FAQ
Q: Couldn't I do this myself within my own practice? Why do I need CDF?
A: You could absolutely do this by yourself. It would be time intensive and cost more than what it takes to join CDF’s program. More importantly, it would take you away from what you do best, “treat patients.” CDF has already gone to the effort and expense to develop the ideal model. To examine a few of the benefits of joining the CDF program, see Member Benefits.
Q. What is a leveraged procedure?
A: In the CDF business model, “Leverage” means the fee you charge is high compared to the hard costs you incur to provide the treatment. A leveraged procedure has low hard costs compared to the fee charged for the procedure.
Q: How do I share this with my CPA? Is there any special kind of accounting that I will have to deal with?
A: CDF does the monthly accounting for you. You will receive a monthly financial statement. Your accountant will simply incorporate this information into the annual tax return for your practice.
Q: What if my office is interested in extending financing using the CDF business model to other patients too. What do I tell them?
A. Patients who are not interested in or do not need extensive treatment or services that are highly leveraged create a larger financial risk to your practice. CDF will help you establish a set of parameters for your staff to follow which include highly leveraged procedures with a minimum price requirement. Any patient treatment plan that falls outside the established parameters should be sent to outside finance companies who are set up to handle that risk.
Q: What if my goal is three patients per month and I have ten patients that qualify?
A: Schedule three patients for the first month, then monitor your practice productivity and collections. If you are on track, then you could work additional patients into your schedule—or simply schedule them for the following month.
Q: What if I’m a non-working owner of the practice?
A: You can still set up the CDF business model and have the services provided by an associate. There are opportunities to be creative in this situation. For example, put the associate on a flat salary and finance the qualifying leveraged procedures they perform. For qualifying procedures you could also pay the associate using a deferred compensation model and you could retain a set percentage of the revenue and interest (perhaps a 25%-30% share). CDF’s goal is to help you determine what is best for your individual practice.
Q: How will this affect my staff bonus, current practice overhead, practice management software and accounting?
A. CDF will provide online training for you and your staff. CDF also has consultants available to work with you one on one.
Q: CareCredit® offers zero percent financing for patients. Wouldn't my patients rather use CareCredit® or their own Credit Card if it is lower interest?
A: Only 30-50% of your patients are approved for outside financing and if they are approved it is often for less than the entire treatment. For example: a patient needs seven onlays and crowns yet CareCredit® approves the patient for $2,000. Now you will have the opportunity to set the patient up for 60-month financing at a monthly payment they can afford which is what most Americans are concerned about. In other words, most patients don't care if their treatment is $7,000 at 18% interest or $10,655 at zero percent interest. They just want to know their payment is $177.50 per month and that they can prepay at any time with no penalty.
Q: Wouldn't I still be better off taking cash up front from CareCredit® and not taking any risk?
A. It’s amazing that as doctors we are often willing to take a 10% discount in our fees which happens to be 28% of our profit (based on national average overhead of 73%). Banks and finance companies take huge risks yet make massive amounts of revenue. There are bank branches on every corner. Who pays for that? Interest from consumer loans!! To look at this further, outside financing will discount your fees and give you cash up front. They can only approve certain patients. They put up $9,000 (10% discount on $10,000 treatment) so they can get paper owed to them of $10,000 plus any interest. That is a risk!! A dentist can provide a highly leveraged procedure with hard costs of $250-$750 and a couple hours of time to create $10,000 in paper plus interest. The interest earned by the provider reduces the risk drastically! At 18% interest 1 out of 3 patients could not make even one payment and the dentist would still receive the full fee for all 3 procedures. Example: 3 patients each receive $10,000 in treatment. Patient payments over 60 months with 18% interest would equal $15,236. Two patients’ payments would equal $30,742 which is actually more than if all three had paid you with no interest! Remember, in all likelihood you would have only have received $27,000 from outside financing and if all three of your patients pay you with interest you receive $45,708. Who wins the game? The outside finance company put up $27,000 and you as the dentist only put up some time and $750-$2,250 to receive $45,708!
Q. Can I offer in-house financing to patients based on the CDF business model to patients with insurance and not offer it to patients without insurance?
A. You probably already know that the answer to this question is “No”; however, it really doesn’t matter if your patient has insurance or not. The CDF model is about financial leverage and time leverage.
Q. Is the Bank account in my name and completely under my control?
A. Absolutely. Payments received from in-house financing based on the CDF business model go into your account minus fees owed to CDF. Once the funds are in your account they are 100% yours to do with as you please. If you are interested, CDF is available to introduce you to an incredible concept that will allow you to work towards the goal of being your own bank!!