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So far Extend Credit has created 38 blog entries.

Potential for Wellness Plans in Human Health Care

It’s no big secret that many private healthcare practices are struggling. According to a 2011 survey from CNN Money, half of all doctors in the nation operate a private practice, and many list reduced reimbursements, mounting drug costs, and changes in regulations as key factors hurting their profitability. While most physicians are more interested in helping patients than turning a profit, financial concerns may force them to turn away those in need of care. What’s worse, a practice forced to close its doors can leave a void of available healthcare in the community they once served. Even for those practicing on a larger scale, financial woes are hurting profitability, and preventing doctors from providing valuable care. Emergency room visits — often the only option for the uninsured or under-insured — have become a huge drain on regional hospitals. In a 2007 report, the Institute of Medicine described crowded emergency rooms as a “growing national crisis,” causing delay in patient care, ambulance diversions to other hospitals, and an inadequate capacity to handle sudden patient influxes from public health crises or other catastrophic events. Many patients crowding emergency rooms could instead be served proactively and preventatively at a doctor’s office or clinic, but once again, financial barriers limit access. What’s needed is a realistic way to grant access to these patients, while still providing a steady income stream for doctors. As we’ve examined in previous blog entries, providers in the veterinary space — such as Banfield Pet Hospital, with over 1 million pets on wellness plans — have used a membership model to great success. Pet owners get access to regular visits and preventative care at a price they can afford, leading to healthier pets and happier [...]

2016-10-29T16:36:44+00:008:44 am|

Paving the Way for Wellness Plans in the Dental Industry

In 2009, Dr. Dan Marut, DMD founded Quality Dental Plan – an Extend Credit Partner – out of his Dental practice in Ashland, Oregon. Dr. Marut’s motivations were simple: establish a way for dentists to reliably provide their services to patients without traditional insurance, through a system that is mutually beneficial to both parties “When people think of Dentistry, the first thing they think of is straight, white teeth. Unfortunately, the second thing they think of is cost,” says Dr. Marut. As a practicing dentist, Dr. Marut frequently witnessed the consequences of patients putting off dental care for financial reasons. For those without traditional insurance, the only alternatives to paying high, out-of-pocket costs for single dental visits are coupon programs such as dental discount cards. While these options may provide reduced rates on single procedures, they cause patients to “shop around” from dentist to dentist, providing little incentive to remain loyal to one provider. What’s more, even with the discount provided, patients still end up accessing each procedure at a cost similar to traditional insurance. “Let’s face it, anytime a third party is part of any economic transaction, their need to make a profit raises the costs and ultimately, the price of that economic model,” say’s Dr. Marut. “It is no different in healthcare or in our dental practices. On the other hand, Quality Dental Plan allows our dentists to offer savings to their patients, in part because the third party is eliminated, so the patient relationship stays between the dentist and patient — the way it should be.” By utilizing the QDP model, dental practices can offer membership programs to their patients at a rate competitive to dental discount cards and coupon programs. This grants the patient freer access to [...]

2017-01-18T17:54:07+00:008:45 am|

Wellness Plans: Leveraging the “Members-Only” Phenomenon

As we’ve discussed over the past two weeks, Veterinary practices across the country are employing Wellness Plans to increase office visits and customer loyalty, while ensuring consistent and personalized care for pet owners. The principle at the core of the Wellness model’s success is the strength of membership and loyalty programs, a concept tried and true in multiple industries. For a key example, we can look no further than the juggernaut of members-only-savings, Costco. In its nearly three decades in business, the success of the plus-sized wholesale chain is dwarfed only by the pallets of foodstuffs, appliances, and household items that line its aisles. By paying a small annual membership fee, consumers gain access to savings and benefits they wouldn’t find at any other retailer. Once they’ve committed to a membership (as 1 in 5 Americans have), consumers are consistently more likely to patronize Costco over competitors, and spend more freely due to the perceived savings afforded by the program. A 2007 Harvard Business School study referred to this phenomenon as the “fee-to-savings” link. Through field data research and a series of customized studies, they showed that fees can serve as a signal of price discounts. Stores that charge fees are perceived as offering better deals for identical items, and the presence of fees can increase consumer spending and overall store profitability. The study additionally showed that the presence of fees can drive choice of retail outlets, such that stores with membership fees are more popular even when they offer the same goods at the same prices as stores without fees. Furthermore, the loyalty that comes with a consumer’s commitment to a membership program carries benefits beyond that single member’s spending. A 2011 Colloquy Loyalty Census, entitled [...]

