Tips for setting up dental patient financing, different options, and different benefits

Tips for setting up dental patient financing, different options for payment plans, and their benefits

Dental care can be expensive, especially for procedures that aren’t fully covered by insurance.

To make it more affordable and accessible for patients, many dental practices will offer different financing options.

Usually, these financing options fall into two categories : third party financing or in-house financing. Both approaches have benefits for the patients and the dental practices.

Third party financing options

Many dental offices partner with third party financing companies that specialize in healthcare lending.

There are many different companies out there, such as CareCredit and others.

These companies offer credit cards or loans that are specifically designed for healthcare expenses.
And the key features include a quick application and approval process, which often takes just a few minutes, with no upfront cost for patients.

Flexible payment terms could be six months to 60 months. It could be low or no interest on the terms and it could have high credit limits.

How third-party financing works

The dental office will sign up as the provider for the financing company, and then patients apply for the credit, usually right in the dental office.

If they’re approved, the patient can use the credit line to pay for treatment.

The dental practice receives the payment from the financing company pretty quickly, and then the patient repays the financing company over time.

Benefits of third-party financing for patients

The benefits for the third-party financing for the patients includes:

it allows the patients to get the treatment needed more quickly.
it spreads their cost out over time.
with fixed monthly payments, it can be low interest or no interest.
it keeps the cost separate from other credit cards or loans,
it can be used for future dental needs once the balance is paid off.

Benefits of third-party financing for the dental practice

The benefits for the dental practice include:

it helps patient case acceptance rates.
it helps to improve the cash flow with a quick payment from the financing company.
it reduces the accounts receivable and the billing collection work internally.
there’s no financial risk if the patient defaults on the payments because there’s no recourse. The money comes from the third-party financer.

In-house financing options

Sometimes an office may want to offer in-house financing options.

Some dental practices choose to offer their own in-house payment plans rather than partnering with a third-party company.

And this typically involves the practice setting up customized payment plans for the patients using automated billing software or patients making monthly payments directly to the dental office.

The dental office manages and bills and collects internally.

A traditional model

So one type of in-house financing is the traditional model. The practice manages the entire process internally from applications to collections.

The hybrid model

The practice partners with the company to help administer the program while still offering direct financing.

The benefits of in-house financing for patients

The benefit of in-house financing for patients is it may be easier to qualify compared to third party options. There are different customized payment plans that are tailored to the patient’s budget.

There’s a direct relationship with the dental office for payments and potentially lower fees and interest rates for the office than the third-party financing.

Third party financing can have a higher fee for the practice to pay, especially if it’s a no interest program for the patient.

Benefits of in-house financing for the dental practice

The benefits for the dental practice include having complete control over financing terms and approvals builds a stronger relationship with the patient.

There is also the potential to earn interest on the patient payments and there are no fees paid to the third-party financing companies.

Comparing third-party with in-house

So when you compare the third party versus the in-house, the third party financing has:

quick approvals
no financial risk to the practice
less administrative work
potential for higher fees and rates
limited control over terms

In-house financing has:

more flexibility and approvals.
practice assumes the financial risk.
more internal administration required
potential for lower fees and rates
full control over the financing terms.

Key benefits of offering patient financing

The key benefits of offering patient financing, regardless of the specific approach, offering financing helps provide several benefits for patients.

It makes dental care more affordable and accessible, and allows patients to get needed treatment without delay.

It provides budget friendly payment options, reduces financial stress for the dental expenses, may enable the patients to afford higher quality materials and procedures.

For the dental practices, it increases treatment acceptance rates, improves cashflow and financial stability. It also attracts new patients seeking financing options, enhances patient satisfaction and loyalty.

It allows practices to perform more high value procedures, reduces accounts receivable and collections.