We grow plastic surgery practices an average of 45% a year. For over a decade, Mentor Solutions has helped build successful, better managed and more profitable cosmetic practices. Learn more about our individual surgical practice consulting services.
Using Patient Financing to Grow Your Practice
By Marie Olesen, Executive Vice President, Mentor Solutions
Stephanie Gabriel, Mentor Solutions Regional Consultant
Does your practice want to grow cosmetic surgery revenue? Fortunately, third party patient financing has evolved to the point that it can easily help resolve financial concerns for both you and your patient.
Rather than spending more to attract new patients, look to the patients already in your reception area or your patient coordinator's database. Identify those patients who would schedule surgery if your practice took a more pro-active approach and helped them with their financing needs Patient financing is one of the most under-utilized strategies to stimulate cosmetic surgery growth. So many practices ignore patients who want to finance that patient financing offers a great market niche with fewer competitors. Proactively meeting the special needs of financing patients can give your practice a competitive edge.
Why don't more practices help patients who need financing? Unfortunately, there are a lot of myths about patient financing. If you buy into these myths, your practice may be ignoring significant revenue opportunities.
Myth #1: Fees by financing companies are so high that the surgery is no longer profitable.
If your practice offers both cosmetic and reconstructive services, you know that cosmetic surgery revenue is almost always better than reconstructive. If your practice collects 30% of billed reconstructive fees, that’s a 70% discount from cosmetic surgery fees. Even discounted cosmetic surgery can be 2-3 times better than reconstructive surgery. You can pay financing company fees and still do incredibly well.
If your practice invests in marketing to attract patients, then the issue becomes your “cost per lead”. We see practices that spend 7-15% of gross revenue on marketing to attract new patients who may or may not schedule. Meanwhile, spending a similar amount on financing assures you of a cosmetic surgery case. Think of patient financing as part of your investment strategy to grow your practice.
Even if you don’t market, patient financing is still a great option. As consultants, we review the discounting policies of hundreds of practices. It’s common to find discounts in the 10-25% range. So patient financing costs may be lower than the discounts you are already giving.
If you have unfilled surgical time, the answer is even clearer. Do you want to make nothing by refusing this patient or receive a discounted fee for the time slot? If you provide a great surgical outcome and wonderful patient experience, you'll retain the patient for future surgery and earn their referrals as well. That’s a great investment from any perspective.
Myth #2: Patients who want financing cannot afford surgery.
If we limit our practice to those patients who have $5,000-$25,000 in their savings accounts, we are eliminating most of the people in America. How many people do you know who pay cash when making a major elective purchase?
The desire to finance is quite normal in the U.S., especially for large ticket items. Our industry is making it difficult for such patients to proceed with surgery. With the proliferation of “No Interest” financing options for other discretionary purchases, savvy consumers come to our practices expecting similar offerings. If only one consult in ten took advantage of such a program, your practice would see significant growth.
Myth #3: It’s the patient's responsibility to get financing.
Our practices need surgical patients and should be proactively helping patients schedule surgery. Some patients need help with financing. Let’s use a car purchase analogy because financing is almost always involved. Can you imagine choosing a new car and having the dealership hand you several financing applications to take home, complete and bring back to the dealership? Never. They know they won’t sell the car unless they help you figure out how you are going to pay for it.
Another factor to consider is the cost of time and effort seeing patients who can’t have surgery without financing. From the first contact, your practice needs to determine if the patient requires financing and help them to pre-qualify prior to consultation.
Myth #4: All Financing Companies Are the Same
This is really a myth. As you consider your patient financing options, there are five factors to think about: approval rates, patient interest rates, fees to the practice, credit lines and easy processing.
Approval rates differ among the various patient financing companies. The same patient with the same credit rating may be approved by one company and denied by another. You want to choose a company that will partner with you as you work to grow your practice.
Patient interest rates vary by company and are a significant factor in the patient’s decision to buy. The more attractive the monthly payments, the better the interest terms, the more surgery you’ll do. Mentor’s attractive 12-18-24 Months No Interest Financing makes it easy for patients to say “yes” and schedule breast augmentation.
Fees to the practice also vary and can influence other factors. For instance, when you choose a financing company solely by their low discount rate, your choice may reduce the number of surgical cases you’ll do. Financing companies often offset their lower discounts to the practice by raising patient interest rates and/or decreasing approval rates.
Credit lines vary by company as well. You want a company that will approve enough for your practice’s most commonly financed procedure and ideally, enable the patient to add additional procedures. This is especially important for the patient coming for augmentation who actually needs breast lift surgery.
Easy processing is another critical factor. You want a company that is going to make the application and approval process as painless as possible not only for your patients but also for your staff. This means having a short application and quick approval process.
We’ve adapted Inform&Enhance® software to help you manage patient financing. You can apply electronically and quote fees both as a monthly payment as well as total cost.
Think Outside the Box
If you want to grow your practice, think outside the box. Patient financing can be a tremendous tool to maximize your cosmetic surgery revenue. From our consulting experience with hundreds of clients in highly-competitive markets, we know it works.
Financing becomes more than just a conversion tool; it can also attract new patients to your practice. Your practice will benefit from this new customer service approach and it won't hurt your bottom line either.
To learn more about our consulting services:
Articles by our consultants:
- Using Patient Financing to Grow Your Practice
- "Haste Makes Waste," but "Time is Money"
- "Spring Training" for Practice Growth
- The Five Deadly Sins of Medical Marketing
- Top Five Tips for Revenue Growth
For more information about our consulting services call us at 800-994-6367 or contact us online.
