Reduce the Friction TO GET PAID with Dr. Dwight Peccora

The following transcription was from the Bulletproof Youtube channel. Here is the https://www.youtube.com/watch?v=caQd1Dd5EtI

Peter Boulden
0:00:00
Well, welcome to the Bulletproof practice today. I've got my buddy and one of the longest standing Bulletproofers in the nation. Dwight, the Cora, many of you know him.

Dwight Peccora
0:00:23
What's up?

Peter Boulden
0:00:24
Coming to us live from Fort Bend.

Dwight Peccora
0:00:26
Yes, yes.

Dwight Peccora
0:00:28
Showmaker from Houston.

Peter Boulden
0:00:28
Wait, Fort Bend Dental, are you in the Fort Bend Dental offices as of right now?

Dwight Peccora
0:00:31
I am, I am. This morning I'm actually at the Missouri City location, so I'm just hanging out here and enjoying it.

Peter Boulden
0:00:37
Good deal, good deal. Dwight, those of you who don't know Dwight, he is, you know, I always say Dwight and I are kind of like a kindred spirit, and he's big into data, big into analytics, big into processes, big into all the things. And so, you know, he is, I always say, if me and Craig are yin and yang, I think Dwight and I are both yings. Because we kind of share that same process of our brain. What we're gonna be talking about today, Dwight, is interesting. I think it's at the right time, because as we've all been watching the headlines on the news and the economy and recession and everything falling down, I think it's more important than ever now to have options for patients. As a matter of fact, I had kind of an emergency meeting with my team, the directors on my team, and in a bull market, when the stock market is doing well, everyone feels quote unquote rich on paper. And when you feel rich on paper, you spend commensurate to that. And when I say that is our patients, right? So bigger treatment cases are easier to enroll when someone quote unquote feels, the market's been on fire, I'm feeling really well, let me just go ahead and pay for this case, okay? When that shifts, and for those of you who were around in 2009, if we are entering into that period like that, 2009, which is a mortgage-backed financial crisis, I don't think it'll be that bad. Who knows, you know, with the regulatory environment, with inflation, with all the things. Is that the game changed a little bit, right? And Dwight, I don't know, when did you actually, were you out, were you practicing at that time?

Dwight Peccora
0:02:21
So I graduated from Dell School in 2010. So I was in business school that time.

Peter Boulden
0:02:24
2010, so you got out right in the middle of the shit storm. Yeah. And so you have the wounds to kind of remember that. That was actually ironically one of the inflection points of when I migrated the practice from being a boutique practice to like all cosmetic to really trifurcating it into, if that's a word, into surgical, cosmetic, and restorative. Because I learned that I was like, this is not very good. All right so where I was going with that line of thought though Dwight was that in a bull market when everyone looks like a genius you can't not enroll cases like you know practices do well because the kids because the world around the skills everybody does well. When things get tough or when enrollment gets tough what you don't want to do is slide over something to someone and say, hey, it's going to be $17,000, and then look at them blankly in the face and say, OK, you want to put that in your credit card? And the answer is no. I don't want to put anything on my credit card. I don't want to pay for it in cash. I don't want to put anything on my credit card. So in this era, I think it becomes more important to present treatment in monthly truncheons. and monthly tranches, right? We live in where we buy cars that way, we buy Netflix that way, we, you know, even some of our, I mean, look, it's a monthly subscription-based economy. Yeah, yeah. So, you know, obviously we know of the care credits

Peter Boulden
0:03:57
of the world, right?

Peter Boulden
0:03:58
Where they act as the intermediary, they take the risk from the lending perspective, or the patient, I'm sorry, a service fee, they charge us a service fee, and they act as the intermediary in that equation.

Dwight Peccora
0:04:11
Right.

Peter Boulden
0:04:12
I want you, because you and I, before I hit record, started talking so much about how much kind of assets under management you have with something called Compassionate. And I know it's something that Craig uses a lot of, it's something that we have an account of, and I think you're probably the winner in terms of our little ecosystem of how much kind of assets you have under management with them. And so where I want to go with this, Dwight, is kind of give an overview of background of you and your practice, right? And then what made you get into using this, using Compassionate versus just the traditional, I'll just keep it easy and let like the care credits or lending tree or whatever, not lending tree, but a lending club of the world take over. So sorry for that long diatribe intro kind of context, but I think it's important.

