Dr. Zuelke has advised doctors about credit management in their practices for over 22 years. There are 900 single-doctor practices that use Dr. Zuelke’s services across the United States. They have an average monthly collection of $121,000. They must be doing something right. That right thing is effective credit management. It’s not rocket science.

Here is the secret to effective credit management – identify credit risk and then grant credit proportional to the risk. That’s what every bank loan officer learns early in life. Of course you could control your delinquencies by writing them off. Dr. Zuelke watches this area carefully with the doctors using his services and allows them to write off one-half of 1% of their gross receipts for the month, no more. If you are writing off more than that, you are making mistakes somewhere.

If at a new patient exam you find that a parent is married, stable, and according to her credit report has never missed a payment, is it reasonable to offer all options for payment? These options would include:

• Payment in full with a 5% discount.
• 25% down and the balance paid in 18 months.
• Use Visa or MasterCard and pay the entire amount.
• Use a third party payment service like OFP or Dentcharge etc.

A person with this profile could also be offered more tailored payment options. Lets say her transmission went out in her car and she wanted to delay the start of her child’s case. If you have an opening in your schedule, you should make room for her child and accept delayed payment, because you know she will pay you. Delaying the start could result in her going to another practice. Now you’ve lost an "A" patient in your practice, the very ones you should be trying to start.

Don’t let money be a barrier to starting an "A" patient. If necessary, delay the start of the down payment or the first payment three months to keep this person in your practice. Do not do this without adequate information, however. Do a credit report, ask about how long someone has been employed and living in the same house to determine if the family is stable, has integrity, and keeps their promises.

Irrespective of the amount of money a family makes or doesn’t make, people who do not have integrity, and who do not fulfill their promises in life, are poor risks. Patients can be poor, and be offered a no-down payment option, if they fulfill their responsibilities. But, you, as the doctor, have to be willing to say "no" to those who will passively say "no" to you, through non-payment. You may choose not start them, or require a 50% down payment with a contract to pay the rest over half of the treatment time. Those families who have had problems paying in the past and now want to start their third child with a 10% down should be given tougher options, like 30% down. They’re not likely to leave the practice, though they might.

Another important point, avoid speaking to the parent or patient about a delinquent account at the treatment visit. You run the risk of creating a treatment problem as well as a collection problem. Do you think they will want to come in to see the Doctor again if they are constantly bombarded with their failures? Do proper collections instead. If you do so you will not have to use collection agencies, or small claims court or an attorney who skim any profit there is off of these accounts. Remember 83% of all malpractice claims come from those reported to these third party collectors.

Send monthly statements (current financial history even if payment is not due), not bills (money past due). Dr. Zuelke promised the audience that their delinquency rate will go down 10-20% if they send statements, not bills, every month to every patient regardless if they are paid in full, have insurance paying on the account, or a balance due. It will happen instantaneously, he promises. Use electronic statements when you can, as this is a wonderful embezzlement deterrent. Why all this extra work? Because it gives results.

Don’t start collection activity when an account is 30 days past due, by then they’re behind two payments. At J.C. Penny’s when you are one day late, they have already reported you to the credit bureau! It stays on your credit report for 7 years and there’s nothing you can do about it. They are aggressive, yet they don’t lose their customers. Customers who are past due in their accounts, stop shopping! That’s the worst thing, not the past due. Penny’s does not let people fall behind in paying because it saves the relationship and shopping continues in their stores. The same thing should apply in our practices. You should not let your patients fall behind in their responsibilities.

There is one other policy you should follow that will immediately eliminate a lot of headaches with collections. Do not split the contracts between parents in divorce cases. Period. Every once in a while you will lose a case but you must have an unconditional commitment to a high quality of life in your practice. You don’t have to start everybody that comes to you no matter what, to be successful. Start the patients who can contribute to you, the way you contribute to them. Families will refer other patients just like themselves. What type of patients do you want to deal with on a regular basis?

The average case acceptance rate of all orthodontists is 58-59% in the United States. If your case acceptance is damaged by 2%, is insignificant when you consider the profit these people bring to your practice. The highest case acceptance Dr. Zuelke has ever seen for a 12-month period is 81-82%, not counting Phase II starts (the AAO counts case starts this way as well). This occurs in only 10-12 practices across the United States. The single most important factor in profitable practices is high case acceptance.

There are many reasons to eliminate account delinquencies in the office that go beyond the immediate financial loss. One of the best things about running an office with no delinquent accounts is that parents bring their children into the office and don’t fail or cancel appointments out of embarrassment regarding their account. The number of emergency visits will drop as account delinquencies drop.

Dr. Zuelke concluded his talk with a quiz of complicated delinquency questions. If you would like a copy, or have in-depth questions, contact Dr. Zuelke. In conclusion, get control of your account delinquencies in the office and you will improve the quality of your practice life, guaranteed!

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