Money Talks

How Your View of Financing Could be Hurting (or Helping) Your Practice

When was the last time someone asked you to sign up for a credit card? Last week, yesterday, or maybe even today? As consumers, we're asked about financing at nearly every store we shop at, from Home Depot to Home Goods and from Best Buy to Banana Republic. Everyone asks, "Do you have our credit card? Have you joined our loyalty program? You can save 20% by financing today!" No matter if it is a $20 purchase or $2000, the refrain is the same.

Surprisingly, most medical practices fail to offer financing nearly as often and as proactively as these big box stores, even when the purchase amount is significantly higher. When asked "why," coordinators, counselors, and schedulers often share:

"I don't feel comfortable talking about money; it's just too salesy in a medical setting."

"Our patients are wealthy (or we practice in an affluent area), and they don't need financing."

"We tell them about financing. It is on our website, in our patient information packets, and we have brochures in the waiting rooms. If they're interested, they let us know."

At Alphaeon Credit, we've heard these responses hundreds, if not thousands of times, and we know practices that think this way tend to experience slower growth year over year compared to their peers in the same market. If you're interested in growing your practice and have ever found yourself repeating the statements above, please read on to maximize your growth potential!

"I don't feel comfortable talking about money; it's too salesy."

Remind yourself that you offer procedures and treatments that benefit the patient and are life-changing in many cases. By talking about finances, you're only helping patients get what they want and what you recommend. Talking about cost and the patient's financial situation is a positive; it is simply helping them.

If you're not mentioning the total cost until the end of the conversation, consider talking about it earlier and the availability of financing options. Patients know that procedures and treatments come with a price tag and start an internal dialogue regarding their finances from the start. They wonder, "How much is it? or "How am I going to pay for it?" As they have these thoughts, they tune out and may miss crucial information. How many times has a patient forgotten something you said? There’s a good chance they may have been thinking about the price instead of listening. By addressing cost early, you can ensure your patients can focus on what you are saying.

One of the best ways to get comfortable talking about money is by writing a script. You can adjust depending on the situation, but a well-written script provides the framework to help you discuss costs confidently. You may also incorporate elements of your script into the paperwork you share with patients so that you can read off your script without the patient even noticing. After writing your script, rehearse with some team members. Practice makes better! You can also email teamcredit@alphaeon.com to rehearse with a Business Development Manager or for help drafting your script.

"Our patients are wealthy (or we practice in an affluent area), and they don't need financing."

Over a decade ago, a plastic surgeon in Beverly Hills made a similar statement to an Alphaeon Credit team member. He advised the doctor, "Humor me. Just put out some brochures and see what happens". The doctor agreed and two months later called to share his surprise at finding out several wealthy patients were very interested in financing and eagerly applied and used their cards to pay for their procedures. We’ve had the same conversation and seen similar results hundreds of times since then.

When it comes to financing, many presume that financing is only for those with no other way to pay. In fact, financing, especially no-interest plans, is incredibly attractive to those who have cash in the bank. We’ve even had a patient who earns $900,000 a year apply for Alphaeon Credit! With no interest plans, the patient can borrow money at 0% while their money remains invested, earning interest. Utilizing no interest plans can be a wise financial move as long as the patient pays off the balance before their promotional plan period expires. Plus, making a large purchase, regardless of an individual's income, can create anxiety - financially and/or emotionally. Breaking down a large expenditure into smaller monthly payments can reduce this stress as the figures are more manageable.

"We tell them about financing. It is on our website, and we have brochures in the waiting rooms. If they are interested, they'll let us know."

When a patient is considering a procedure or treatment, often there is a tremendous amount of information to absorb. Most websites don't place financing in a prominent position or make it easy to find. Usually, financing is under "patient resources" or "insurance," so while financing pages tend to rank high in viewership, there is a good chance your patient didn't see it. And if the patient is in the waiting room, they are likely looking at their phone and not at the brochures scattered throughout. That is why we recommend always mentioning financing verbally, at multiple steps throughout the patient's journey - from the initial phone call, to consultations, to scheduling. The phrasing is simple, "Are you familiar with how financing works?" or "Did you know we offer financing?"

It is also helpful to personalize the patient's financing message by using the Alphaeon Credit payment calculator and estimate how much the exact procedure or treatment will cost with financing. If you don't know the precise amount, offer a range of monthly payment amounts. "Usually, these procedures cost between $70-125 a month if you choose to finance it, or $3,000-$5,000 if you want to pay in full".