Dwight Peccora
0:05:01
No, it's good.

Dwight Peccora
0:05:02
I mean, it's the reason why this is pertinent now. I think many times, you know, even in my situation where I have a bit of a hub and spoke type model, one central main facility, we're in southwest side of Houston, and we have some remote locations as well that all are feeders in. So we're PPO, I would say 70, actually 60% PPO, and the rest is feed for service, is great and wonderful. But we deal with a lot of the insurance backlog as well, and things that come along. So you've got to figure it out in the sense that our businesses are good and healthy, until, especially in bull markets, everybody's running a great business. And then all of a sudden you realize, oh, I got to go dot my I's and cross my T's and make sure you know how to collect this money and make sure that it's done right. And the method to collect that money is not go to what's always been tried and true, because I think it's vastly changed generationally as to what is, how people want to catch up. You know what people don't want to do? They don't want to receive something in their mailbox that says they owe a bill. That's like icky now, and even my generation, I'm considered old millennial, right? Organ trail millennial, as they call us. And I don't want to get that, but if I get a text message, which I do if I go to the emergency room or I go see my doctor or I go in anything in healthcare, or really at this point in time, just paying for the average things, you get the offer to be able to pay for it over time or pay it immediately or pay off your bill via tax. So what we did was we were saying, how do we reduce the friction? Which if you've been involved at all or listened to the pod at all, that's the starting to

Dwight Peccora
0:06:37
do things.

Dwight Peccora
0:06:38
Reduce the friction, reduce the friction, because that's what makes people want to say, absolutely, I'm going to just take care of that.

Peter Boulden
0:06:46
Right. Like the statements, Dwight, I think that's good to pause in. And if you haven't listened to that episode, we talk about reduce the friction, which is good from a payment perspective, which is important, right? That's the lifeblood of our business. And I think we stop and say, when you send out statements, it's usually that it's not that people are unwilling to pay. It's that they don't have checks, or they don't have stamps, or they forget, right? So like reduce the friction and get people to pay with, like you said, Dwight, the text messaging. So proceed.

Dwight Peccora
0:07:11
And that's where I think we had some floating up AR that happened early on in the practice that I noticed, especially coming out after some of that, you know, the downturn of the economy, we started paying attention to it. And then individuals like when we were at the Terranea summit, there was a big discussion about some of this checking up on some of this AR. And that some of the AR was not that your team was on the phone, not calling, not doing what they need to do, is that it was, there was too much friction for the payment. And so that's when we really got in and figured out that Abella was one of those methods that we really started to say, okay, well, let's double down and let's use this

Dwight Peccora
0:07:52
and let's figure that out.

Dwight Peccora
0:07:53
And so that's really-

Peter Boulden
0:07:54
So Abella is what, Dwight? Like what is, so Abella and Compassion are kissing cousins,

Dwight Peccora
0:08:00
right? Two separate components.

Dwight Peccora
0:08:00
Yeah, two separate components. So the first thing is Abella. Abella is more AR management, so it goes in what it really does is it makes sure that it takes whatever existing AR you have, it basically sits on top of your system and it sends out requests via text message to the individuals and it gives them the option to go ahead and pay that off. And whether it's thousands of dollars or whether it's a few dollars, they don't just pay it off because they hit the text message, it gives them the option to immediately say, well, I wanna pay this off, but I wanna pay it off in 20, 50, $100 increments or whatever to get it collected over time. And so it's essentially creating a payment strategy over time that's made it more effective for people to be like, okay, yeah, I didn't wanna pay $4,000, but I'm able to pay it out over time and collect it over time, and it's more likely for those people to actually.

Peter Boulden
0:08:52
So this would be for someone I don't use it because I'm in a fee for service practice, so I don't use it Bella, but this would be someone that has maybe a large balance of accounts receivable.

Dwight Peccora
0:09:01
Right.

Peter Boulden
0:09:02
And then you would inactivate this service and then it could then go after and get people options, reducing the friction like we just mentioned. Okay.

