We surveyed 250 dental patients to understand the top factors that cause dental bill payment delays and, based on the findings, show you 5 tactics to boost your A/R collection rate by ~25%.
Please see below for the webinar transcript (not a perfect copy so our apologies!).
Welcome to a Pearly Practice Growth Webinar: Why Dental Patients Delay Payment and What You Can Do About It.
This is a question that we hear from practices all the time. It causes so much stress in the practice because team members are forced to work really hard to collect past due balances and it also impacts the business. When patients delay paying, it impacts practice cashflow and, if the balance is outstanding for too long, the practice needs to write it off or go ahead and send it to collections.
If you go to the Pearly Practice Growth Academy, you'll see a ton of research on AR benchmarking and what we consider excellent in terms of collection ratio and other metrics, but today we're going to dig more into the why.
After we dive into this, we're then going to use some of those insights to give you actionable tactics that your dental practice can use this week to get you paid more faster.
Let's dig into the survey.
We surveyed 250 dental patients across the United States. Here's a representation of the income and region breakdown. As you can see, we really tried to get a fair sample of the average American. You'll also see this age and gender breakdown. As you can see, it's fairly evenly distributed across age cohorts, as well as gender. And as you'll see later when we get into some of the specific factors, we'll do another cut of the data to look at folks that are 18 to 45 versus over 45, to see if there's any differences or any insights in terms of different demographic behavior and why they delay and what would encourage them to pay their bill faster.
So, first off we asked, "when's the last time you visited the dentist?"
Well, over half have visited their dentist in the past year, with 42% visiting in the last six months. Obviously there's a good chunk here, 23.6%, who haven't been to their dentist in two years. But again, what we're trying to do here is get a good sample of the patients that are regularly coming into your practice, as well as folks that may come in only every couple years.
Here's a good example of that 18 to 44 versus 45 plus age breakdown. You can see that, in general, the younger folks have not been in quite as much, but it's fairly evenly distributed.
Now, this is really the meat of the survey here, what factors prevent you from paying your dentist on time? So now we're pulling back the curtain and we're really asking these patients what has prevented them from paying their bill on time, and the number one was they cannot afford to pay it in full. Now, obviously this is going to be somewhat skewed by household income and different factors there, but 36% of the survey respondents noted that not being able to pay their full dental bill causes them to delay.
Next, there's a lot of confusion on what insurance is paying versus what they're responsible for. This is a good lesson in making it very clear to the patients up front, their responsibility versus insurance, and also letting them know that insurance may come back and pay less and they may need to owe more. We see this time and time again, and this is so important because patients may get a bill that they actually owe but may have assumed that insurance is paying it. What ends up happening is the bill sits on the desk, you end up writing that balance off and the patient is none the wiser. That's not a great way to run your practice.
The third, the 14%, which was surprising, was that a lot of folks said there's no convenient way to pay online. This makes sense, a lot of dental practices are still mailing out statements, requiring a check, or even if they have an online bill pay option, it's really clunky.
The fourth factor is the bill's confusing, which again, ask a family member or someone who's not in the dental industry, show them a statement and ask them to understand what's going on. Well, it's confusing. There may be procedure codes on there that the patient wasn't even aware it was processing or happening for them, or the bill is just so confusing that they have no idea what's going on. And when you confuse people, they drag their feet and don't pay.
The fifth one, which nearly 10% of the respondents noted was their number one factor in delaying payment was the lack of payment reminders. Maybe they got a bill in the mail, they put it aside, they never received an email, text, phone call letting them know the bill was even due. And as soon as the practice gives them a reminder, they're happy to pay.
Now we're going to look at the same factors here but broken down based on those age cohorts. So what was interesting is that 45 plus had almost double the concerns of being able to pay the bill in full. Now, when you get to that younger cohort, you can see that the younger 45 under was a lot more concerned about being unclear on what insurance covered versus what they paid. And as expected, the 18 to 44 year olds, they're delaying. 18% of them, their number one factor in delaying is because there's not a convenient way to pay online.
In addition, you see the bottom three being the number one factor for a significantly larger portion of the 18 to 44 year olds, including the bills being confusing and a lack of payment reminders.
So now that we have a good understanding of the last time that a patient got a dental bill, what was the number one thing that prevented them from paying on time? Then we asked our survey panel, what factors would actually help you pay your dental bill faster?
