Reducing Bad Debt at Your Chiropractic Practice
Bad debt is a common pain point for chiropractic practices. Patients who don’t pay their bills or pay late can quickly have a negative impact on your chiropractic practice’s financial health and make it difficult to stay financially healthy.
Patients not paying bills is becoming a larger problem among all practices, including chiropractic businesses. For example, bad debt had increased by $617 million to almost $56.5 billion between 2015 and 2018. Larger copayments and high deductibles are making it harder for clients to keep up with their portion of the bills. In fact, deductibles and out-of-pocket maximums have risen by almost 30% since 2015. A study by TransUnion found that patient balances after insurance adjudication grew by over 53% between 2012 and 2019 – from 8% of the total bill amount to over 12%.
Chiropractic patients are paying a growing portion of their medical bills, but how can you help them manage rising costs and reduce bad debt risk? Simplified payment tools, chiropractic financing options, and patient engagement strategies offer the key to helping people successfully manage increased out-of-pocket medical expenses.
Modernizing Payment Options to Collect Faster
Modernizing payment options helps you collect payments faster. Nearly 7 in 10 adults in the United States own a smartphone and many want to use their devices to pay for services. Mobile payments are already widespread, with 46% of U.S. consumers reporting that they recently made a mobile payment. Offering mobile payments allows you to collect debt faster and in the following ways.
- Collect payments at the time of service. Waiting for payments can quickly cripple your practice’s cash flow. Instead, you can send patients an email or text that allows them to pay directly from their phones at the time of chiropractic treatment. This allows you to quickly reduce receivables by collecting more revenue upfront.
- Encourage patients to sign up for payment plans. Patients need your services but many have trouble figuring out how to pay. Talk about expenses upfront and empower patients to sign up for flexible payment options. Plans can be set up on mobile devices to simplify the process and make establishing a payment plan easier.
- Provide “card on file” technology. Chiropractic patients are already using “card on file” technology in a variety of sectors, everything from shopping online to ordering food and groceries. Allow people the option of saving a card to authorize automatic payments after insurance adjudication. This helps to prevent delays in getting paid and infuses your practice with revenue upfront.
- Interactive voice response. Simplify payments and allow patients the option of selecting a different language with interactive voice response. This gives your clinic’s patients an additional option of quickly paying bills.
Modernizing payment options allows patients to pay bills faster and decreases receivables and risk for bad debt. At the same time, it allows you to reach people who can’t afford to pay their bills faster. These patients can get instant access to chiropractic care financing options and set up a plan to manage their financial responsibility.
Offering Patient Financing
Patients aren’t paying their bills for a variety of reasons, such as misunderstandings about the balance owed, insurance payment discrepancies or the inability to pay the bill in full. Affordability is an issue during a time of rising copayments and deductibles, and little patient savings to foot the expenses. Many patients worry they can’t afford a medical bill of $1,000 or less.
One recent survey found that 77% of health care consumers say that it’s “important” to “very important” to know costs prior to treatment. What’s more, over half (53%) want to know their financing options before they receive treatment. Allowing patients to understand the cost upfront and discussing payment options can help you reduce bad debt. Payment options can include:
- Providing flexible payment terms. Every patient’s situation is different. Some patients can afford a $50 monthly payment, while others are stretched to find an extra $20 in their budget. Flexible payment options allow patients to customize financing based on their unique circumstances. This helps to create greater satisfaction with your practice because patients feel supported and understood.
- Automating payments. The best way to get paid faster is to automate payments. Get rid of the worry that comes with waiting for inconsistent and late monthly payments and instead receive timely payments each month. Predictable income allows your chiropractic practice to grow, thrive and serve more patients.
- Including more of your patients. Some of your patients might have credit history challenges and not all financing options will extend options to these patients. In fact, estimates suggest that 30% of Americans have poor credit. Select a partner that enables you to provide financing to 100% of your patients. This allows you to open your doors to more patients who need chiropractic care.
- Getting paid on receivables. Select a financing program that offers the flexibility of getting paid upfront on receivables. For example, a patient might sign up for a six-month payment plan. Instead of waiting the full six months to receive all payments, you can get paid upfront on receivables. Having this option can quickly increase cash flow in your practice.
- Enabling faster technology payments. A payment plan should use the same technology that your patients are using, such as smartphones and tablets. Patients should have the flexibility of logging on using their devices or at their home computers to make fast and easy payments on their accounts. This allows you to get paid faster and improves the patient experience.
Chiropractic patient financing is a powerful tool for reducing bad debt, but it’s important to have conversations about payment early. Additionally, it’s critical to engage with patients throughout all steps in their journey. Creating a patient engagement strategy with the right technology can help you better connect with patients, anticipate their needs, and get paid faster.
Deploying Patient Engagement Tools
In addition to reducing the risk of bad debt, patient financing can also help you engage and retain patients. One survey found that overall, 29% of those surveyed reported they would move to a different chiropractic practice if they were offered “attractive payment programs.” This is especially true of millennials, where 40% said they would be “very likely” or “likely” to switch providers if a competitor offered low or zero interest financing on medical bills.
Keeping patients engaged is critical to patient retention and encourages positive word-of-mouth marketing for your chiropractic business. Ongoing communication along the patient journey can also help with avoiding bad debt. Strategically timed communications help reduce the risk for bad debt, maintain connections to clients and provide ongoing resources that assist patients with planning for care.
For example, a patient might have an unexpected bill and feel unsure of how to pay the balance. At that time, the patient should receive a friendly text message or email reminding them of flexible payment options and encouraging them to sign up from their mobile device. Additionally, customers should have 24/7 account access online to pay outstanding bills or make payment plan installments. The right technology can provide:
- Fast access to account details.
- 24/7 availability to view account information.
- The ability to start a payment plan.
Find a program that is fully integrated and allows you to engage with patients using the technology they enjoy most. This will help you grow your practice and provide positive patient outcomes.
Moving Into The Future With Greater Financial Health
Chiropractors are dedicated to helping patients get access to the services required to solve their health challenges. Bad debt isn’t good for practices, but it’s also not good for patients. The financial stress of not being able to pay a bill or feeling confused about what is owed can cause unnecessary worry in the lives of patients.
Creating partnerships with patients to ease these burdens by providing the right tools to make paying for chiropractic medicine more manageable. When patients know the upfront cost of care, they can figure out the best way to pay, tap into patient financing if funds are tight, and finish the recommended course of treatment. Using technology and the right partner can help support these experiences and create more meaningful relationships with your clinic’s patients as well as grow your practice.