Dwight Peccora
0:09:09
And I would say that as I was cleaning up, and the other thing is, is whenever I've acquired practices and brought them in, they've come in with a set of accounts receivable that weren't as clean and as consistent, but you can customize these to say it's coming from that previous doctor or these perspectives, and they've merged into the entity, and now they're getting text messages. So I've been able to bankroll a lot of these mergers in or these acquisitions in by making sure that we got that AR much better than they were getting before by using this method as well. Does that make sense?

Peter Boulden
0:09:46
It makes total sense. Total sense. I thought usually in acquisitions, they had 90 days because the accounts receivable was their property, but you're saying after the 90 day mark, you're saying pretty much?

Dwight Peccora
0:09:57
That's when you trigger and you put on the available.

Peter Boulden
0:09:59
Got it.

Dwight Peccora
0:10:00
At that point in time, you're not playing any games, you're making sure that you're doing well.

Peter Boulden
0:10:02
Just making sure that my acquisition strategy was the same as yours.

Dwight Peccora
0:10:05
I figured it would be.

Dwight Peccora
0:10:07
I'm surprised it's exactly the same.

Dwight Peccora
0:10:10
So I would say that the use of a Bella for us was, you're also triggering less people to go after finances. All of us have built, if a patient comes in and says, hey, I want to use, if they don't use Care Credit or use something like that, or they want to do ortho over time, then sometimes they just need a payment method, okay? So Abella allows us to do two real things. First off, go after AR, that's just sitting out there and needs to be tackled and needs to be a frictionless method by which people get to pay it back. Either they pay it out in full because they're not paying attention because who sends out mail outs anymore, or they're not answering their phone or whatever.

Dwight Peccora
0:10:49
It's expensive.

Dwight Peccora
0:10:50
What is it?

Peter Boulden
0:10:51
What does a postage stamp now?

Dwight Peccora
0:10:53
Ridiculous is what it is.

Dwight Peccora
0:10:54
I don't know.

Dwight Peccora
0:10:55
And neither one of us know. That's how frictionless we want our lives even, right? And so if I'm handed mail, I had a neighbor bring me mail last night. They're like, this is your mail. I'm like, yeah, like I don't even want to hold it.

Peter Boulden
0:11:08
Can you just throw it away?

Peter Boulden
0:11:09
Yeah, you can keep it.

Dwight Peccora
0:11:10
Like it is what it is.

Dwight Peccora
0:11:11
So it's almost like businesses are no longer expected to, if you send something like that out, it's kind of like you're showing how archaic and old school you are. Whereas when you're using a payment method and say, hey, by the way, you haven't been to your ortho appointments or something got lagged, or insurance didn't pay for something and you owe this piece, you want clarity, but you also want to create a frictionless method. So that's how you go and manage that AR, is you just turn that thing on. Now it is like a spigot. Sometimes you can just leave it on and it runs and it stays on top of your system and does it. Sometimes you can just turn it on and make sure you're going after the certain ones that you really want them to go after. And you can kind of decide what numbers you feel is worth going after, what are not. And for most of us, we claim it's just like those small ones that you don't want those team having to go after and be like, $21 or what, no, I don't need someone to spend the, you know, a few minutes even on that phone call. They should be focused on the bigger conversations that really need to happen with those more complex treatment plans. That maybe there was a bigger balance left and that's because their insurance screwed them over or something like that. Those might take an actual conversation with someone on the team, but the others you don't really need.

Peter Boulden
0:12:24
♪ This time baby I'll be fine ♪

Peter Boulden
0:12:28
So I actually just had someone hit me up the other day, Craig, about, you know, I'm a big fan of Dance Road Chairs and kind of the family business that is Dance Route in California. And he said, hey, would you recommend that? And I said, look, I've got about 45, actually I've got about 50 chairs. Never had one fail. I don't know how much proof positive you need, but like they work, they go up and down, patients say they're comfortable, they look good. I don't know what else you need from a chair, but I would go with them. And he was like, you made my day. Thanks. Confirm my buy, right? So, you know, we talk about this, Craig, in our Bulletproof Pathway from a cost engineering standpoint because I think dentists sometimes get hosed with the quote-unquote, this is a dental chair, this is a dental this, this is a dental light, this is a dental floor,

Dwight Peccora
0:13:22
this is a whatever it is.

Dwight Peccora
0:13:23
Dental cabinet.