2017-01-18T17:56:01+00:008:46 am|

Customizing Wellness Plans: Convenience for the Consumer, Confidence for the Provider

Last week, we looked at how a budding Veterinary practice used Wellness Plans to offer reliable discounted services to pet owners, building a strong relationship with the community and creating the necessary customer loyalty to foster a robust first year in business. In today’s post, we’ll share how other providers are customizing Wellness Plan modules to provide a variety of convenient services to their customer base, while mitigating the risk of adding new features to their practice. As we discussed previously, a recent Bayer study found that financial obstacles often have a great influence on pet owners’ care decisions. While the flexibility afforded by Wellness Plans helped the young Vet in last week’s post generate customer loyalty in a lower-income demographic, discounted care is only the beginning. A well-established practice opening in the San Francisco Bay Area found that their more fiscally comfortable community was less concerned about cost, and more interested in quality, convenience and predictability in care. In this instance, the new practice found great success in offering pet specific, tailored plans to provide a full range of pet care services. Many successful Veterinary practices expand over time to incorporate other facilities — kennel space, in-house pharmacy, pet-care supplies, etc. — effectively becoming a “one-stop-shop” for pet owners. However, the risk associated with adding hard costs to the business can be daunting. Unsold pet food, expired medication, and empty kennel space can quickly add up to quarterly losses. The loyalty assured by Wellness Plans acts to mitigate the risks of opening up new features, ensuring consistency and predictable consumption of products and services. Offering all of these services in-house makes the decision easy for many pet owners, as going to their family Veterinarian for these services brings with [...]

2017-01-18T17:56:56+00:008:47 am|

Wellness Plans: Help Patients, Grow Your Business, Build Loyalty

Dr. J, a young Veterinarian, and her husband set out to build their own clinic early last year. While building a practice from the ground up – as opposed to buying one outright from another practitioner – can lead to a numerous rewards and a great deal of independence, it often comes with countless challenges. Like many entrepreneurial vets, dentists, and other practitioners before them, this young couple found their greatest challenge in building and maintaining a stable client base. Traditional marketing offered mixed results, and most promotional deals and coupons lead to single visits, but did little to increase loyalty. Furthermore, the many potential patients in their community found the cost of caring for their pets increasingly difficult to manage. According to the Bayer 2011 Veterinary Care Usage Study, pet owners overwhelmingly want quality veterinary care for their pets, but fiscal concerns often put price before loyalty. Many pet owners find themselves bouncing between lowest bidders for each procedure, instead of creating a lasting relationship with a particular doctor. In a community with mixed incomes, Dr. J needed a financial option that created customer loyalty, while ensuring pets got the care they needed. By employing a Wellness Plan module, they were able to meet these needs and create a comfortable financial base for their budding business. Already quite popular in the Veterinary space, Wellness Plans allow patients to select a monthly payment option and care plan directly through the provider. The young Vet was able to create a variety of care plans that fit the needs of her community: puppy plans, feline plans, senior plans, etc., each uniquely suited for the needs of different pets. By paying a moderate monthly fee –averaging $40 a month in the [...]

2017-01-18T17:58:39+00:008:49 am|

Introducing Our New Blog Series

After a brief summer hiatus, we’re back with more information on taking the financial future of your business back into your hands. We hope the past couple months have been as exciting for you as they've been for us. We’re continuing to build strong partnerships in the dental, veterinary and cosmetic fields; helping doctors all over the country integrate customized membership programs and in-house financing solutions. Over the next few weeks, we’ll bring you a series of blog posts highlighting the key factors in establishing prudent payment plan practices. Many doctors we've spoken to in recent months like the idea of making their own financing decisions, but are wary of the associated risk. And rightfully so. Offering payments plans to prospective patients can carry numerous rewards, but like any lending situation, risk is a factor. That’s why next week we’ll begin examining every step of the process, from establishing a financing program, to approving credit profiles, to handling missed payments. Along the way, we’ll discuss how doctors on our networks are utilizing automated payment plan software to streamline the entire process, saving administrative upkeep and maximizing returns. If you’re curious about providing more financing options to your patients, and thus increasing office visits and revenue, keep an eye on the blog for the next few weeks. And don’t be afraid to send us your questions and concerns about in-house financing programs.

2016-10-29T16:36:45+00:008:24 am|

Best Practices for Getting Paid

This is the fifth installment in our series, "Establishing Best Practices for Extending Credit in Today's Economy." In our previous blog posts, we discussed getting organized to offer credit to your customers, best practices for processing credit applications and creating credit agreements. In this blog post, we will focus on best practices for ensuring payment. Strategies for Getting Paid There are several common forms of payment that businesses accept." Cash is always a welcome form of payment, though a poor choice for debt repayment because of potential theft and control issues with staff." Accepting checks is also a poor payment method for debt repayment because of identity verification and NSF risks." However, it is a common approach for manually run payment plans." In these situations, the business obtains a series of checks from the customers representing the total number of payments to be made and then each month deposits one of the checks as payments come due." While this might seem like a simple approach, the risk can be high." Future checks could bounce and incur NSF fees for the business and cause collections issue." Also, the staff has to remember to deposit each check on time and keep the other checks secure from theft. Accepting credit or debit cards as payment are a more effective payment option, but carry a higher transaction cost for the business." Merchant fees associated with credit and debit cards can range from 1.5 percent to 6 percent of the transaction amount." Even under this approach, the business still needs to remember to process the payment each month and deal with failed payments due to expired credit cards or insufficient credit available." Most businesses know that manually reconciling credit card transactions is [...]