Another way to educate patients about financing is to send them a pre-qualification link before their consultation via email or text. Plus, patients who have financing secured usually show up for their appointments and often schedule on the same day.

In conclusion, if you ever caught yourself in one of these mindsets, we encourage you to consider an alternate view. We are confident that by doing so, you will likely find more patients will be able to move forward, and they will be happier because you helped make it happen!

How to Avoid and, if Necessary, Win Disputes

A conversation with Tina Jones, Concierge Dispute Manager for ALPHAEON CREDIT

Payment disputes happen. You work hard to make sure every patient is happy with their outcomes, but sometimes certain patients still aren't satisfied. And when that happens, they occasionally refuse to pay for their treatment and procedures. 

We sat down with Tina Jones, who handles the dispute process for ALPHAEON CREDIT to discuss how your practice can avoid disputes and be ready when they do occur.

Q: So why might a practice receive a dispute, and how does a patient submit one?

TJ: Typically, a dispute occurs when a patient receives a bill, and for some reason, they don't agree with the charge. Often, disputes arise when a patient is charged for surgery before services are rendered, so they're a little bit shocked when they get a bill in the mail for a procedure or treatment that hasn't been performed yet. 

When a dispute is filed, a patient will call into the bank and speak to one of the representatives. The patient will say, "I didn't have the service" or "I didn't agree to the cost" or "I should not have to pay this amount." At that point, the bank will open up a dispute case. 

Q: What happens next?

TJ: Initially, the bank will contact the practice directly through a secure email portal. They will ask for documents proving the patient agreed to the charges, such as a signed sales receipt. Sometimes, the office didn't refund a patient when they should have, and a refund is due minus any non-refundable fees. In those cases, the practice simply refunds the patient. (Note: It's still important to have those documents on hand, even when services were never rendered.) 

Q: What happens if the office doesn't respond?

TJ: A response is required within ten days, failure to do so can result in a chargeback. 

However, if the office doesn't respond initially or the issue is complicated, the bank will reach out to the team at ALPHAEON CREDIT to help get the dispute resolved within the ten-day window. 

If we get involved, ALPHAEON CREDIT acts as your concierge and guides you through the dispute process. We will walk you through the steps of either processing a refund or getting the correct documentation to avoid a chargeback. 

Q: So, how does a practice avoid chargebacks?

TJ: There's only two things that are needed to find in favor of the practice: a signed ALPHAEON CREDIT sales receipt and the patient's identification information (the type of ID, expiration date, and state-issued) written on the sales receipt or a photocopy of the patient's government-issued ID. 

Occasionally additional documentation will be requested, such as a copy of your cancelation policy or charges incurred by the practice before the patient's procedure or treatment. 

Q: Assuming the practice has those two documents, you find in the practice's favor 100% of the time?

TJ: In my experience, yes. If you have a cancelation policy or have non-refundable deposits, that's fine, we can find in your favor as long as the patient understood and agreed to those charges by signing the sales receipt. 

Q: So, the key to avoiding a chargeback is keeping track of those sales receipts and making sure the patient understands your practice's policies?

TJ: Correct. It's important that the patients understand what they're signing up for and your cancelation and refund policies. I should also mention that you need to keep those sales receipts for 72 months after the transaction. 

Q: How do you avoid disputes in the first place?

TJ: The best way is communicating clearly, verbally, and in writing with your patients. They must understand the exact amount that is being processed as well as when it will be processed. We know that offices require funds before surgery, and by all means, we want practices to receive the funds when they need them. But when patients start receiving bills before services are rendered, disputes increase. 

Q: Is that why you ask practices to avoid pre-funding more than 30 days before the procedure or treatment?

TJ: Prefunding is the leading cause of disputes. We ask that practices not process transactions more than 30 days before the procedure or treatment will occur.  

Q: How else can practices avoid disputes?

TJ: It's all about communicating with patients. Another issue we see is patients not understanding when their promotional periods end. They'll dispute that charge, saying they were unaware. Make sure patients understand that their promotional period starts immediately. For example, if they sign up for a 12-month deferred interest promotion, the patient must pay off the entire balance within exactly 12 months from the transaction date, or they will be charged interest even if their monthly statement has a different due date. 

Q: How does ALPHAEON CREDIT's dispute process differ from other patient financing companies?

TJ: The difference about ALPHAEON CREDIT's process is the concierge-level service you receive from our team when it comes to a dispute. Our bank isn't going to send an email or fax and chargeback your account without your knowledge. With ALPHAEON CREDIT, we're going to reach out to you with phone calls, emails, however, we can, to have that conversation about that patient and see what we can do to resolve the issue quickly and fairly for all involved.