Peter Boulden
0:13:24
It's a dental cabinet. Right?

Dwight Peccora
0:13:26
And so.

Dwight Peccora
0:13:27
Looks like a kitchen cabinet.

Dwight Peccora
0:13:28
No, no, no, no, no, no. It's a dental cabinet.

Dwight Peccora
0:13:30
Didn't she say the price? If that was a kitchen cabinet, that would be $500.

Peter Boulden
0:13:33
Yes, but because it's dental, it's $17,000.

Dwight Peccora
0:13:37
It's certified dental by G.B. Black.

Peter Boulden
0:13:39
And there are some areas where obviously you need to have dental specific and obviously it's a dental specific chair, but I think there's tremendous value. And I think cost engineering is, if you're going to be an entrepreneurial dentist, cost engineering is something you need to become really good at. Because if you're just buying Cadillac shit everywhere you go, then you're going to limit and it's going to be a rate limiting step for you from a financial standpoint. So all things being equal, I'm a big fan. I know, I don't know if you, are you going to look into that as you kind of, you're expanding, you're about to put in five more ops, right? Yeah, I have to do five more ops. So yeah, I got, in full disclosure, I got flown around for my dental supplier in a private jet. I'm like, okay, I'm good. I'm going to buy those. And then I've had a lot of trouble. Don't mention the name, but I've had a lot of trouble. Well, guess what? You know who paid for that? You know, you think that flight was free, but you actually paid for it.

Dwight Peccora
0:14:28
Oh, trust me, I got clubbed like a baby seal. It was terrible.

Peter Boulden
0:14:31
This time, baby, I'll be playing through. This time, baby, I'll be playing through.

Peter Boulden
0:14:41
You know, I'm thinking of something right now, and this is going to be a little bit tangential, so I'm going to pull a Craig. Hypothetically, let's just say someone's been avoiding your phone calls knowing that Fort Bend is calling right that has a $21 balance Right. Okay. It's like I don't have checks. I don't really want to deal with it and now feels like a Little embarrassed or you know, they've been getting the notifications now they have a hygiene appointment coming up and now they're like, you know What I'm just gonna ghost that too because like I'll probably I don't know so I'm thinking like you know as you were talking Dwight honestly my brain unfortunately goes in like five steps down the road I bet things like this where you can reduce the friction actually increases the recapture rate of patients coming either back into your into your system or it increases the

Dwight Peccora
0:15:34
retention of the exist of their next upcoming appointment. It just cleans up some of the drama too. Because how many times does your hygienist say, well they didn't get to the back because they had a question for the front.

Dwight Peccora
0:15:44
Yeah.

Dwight Peccora
0:15:45
Or it was because it was a balance or something like that. Or maybe it's just a canceled appointment fee or something, whatever it is, but it's a basic fee. It's a consistent fee that comes along. And you have the ability to go in and clean up some of that if you really feel the need to. Or just let it go and let the conversation happen. But most individuals just don't wanna deal with that and they don't wanna come in with guilt, right? Healthcare already carries guilt, right?

Dwight Peccora
0:16:08
Yeah, totally.

Dwight Peccora
0:16:09
And so if there's financial guilt layered on top of that,

Dwight Peccora
0:16:12
it's like, ooh.

Peter Boulden
0:16:12
Yeah, yeah, yeah, it lights out. What practice management software do you use?

Dwight Peccora
0:16:18
We're Open Dental.

Peter Boulden
0:16:19
Open Dental, all right. So obviously it integrates with that, no problem, right?

Dwight Peccora
0:16:23
I know it integrates with EagleSoft. Yeah, it integrates with, I understand it integrates well with Eagle Soft, Dexus, it's been across platforms. They integrated that a couple of years ago because we were in the process of transferring from Eagle Soft to Open Dental and it was just like well we're just going to wait until May but to them it didn't matter, it integrated either way.