2016-10-29T16:36:45+00:008:36 am|

Best Practices for Handling Missed Payments and Defaults

This is the sixth installment in our series, "Establishing Best Practices for Extending Credit in Today's Economy." In our previous blog posts, we discussed getting organized to offer credit to your customers, best practices for processing credit applications and creating credit agreements, and ensuring payment. In this blog post, we will focus on best practices for handling missed payments and defaults. Strategies for Handling Missed Payments and Defaults While automating the payment process using electronic debit to a borrower's bank account greatly reduces the risk of payment default, missed payments still occur and can lead to loan defaults. So given that we followed best practices during the application process and are using automated payment processing, what steps are recommended for handling missed payments? Automated payments fail for a variety of reasons. Assuming payments are made via ACH, a payment may fail due to insufficient account funds a closed account . Generally, sending a payment reminder to the borrower prior to each payment due date will ward off these issues before they occur; but when they still happen, it is best to immediately contact the borrower to discuss the missed payment and agree upon corrective action such as an immediate payment to get back on track. Taking manual payments to correct a missed payment forces the issue with the borrower. They have to respond to your request by either coming into your office with a payment, authorizing an immediate debit of their bank account, or providing you with a credit card for payment. If they decline to correct the situation immediately by seeking a delay in payment or declining to honor the payment agreement, you know that you have a more serious potential default situation. Even in [...]

2016-10-29T16:36:45+00:008:13 am|

Creating New Payment Plans – Part 2

This is the fourth installment in our series, "Establishing Best Practices for Extending Credit in Today's Economy." In our previous blog post, we discussed strategies to consider in developing your customer credit program. One of these is deciding which procedures or types of transactions to include in the program and what types of customers will be eligible for credit. In this blog post, we will focus on the second part: deciding which types of customers will be eligible for credit. Strategies for Assessing Credit Risk When it comes to deciding who is eligible for extended payment terms and who is not, the decision should be based on a defined business strategy for offering credit and then on criteria that is consistently applied to all applicants. First, let’s discuss strategies for offering credit. A properly designed credit program serves a business purpose. This may be to stimulate sales, provide a financing option to customers, or supplement an outside financing program. Within the context of the business purpose, a decision should be made regarding how much credit risk is acceptable. For example, if the business purpose is to stimulate sales of a service, but stringent criteria are set for credit approval, the business may find a higher than desired percentage of applicants is declined. On the other hand, setting more lenient credit criteria may result in higher missed payments and bad debt situations. That said, it may be acceptable if the service is highly leveraged in terms of cost of sale, and the increased business volume generates additional profits that justify the bad debt dollar risk. Credit risk should be assessed based on the business purpose and should be well understood prior to commencing the program. The business [...]

2016-10-29T16:36:45+00:008:30 am|

Creating New Payment Plans – Part 1

This is the third in our series, "Establishing Best Practices for Extending Credit in Today's Economy". In our previous Best Practices’ blog post, we discussed the value of developing a written plan for extending credit and formalizing the credit process. As part of developing an overall strategy behind offering credit to your customers, you should decide which procedures or types of transactions to include in the program and what types of customers will be eligible for credit. In this blog post, we will focus on the first part: deciding which procedures or types of transactions to include in the program. Leveraged Transactions Leveraged transactions or procedures of all sizes are good candidates for selling on credit terms. Why? Because the fee you charge is high compared to the hard cost you incur to provide the service or procedure. Couple this with requiring a down payment and/or charging interest over the term of the payment plan, and lending risk can be minimized or eliminated, while growing the business and generating a high level of wealth creation for the owner(s). Let’s look at an example from the dental market and also compare this to the results you obtain using outside of third-party financing. To start, outside financing may seem attractive on the surface because the dentist gets paid immediately. If the need for immediate cash flow is critical to the dentist, an outside financing program is an option that should be considered. However, the dentist does take a discount on their fees and the lender will only approve certain patients. Also, only certain procedures are eligible for financing often at less than 100 percent financing. As a result, the dentist's revenue potential from the highly leveraged procedure is [...]

2016-10-29T16:36:45+00:008:15 am|