You have a bill, what are the ways that we can actually get those patients to pay it faster, increasing the cashflow for your practice and decreasing the stress on your team?
Well, the number one, which makes sense, is the option to pay their balance in installments. As you remember from the key factors that prevent them from paying their bill is they couldn't afford to pay it in full. So it's a pretty easy solution, allow them to break up their bill. There's a lot of different ways to do this, there's in-office financing, different things like that, but typically that conversation happens in the office. And maybe the patient thinks they could afford the full bill and the situation changes and then they get it and they can't pay, so offering that ability for the patient to say, "You know what? I can not pay in full, but I'm happy to pay over six months" or, "I'm happy to pay every two weeks over a two-month period to match my paycheck." Give them that option.
Nearly a quarter said if they could pay on their mobile device. So many practices we work with make it so difficult for patients to pay their bill that they don't or they delay. So allowing them when they're in line at the CVS to easily pay on their mobile device, that will significantly speed up the payments that your practice receives.
Get an easy to read bill, nearly 20%. Who doesn't want things to be more simple and to understand specifically the treatment that they received and why they owe this amount? So many practices we've talked to are amazing, their office is amazing, their marketing's amazing, their doctors are incredible, they provide an A+ experience for the patient, but then after when the bill comes, it's like we're in the 1950s. It's a paper statement, it's really confusing, and that's just such an area where you're letting the financial experience of your practice, your poor financial experience for your patients, detract from the amazing care that your dental practice is providing.
Don't let a poor patient financial experience detract from the amazing, quality care your practice provides.
Text message reminders, 17.5%. People respond to texts, people open texts compared to any other channel today, so allowing and encouraging patients to remind them that they have a bill due to your practice via text and then allowing them to take action on it is going to speed up that payment.
Also, an emerging area here is Apple Pay and Google Pay. This goes hand in hand with your phone that people have all of their details stored. You're just reducing friction. Similar to how Amazon makes it so easy to buy anything under the sun and get it delivered, reducing friction encourages consumer behavior. So if you make it easier for folks to pay their dental bill, they will.
Now, here's a little breakdown on that 18 to 44 versus 45 plus age cohort. As you can see, similar to the 45 plus had more concerns about not being able to afford the full bill and pay it at one time, they're going to pay faster if they're given more payment plan options. Mobile device, pretty similar, at this day and age. Five, 10 years ago, there was maybe some of the older folks did not have a smartphone or did not do everything on the phone. Now everyone does everything on their phone, and allowing them to pay on their mobile device is so critical.
Also, easy-to-read-bill. The younger cohort, this would help them pay faster relative to the older cohort. It makes sense, they maybe have not been going to the dentist as long, someone who's, let's say in their early 20s, have gone previously with their parents, maybe they never even paid the bill themselves and now they're confused. Nearly 20% of the 18 to 44 year olds would pay faster with text reminders. That makes sense, everyone's texting, but especially that younger generation.
Apple Pay and Google Pay, as you can see, it's still, I'd say, in the early stages, but more and more practices and more and more businesses are genuinely using digital wallets, Apple Pay, Google Pay, Microsoft Pay to accept and make payments faster. So giving that option, especially for the younger generation, they're going to pay faster if you give them those options.
So based on these survey results, I think it was instructive to get inside the minds of a dental patient, and it makes sense, "I got this bill, though I can't afford it." That's a pretty big reason why you're going to delay paying or not pay at all. "It's too difficult to pay, I have to go through too many steps and I don't understand why I owe this amount."
Like most people, you like money and you don't like spending money unnecessarily so again, making a difficult and unreadable bill is going to delay folks from paying. We've demonstrated this through the survey results and we see it in practice every day. So those are some of those themes and now let's dive in a little bit more to, well, how can you actually get paid more faster based on this?
So a little pitch for Pearly here, we're the dental financial engagement platform. Our product Pearly Pay helps you automate your patient accounts receivable collection process and really make that seamless, beautiful patient financial experience. So if you're doing everything right in your practice, unfortunately a lot of the ways in which that you are asking patients for money, sending statements, having your office manager or another team member make endless collection calls that's really annoying to the patients, we have a solution that helps you get paid more faster while improving the patient experience.
