Patient Payment Plan ™ - Savings
Will the Patient Payment Plan™ make a difference for you with your patients in your practice? You can do a quick analysis of your numbers to see if it makes financial sense for you. First, find the Patient Payment Plan™ Lost Revenue Recovery Worksheet . This worksheet will only take a few minutes to fill out, and it doesn’t matter if you’ve got the exact numbers or not. The purpose of the worksheet is to give you an idea of where you stand… or more to the point, to show you how much money you may be throwing away by not participating in the Patient Payment Plan™.
You’ll notice on the Patient Payment Plan™ Lost Income Recovery Worksheet that there are four columns: columns one and two are an example of an average doctor not using the Patient Payment Plan™ in column 1, and then using the Patient Payment Plan™ in column number 2. Columns 3 and 4 are for you to fill in for your practice, again, first without the Patient Payment Plan™ in column 3, and then with the Patient Payment Plan™ in column number 4.
Look down the left side of the page at rows A through E. This is pretty straightforward; write how many outstanding accounts you have in row A, or in other words, how many people you have extended “in-house” financing to. In the example in column 1, the doctor has 125 credit accounts. In row B, write the average amount of outstanding money for those patients that you extend credit to. In the example, it’s $450. That means that 125 patients have an average of $450 each out on credit, for a total of $56,250. You’ll find that number in Row C.
Go ahead and write your numbers in column number 3. How many outstanding accounts do YOU have, and what’s the average amount? Write these numbers on rows A & B, then multiply those numbers and write that number in row C. That’s how much money YOU have out on credit.
Some doctors may be filling this out and saying, “Hey, I don’t extend credit to anybody, ever, for any reason.” That’s okay. If that’s true, then the bottom half of this worksheet is where you’ll see the real income potential. That’s where we talk about your ability to accept patients on credit with the Patient Payment Plan™ that you are now rejecting because you’ll have a high assurance that they’ll actually pay. But for now, write in how much money you’ve got out on loan to your patients, if any.
Now, in row D, write the percentage of accounts that won’t pay you. Remember, the national average is about 49%. You could be higher or lower. For the purpose of the example, we’ve used 40%. If you take 40 percent of the total outstanding money from row C, you’ll see that in the example, that comes out to a whopping $22,500. You might be thinking, “Well, $22,000 is a lot of money, but it’s not A TON of money.” That’s true, but the part that’s hard to swallow is that it’s money that you’ve already earned that you could easily be collecting if you were just on the Patient Payment Plan™. That’s money that you might as well be flushing down the toilet if you keep letting it go uncollected for months and years on end.
Now if you’ll look in column 2, you’ll see that we’ve taken the same doctor as in the example in column 1, but now we’ve added the benefits of his using the Patient Payment Plan™. You’ll notice that the numbers of outstanding accounts, and the amounts of money that’s outstanding (in rows A & B) hasn’t changed at all. But the big change is that the percentage of uncollectable accounts has dropped to just 5%. That is the statistical amount of fallout that our clients get. So now, only 5% of the $56,250 , or $2,813, is uncollectable when using the Patient Payment Plan™, a difference of $19,687 over not using it. Again, to emphasize a point: that’s money that goes straight to your bottom line.
Now Figure Your Own Numbers
So what about your numbers? You’ve already filled in your CURRENT numbers…now fill in your numbers and see what would happen if you did use the Patient Payment Plan™. Like in the example, your numbers would be the same for rows A, B, and C. But in column D, you’ll notice that we’ve taken the liberty to fill in the percentage of uncollectable accounts using the Patient Payment Plan™ with our clients’ average, which is 5%. Of course, realize, that percentage could actually be higher or lower. But for this example, multiply 5% by your total outstanding money is from row C. That will give you the amount of money that will be uncollectable when you use the Patient Payment Plan™. Now, in row F, write the difference in uncollectable money so you can see the real dollars you will be putting in your pocket using the Patient Payment Plan™. That’s how much money you’re throwing away right now….lost revenue that will be recovered for you automatically when you start using this program.
For the bottom part of the Lost Revenue Recovery Worksheet what we’re trying to discover is how much money you’re losing by not extending credit to your patients. Some doctors don’t extend credit to anyone, so the top part of the worksheet, which tracks uncollectable accounts, would not be applicable to those doctors. Likewise, some doctors very liberally extend credit to just about anyone, and therefore the BOTTOM half of this sheet would not be applicable to them. Or in other words, some doctors aren’t losing any money by rejecting credit risk patients because they don’t reject anyone. Chances are that you fit somewhere in between: you reject some credit risks and accept others. Regardless, use whichever portions of this worksheet are applicable to you.
So for the bottom part of the worksheet, here’s what we’re looking for: In row G, this is where you write in how many patients you reject every year due to credit risks. In the example, you’ll see, we’ve used a conservative number of 36, which is about 3 a month. Realize, we aren’t saying that this doctor will only reject 36 patients a year…it could be a lot higher than that even. What we’re saying is that he’s rejecting 36 patients who would have qualified under the Patient Payment Plan™. Your numbers could be more or less; that’s why we’ve provided space for you to write in your numbers in column 3. Notice that in column 2, the example of the doctor who is using the Patient Payment Plan™, the number of rejected patients is 0. Again, that number is zero because he’s not rejecting any patients that now qualify for the Patient Payment Plan™.
Row H is the average amount of money that the doctor bills each patient. This amount could include payments that the doctor would receive from the patient directly or from the patients’ insurance company. Remember, if you reject a patient, you’re forgoing any income from him, regardless of where the money originates from. So write in your numbers now…how many patients are you rejecting because of credit risks on Row G, and what does your average bill run…on Row H? In row I, you’ll calculate how much money you’re losing a year by rejecting these patients. Obviously, with Patient Payment Plan™, the amount of money lost is zero because you won’t lose any patients who qualify. So in Row J, your total increased revenue is very easy to calculate.
The final step in this worksheet is to add together the totals from row F and row J. This shows you the total amount of money you’re giving up by not using the Patient Payment Plan™. If you had difficulty using this worksheet, or if you have questions, you can contact your local representative .
But if you have filled out the worksheet, take a close look at the number in the bottom right-hand box on the page. That’s the amount of money you’re giving up. How much is it in your case? In the example, it was over $40,000… and that was using conservative numbers. Forty thousand dollars! That may or may not be a lot of money to you, but it’s money that’s just sitting there for the taking if you just get involved with the Patient Payment Plan™. Many of the doctors that run through this exercise find that they’re giving up well over a hundred thousand dollars a year! We’ve had some doctors find that their giving up more money than they’re currently making! So look at that number and see where you stand.
