Interest free patient finance proves interesting

Many dental practices in Australia have now signed up to offer their patients finance for dental treatment. Patient finance is a lower cost option for the patient (in some cases interest free) than paying with a credit card and can also act as an alternative to in-house payment plans offered by some dentists that are hellish to administer.

"We've gone through the start-up procedure and the training and a lot of patients are going for it," said Ms Osk Gunnarsdottir, practice manager at Abbey Dental Group in Rockingham, WA. "In the past, we'd been providing in-house payment plans and it took forever to administer these and chase-up payments.

"Now when we're asked if there are payment plans, we offer them CareCredit*. We'd tried using another system in the past, but we liked CareCredit because it will finance procedures as low as $500. They also offer interest free finance for 3, 6 or 12 months which patients like."

GE Money's CareCredit charges the practice a merchant fee for offering the interest free* finance service. The fee is 1% for 3 months; 4.5% for 6 months; and 8% for 12 months. Interest bearing options for 12, 24 and 36 months are also available at 2% merchant service fee and at interest rates more attractive than credit cards.

"We have nine patients who have been approved and are undergoing treatment at the moment," Ms Gunnarsdottir said. "Most of these have chosen the 3 and 6 month options and have financed between $1000 and $3000.

"There have also been 3 or 4 patients who've had finance declined and CareCredit recommend that if they decline a patient, then we shouldn't extend them credit either so we have heeded this advice."

CareCredit offers a 30 second approval process via a website so patients know instantly if they have been approved. There is also a fax back option that takes a couple of hours.

"We've been using CareCredit for a little over a month and it's fantastic," said Ms Julie Noble, practice manager at Booragoon Dental in WA. "It allows patients to get the treatment they want and need rather than a compromise. It's a big selling point for patients who want to have a lot of cosmetic work completed but is also welcomed by patients who need treatment unexpectedly such as a root canal.

"One of the advantages is that we get payment in a lump sum. It saves us the overhead of getting the money in dribs and drabs over many months. It limits our overheads and we no longer have to chase people for money. We get paid straight away.

"We've done about 12 cases so far ranging from between $500 and $10,000. Approval is pretty much instantaneous; we do it through their website and it comes back in about 30 seconds. We've had some people declined. If GE hasn't approved them, then you probably don't want to extend credit to them anyway. They are the type of people you would have to chase for money and we're not setup to do that.

"We're offering between 3 and 12 months interest free – which is much better than offering them credit. If we're selling complex work in the region of $10,000 then we are happy to have the money immediately with no overhead. We let patients choose between 3, 6 or 12 months and most people choose the latter.

"We generally present the treatment plan to the patient and if there is resistance due to price, we offer them CareCredit. As a general rule, we don't offer it because at the end of the day, we're out of pocket. However, if there is a hesitation over the price, we give them the option. You can read people and if they are really keen to have the work done but object to the price, that's when we offer it."

CareCredit offers dental practices several options and it is then up to the individual practice to choose which of these they then offer to patients.

"We were one of the trial practices for CareCredit and the patient response has been great," said Mrs Nicole Gerber, Administration Coordinator at Gerber Dental on the Gold Coast in Queensland. "Generally when you present three different treatment options to a patient, they will often choose option one or two because of the cost. But if you present CareCredit at the same time, they are now going for the more expensive treatment which is ultimately the best for them in the long term.

"We've put a dozen or more patients through in the last three months and in the last few weeks, we've been doing a lot. It took the staff a while to deal with discussing finance with patients but once they became aware they would get a good response from it, they became far more confident presenting it."

Gerber Dental offers 3 and 6 months interest free. According to Mrs Gerber, three months interest free costs the practice about the same as the patient using Mastercard or Visa and six months is similar to American Express.

"We also offer 12, 24 and 36 month extended payment options. These cost us virtually nothing and the interest rate is lower for the patients than credit cards. We have patients doing both. Quite a lot of patients have just retired and are using the 3-6 month options rather than touch their savings.

"The other thing is that it's a revolving line of credit. They may have their uppers done, pay it off and 12 months later have the lowers done. We've financed amounts from $1,000 to $18,000 and they will lend up to about $25,000 per person. Most of ours have been between $5,000 and $12,000.

"I believe that by offering CareCredit, we are helping patients accept the ideal treatment in full that previously may have been done over an extended period or very often not at all. We know patients are accepting treatment they wouldn't normally accept and that is good for our business."

"We've been using CareCredit for 3 or 4 months and it's fantastic," said Ms Leslie Ridley, a treatment coordinator at Accent Dental in Perth, WA. "The reason I say that is that as a treatment coordinator, I get to talk patients through their proposed treatment and I now have an attractive option to enable them to accept it more easily if cost is a problem. Now when we present a treatment plan, we can also present an option for payment as a matter of course and we're getting a great response from that."

Ms Ridley said seven patients have so far used the CareCredit facility, financing between $2,000 and $6,000. The practice gives patients the options of 3 or 6 months interest free. In addition, rather than offering the interest free 12-month option, the practice offers the CareCredit interest bearing extended payment plans of 12, 24 and 36 months.

"We believe offering patient finance will allow us to complete treatment that might never have been done or waited 12 months or more to see. It fast tracks the whole treatment process which is ultimately good for the patients. It also helps if you tell someone you have a finance option when they need a root canal and a crown and they weren't expecting it and have to come up with $2000.

"It's also important to us that the finance experience is a positive one for our patients. I've contacted all the patients who have been through it and I haven't had any negative response. They're all happy with the way it has been handled. This is good for the future as when they need more work done, they are already approved.

"We've had one knock back and that was from a patient who didn't think they would be approved anyway. All the other ones I have put through we expected to go through and they did."

"We started using CareCredit in March 2005 and we've found it to be a good move," said Vanessa Weymark, a dental assistant at Dr David Lee's practice in NSW. "We've had good support from GE Money integrating it into the practice. There were a few glitches in the early days and a few phone calls ensued, but we've now used the system three times and it's great to be able to offer it to patients."

Ms Weymark said that two of the procedures funded so far were for $2000 and one for $5000. The practice offers patients the option of 3, 6 or 12 months interest free and all patients have so far chosen the 12 month option. The practice doesn't pass any fees onto the patient for using the service.

"One of the advantages of CareCredit is that we get paid for lengthy treatment along the way rather than waiting until the treatment is complete. As an example, we do a lot of implants. When the implant is placed, we send a voucher to GE Money requesting payment for stage one of the treatment and they fax us to say the money is being transferred into our account less the merchant fee. When we complete the prosthetics, we then request the rest of the payment.

"We're very happy that we now don't have to chase the debts every week like we did before. Now when we're asked if we do payment plans, we just offer them CareCredit. It's worked out very well."

*Available to approved applicants. Conditions apply. Fees and charges are payable. Interest is payable after any interest free period. CareCredit is a credit facility provided by GE Finance Australasia Pty Ltd (ABN 88 000 015 485) trading as GE Money.