Peter Boulden
0:16:42
Well I'm glad you brought that up honestly because I really wanted to talk to this pod about you know kind of either the economy and how we present treatment and having options. Like I talked about, I started this with talking about care credit, but I'm glad you actually bring that up because that's just equally as important. The accounts receivable and having a system there versus like using burning phone calls with patient, with I'm sorry, with your team's time or burning postage or doing a lot of things. Automate that, reduce the friction. I love that, honestly, Dwight. I actually want to do another pod with you and I text you on this. It's kind of just like increasing cash flow in this, you know, if we are about to enter a recession, like one of the best ways to insulate yourself is talking about taking your cash flow. Right. So I do want to have another Dwight Pecora pod. But I also want you to keep touching on the way I started this pod was about the presenting treatment and giving people options of third party paying.

Dwight Peccora
0:17:43
Right.

Peter Boulden
0:17:43
Not just credit card or do you want to pay in cash or whatever, like having systems. And I want you to kind of talk about, not systems, having options. I want you to kind of talk about the differences that you've seen. Because I know you have a very large, like I said, a large balance now that you've accrued using Compassionate.

Dwight Peccora
0:18:01
Correct.

Peter Boulden
0:18:02
For benefit of you and your practice.

Dwight Peccora
0:18:04
So yeah, so even if we were gonna say that the amount of balance that we've been able to focus on putting on some of these components.

Dwight Peccora
0:18:13
What is it?

Peter Boulden
0:18:14
Like do a full stop of it,

Dwight Peccora
0:18:17
because I know you have more than that.

Dwight Peccora
0:18:17
So specifically just to Bella, which is the first batch of stats that they gave me, we've collected over $1.5 million in a Bella.

Peter Boulden
0:18:26
Well, that was a Bella that you were telling me.

Dwight Peccora
0:18:28
Bella only, right?

Dwight Peccora
0:18:29
Got it.

Dwight Peccora
0:18:30
I love it. The beauty of that is that that's money that's come to us. They're not taking a chunk. It's just a service. It's a method by which we use it to make that happen, get that collections in. Not to mention, there's another piece of that, and I'm looking. We've got a good $288,000 in internal payment plans, because you can use Abella for that same method. You can go down the road of saying, hey, we're going to use you as an internal payment plan with no interest, no nothing, if somebody wants to do that for their ortho, or for whatever it is they want to do, you can use it in that way. So that's another method in which Abella is used.

Peter Boulden
0:19:06
Meaning it's just within the practice, so I'm curious what your default rate is on that.

Dwight Peccora
0:19:12
So that is basically just a method to not have to track and keep credit cards. You know how old school practices,

Peter Boulden
0:19:18
you have to do it, right?

Dwight Peccora
0:19:19
Let's run it.

Dwight Peccora
0:19:20
Now there's still do, if something doesn't work out, but it's an automated method within so that you don't feel like you have to make the jump. Because a lot of people are worried about taking the care credit cut or things to that degree and going down that road. And I think that's where people really get most uncomfortable sometimes. And so I know there's, it's kind of a discussion about compassionate, it tends to be one thing. And the discussion on Abella is a totally different scenario because Abella is just kind of an easy thing to just leave on. Make sure it's cleaning up all the stuff that maybe your team doesn't even think it's worth chasing those calls, but it needs to get done. That collection seems to come in. That's what we've been able to use it for the most, right? Now, if we're gonna talk about compassionate, I think that what's most important about that side is that we've been using it when you get to the case scenario. It only does, it doesn't do a full credit check. It actually does a check on, basically, if you have a checking account that has consistent income that's staying above a positive balance and maintaining itself. So it runs a check on that, and it just runs, so you just need your ID and it runs what is called a checking credit, some type of thing.

Dwight Peccora
0:20:31
And all it does is establish that.

Dwight Peccora
0:20:32
So it's not an actual credit.

Peter Boulden
0:20:33
So it's not a hard hit on someone's FICA score. Correct.

Dwight Peccora
0:20:38
And so what it really does is it creates an availability for them to be double checked that they're not just coming into your practice and running and having all these debts and having really bad checking accounts going down that road. Now basically it allows you to set up a percentage of interest within your own, and you're collecting all that interest yourself, so you're acting a little bit like that bank for sure. And then the benefit, some of these interest rates are much higher, right? They're much higher than what you're gonna get for care credit, but it allows you to get what they call like 100% approval, right? Because you get to the point where it's very, very rare for you to not get that benefit. And that interest rate can be higher, can go up as high as 16%, but when people are really dying to get that, then the ROI on that is a very different case scenario, right? Somebody says, all right, well, if I default on 10% of it, but I'm getting 10 or 12 or 14% interest rate, it's clearing itself and making it capable for others to be able to accept

