Principle six: Everyone wants to pay less than they have to. In spiteof 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 anyfees to resolve their pet's problems.

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

Principle eight: Discussing fees with a client who is not fully informedas 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 mustagree on the severity and the need to resolve the problem and the clientmust 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 seeexactly what needs to be done and especially to make the anesthesia as safeas 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 havea 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 yousay, "No problem, we'll gladly hold your check for a few days, what'simportant is to stop the pain and clear up this infection." This thenis not an affording problem, rather a cash flow adjustment for both partiesconcerned.

Getting paid with hold checks is seldom a problem. Actual studies showthat 98 percent of hold check dollars are collectable. When you considerthat you give up 2-3 percent for any credit cards used, the 2 percent losswith hold-check credit is very acceptable. Of course, you will do very muchbetter using the "Hold Check Agreement" that I have posted foryou on my Web site http:/www.veterinaryproductivity.com.

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