Lesley Turner shares three key rules that you need to stick to when it comes to offering patient finance…
Patient finance is a great way to help more of your patients say yes to the treatment they want.
It can also bring big benefits to your business by helping to improve cash flow and giving you a competitive edge over other practices who don’t offer it.
As it’s a financial service, there are rules and regulations around what you can and can’t do when it comes to the way you offer patient finance.
They’re straightforward and easy to stick to, but worth knowing about so you can make sure that you’re doing everything you’re supposed to.
Below are three golden rules you must obey when it comes to providing patient finance.
Rule 1: You can’t use two-tier pricing
Two-tier pricing means providing a service, such as dental treatment, at different prices depending on the method of payment.
For example, you can’t offer patients a discount on a treatment if they pay up front and not offer that same discount if they pay for it on finance.
That would be a breach of regulations because the final price for any treatment has to be the same.
You can offer discounts, but they need to be applied across the board. If there’s a discount for the upfront cost, then you have to offer that on the finance option too.
Rule 2: Subsidy charges shouldn’t be passed to the patient
As the business providing the finance option, it’s your responsibility to pay any subsidy charges or administration fees.
By offering patient finance, the practice typically acts as a credit broker. As such, passing on subsidy charges would not align to the practice’s regulatory permissions.
Without the correct permissions and the correct loan documentation showing any associated cost to the loan, passing the subsidy cost onto the loan applicant would put you in breach of Financial Conduct Authority rules.
You just need to treat finance costs as an overall cost of doing business in the same way as you would rent or utilities and ensure that your overall pricing reflects your cost base.
Fortunately, our lender is our sister company, Wesleyan Bank, who enable us to provide you with some of the lowest subsidy rates on the market.
Rule 3: Avoid advice and stick to the facts
It’s really important that you don’t offer what could be seen by some as advice or guidance when talking about finance.
This kind of advice can only be given by people who have the relevant regulatory permissions or qualifications to give guidance on products.
However, you can talk facts. And by sticking to factual information about your finance options, you can still be helpful to your patients without breaking any rules.
Below is a quick checklist of the things that you can’t offer advice on:
- You can’t suggest patients obtain a loan or a credit card elsewhere
- You can’t provide details of any other loan or credit card options
- You can’t make suggestions based on personal preference, for example, suggesting a patient should go longer term on a loan because of lower monthly amounts or because it would be more affordable for them
- You can’t provide advice even if a patient requests it.
Patient finance can be a great addition to the services you provide. To make sure you reap the maximum rewards, it’s key to understand the rules around what you can and can’t do.
If you’re a Medenta customer and would like some refresher training in this area or you’re thinking of introducing patient finance and would like some more information, contact our team.