When is the right time to share YOUR price?

Do you advertise your prices online? Should you? This was the question posted recently on the ShoutMD community by an ophthalmologist. And the survey says...

23% of physicians share pricing before speaking to a patient or having a consult today. Yet, many believe this is a trend that is becoming more popular especially among younger physicians and corporate owned providers.

So what are the pros and cons?

PROS

1. Reduces Sticker Shock and Keeps the Schedule Open for Qualified Patients

By posting your prices, patients come into consults educated and are less likely to experience sticker shock. This is especially true if others are advertising unrealistic prices in your market, such as $299 for LASIK. By sharing your prices, patients won't be surprised and are more likely to have begun to consider how to pay for the procedure such as with financing. For those unable or unwilling to pay, they are less likely to schedule a consult, come in, and say, "How much?...Hmm...I'll pass.". By letting them know your price in advance, you can keep your schedule filled with those that are prepared to pay. 

2. Differentiates Your Practice

If your prices are above or below the the norm for your market, advertising pricing can be a differentiator.

Right or wrong, when patients have limited information to compare like products and no existing relationships at any practices, they often turn to price first as a comparison tool.

Price can tell patients what type of practice you are. Are you a Neiman Marcus, Macy's, or Wal-Mart? There is a consumer for each of these retailers, and there is a patient for the high, middle, and low cost practice as well. 

Some patients will always be searching for the lowest priced provider. If this is you, advertise, but proceed with caution as lower prices can impact patient satisfaction. In a 2008 Stanford study, researchers applied electrical shocks to the wrists of participants before and after they received a placebo painkiller. Some participants received an "expensive" painkiller and others received a "low-priced" painkiller. 85% of those in the "expensive" pill sample group reported a reduction in pain from the shocks compared to 61% of those in the "low-priced" sample group^. If you are the lowest priced provider, be cognizant of this unconscious bias among patients to be less satisfied when they know they have paid less. 

On the flip side, if you are the highest priced provider in your market, patients may be apt to believe your practice is superior to other options for the same reason. In many markets, the physician charging the most isn't always the more experienced or educated, but often patients believe that he or she is due to their price points. Yet, being the highest priced provider also comes with a warning. Setting your price too far apart from the norm can backfire, as other studies have shown consumers have a “middle bias” or “edge aversion.” From multiple choice tests, to menus, to a selection of jams on a shelf, consumers tend to gravitate towards the middle choice as it feels the most safe*. In the end, being priced squarely in the middle might serve you best of all.

CONS

1. Reduces Call Volume and Consults

Almost every practice receives the “How much is X?” call on a regular basis. These "price calls" are always opportunities to redirect the conversation and help the patient understand what questions they should be asking (experience, education, outcomes) and to begin to establish a relationship. If you post prices, you run the risk of patients not calling at all as the only question they know to ask has already been answered.

2. Creates Unrealistic Expectations

In many scenarios, it may not be feasible to provide cost without first evaluating a patient. If the patient comes in and you determine they are a better candidate for another procedure or that their procedure will cost more, "anchor pricing" could prevent the patient from moving forward. “Anchor pricing” occurs when one price is provided, giving patients a starting point or “anchor”**. Moving forward, all other prices are compared to that initial number. For example, when scheduling a consult if a patient believes he will be paying $3,000 for a procedure because of advertised prices, but it’s later determined he or she would be served better by a $6,000 procedure, overcoming that $3,000 difference will be difficult. Had the "anchor price" started at $6,000 and ended up being $3,000, the patient would be more likely to move forward. 

In the end, regardless of the procedure or service, price plays a starring role. While the majority of practices still do not reveal pricing before speaking or meeting with a patient, there does appear to be a shift towards making it easier for the patient and sharing publicly. If you choose to post your prices online, remember the cost barrier doesn’t automatically disappear; it will still remain a concern to address, which is easily overcome by providing financing options. So if you list a procedure for $3,000, be sure to also mention the patient can finance the procedure for $73 a month or pay for the procedure over time with no interest. Calculate Monthly Payments

^https://www.gsb.stanford.edu/insights/behavioral-impact-higher-price

*https://www.psychologicalscience.org/publications/observer/obsonline/examining-the-mechanics-of-different-types-of-choice.html

**https://conversionxl.com/blog/pricing-experiments-you-might-not-know-but-can-learn-from/