We integrate with your practice management system. Pearly pulls in all the patient and guarantor details, and we actually build up from the transaction data and create readable bills. Then our secret sauce is the optimized outreach. We're reaching patients on the right channel at the right time over a long period of time and give them, number three here, a frictionless checkout experience. Allowing them to pay in a variety of ways, including installments, including digital wallets, really bringing that financial experience of your dental practice on par to what consumers are used to in every other area of their life.
So let's talk about the key features of our platform that will help you address some of those factors that patients delay paying you. The first is installments. It's an amazing add on that you just enable them, you set the schedule and terms, you choose the patients that are eligible for installments and then right on their phone or right on their desktop they have the option to pay in full or pay you over time in installments. Now, you may have your own third-party financing or in-house financing, that's great too, this is just an option built into our platform. But regardless, you need to be offering patients the ability to pay over time so you can increase your collection rate.
The second key feature, which seems obvious, but the ability to pay on mobile. So we actually work with your practice to brand the experience so it looks and feels like you, but give you all that sophisticated frictionless technology that allows folks to pay easily on their phone, on their desktop, any device when they're in line at the Walgreens.
Next is easy-to-read bills. Because we're pulling in the transaction data, they can dig in and understand every procedure they've received, the amount, and then also if there's adjustments or there's insurance pending. We give it a beautiful, easy, readable experience that is automatically created through our software. Your practice doesn't need to go in and actually create the statements. It makes it easy for them to understand, including giving them an idea of where the insurance is pending or it's come back and here's the resulting balance. Again, they can look at this on their mobile phone, on their desktop. It's really a modern way versus a paper statement that's going to get lost and be confusing to read.
Reminders. Collecting payment is all about persistent but friendly reminders. The goal is to nudge them to pay and encourage action, but you don't want to ruin that patient experience by asking for money. Collection calls, threatening letters, things like that, that's going to damage the relationship between patient and practice. So we're able to send friendly text reminders. Importantly, your practice may already have the ability to send patients text messages and even reminders for bills, but are they actionable? What Pearly Pay allows them to do is click the link and pay on their phone, or if they've paid previously, their credit card is securely stored in our system and all they need to do is simply reply okay and they'll be paid right away.
Digital wallets. We talked about Google Pay and Apple Pay, that's an option here. We were talking with the practice in the bay area, so a little more let's say tech savvy patient base, but they have 33% of all patient payments are made through Apple Pay on the phone, either walking out of the office or when they're at home in the evening. So again, it's about reducing friction. More and more people are using digital wallets. They don't need to enter in all their card details. It's one simple click. Giving patients the ability to pull it up on their phone, say, pay with Apple Pay, done in a couple seconds. Versus receiving a paper statement, mailing back a check, or even getting a call from someone on your team, having to find their credit card, read it over the phone. Again, reducing friction empowers patients to pay faster.
Finally, what Pearly Pay allows your practice to see is a full insight into your total AR, your patient AR, and your insurance AR. You can then understand through our system, how many folks have actually paid through Pearly? How many folks are we prompting to pay? So that's they're getting our smart notifications at the right time and on the right channel and then end up calling your office to pay you directly. Or it's simply a friendly little reminder that they should send in that check for the statement that's been sitting their kitchen counter for months. So you get full insight into not only your AR, but how Pearly Pay is working for your practice and you can see the very large ROI on this, as well as the hours saved.
Some of the results for practices that have implemented Pearly Pay are incredible.
Practices are collecting more AR, they're reducing costs and they're reducing the average days past due of their balances because they're allowing patients to pay faster. We're doing automatic and consistent outreach in a way that a team member from your practice would never be able to do. And more qualitatively, we're reducing the worst part of some of your team members' jobs, which is making collection calls and sending statements.
We also take a high-tech and high-touch approach. So with everyone, we make sure that you're onboarded right, we give you best practices from what we've learned from thousands of patients and payments here, we give you an account manager, and then we also make sure that we're doing regular check-ins and we can track some of those benchmarks with your AR. So the beautiful part about our system is once you're up and running, your team is going to save a ton of time, you're going to collect more money and it's going to be very easy for you and most importantly, a vastly superior financial experience for your patients.
If you're interested in learning more about Pearly and/or best practices for tackling your dental practice's A/R, book a demo here.
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