Peter Boulden
0:21:33
that as an option. Does that make sense? Yeah, totally. So you're talking about in the in the care in the I'm sorry Yeah, yeah, and I think it's important like I said I think it's important that that we have a multitude of options because it's not that I Always tell people like look I have a lot of pretty wealthy friends Dwight honestly And if I were to come in and just slap a price tag in front of them, they'd be like, I'm not buying that for dentistry. And they've got quite a lot of money. So people, like I said, we just live in this economy where we need things, and I think it's gonna be more important now than ever to make sure that you have systems in place, whether it's third-party paying, and if you wanna stick to something, care credit, where they take the big, right? Or if you wanna switch to something where you're actually owning it, that's be more of a compassionate, where you're presenting treatment and then you're actually the one that's, they are just helping you with the loan acquisition, right? Or the, I'm sorry, they are helping you with the acquisition of the payments, right? But it doesn't look like it's branded from your practice, which is, that was one of the questions I asked was like, I don't want it looking like Atlanta Atlanta Dental Spa finance company kind of thing. I want it looking like a legit third party bank on behalf of me. So. Which is why a lot of people will put it

Dwight Peccora
0:22:59
into a separate account. Right. Because then it acts as.

Peter Boulden
0:23:02
I think that's recommended.

Dwight Peccora
0:23:03
It has value, it has value as far as its own paper and you can actually put it on your books as an asset. Right. Because it's due to you and I mean, there are some groups out there that will even sell that asset, right? They'll do what they can, but it's, it's, it is an additional asset besides, as opposed to allowing your AR to be a negative in your process, it's considered, that AR is actually considered an asset to put on your balance sheet.

Peter Boulden
0:23:24
So what is your, let me ask in your, in your group, like how would you present, let's say you were doing, I know you do big surgical cases, big combo restorative slash cosmetic cases in your practice. Let's just say someone that you're presenting a $30,000 case, like what would be, like how do your treatment coordinators

Dwight Peccora
0:23:43
go about it?

Dwight Peccora
0:23:44
So our treatment coordinators would focus on top bottom. So first thing is, here's the treatment plan, this is what down payment is, the rest is due at service. That's start one, right? If they're struggling right off the bat and having that conversation, reading the room or whatever, then there's an opportunity there to start discussing what a payment plan would look like. And we have limitations on-

Peter Boulden
0:24:09
So Dwight, let's pause this, because this is great intel. So your team said, look, let's go with option one. Let's present the top and the bottom, like you're saying, and then kind of pause, wait for a reaction.

Dwight Peccora
0:24:22
Give the individual a chance to be able to say, absolutely, here's a card, don't turn it into a down payment or whatever, let's pay it up front, which tons of our patients do. It's great, we're thankful for that. At the same time, we want the protocol to be set for when we're in a bull market.

Peter Boulden
0:24:39
And the reason, I'm cutting you off because this is like gold. The reason that you do that, Dwight, is because obviously the best usage for the practice is them taking option one, where you don't have to get in this scenario where you're a getting payments over time or using a bank that then charges you a finance fee. Correct? Right. So the best and highest use for that that treatment presentation is going to be doing what you said. Don't so where I'm going is you don't just lead with like here's the payment, here's the payment, here's the payment, here's the payment with everything. You want to almost give patients the right to you know sit and a little bit before you give them options.

Dwight Peccora
0:25:23
Yeah I can't walk into a store and buy a t-shirt and walk to the front and be like alright give me a payment plan on that.

Peter Boulden
0:25:28
I need to. Yeah but a t-shirt is quite different than a $25,000 case.

Dwight Peccora
0:25:32
Yes, but even going to a car it's different right now right? You go and they're like oh it's $300 a month for your Honda Civic. And it's almost like they're coming at you that way, right?

Peter Boulden
0:25:42
Yeah. They don't want you to pay cash, actually, because they make all their money. Obviously, they make their money over time with doing the financing. They'll say, oh, cash price is different than the finance price.

Dwight Peccora
0:25:53
You're like, what?

Dwight Peccora
0:25:55
Yeah, exactly. So for us, what's interesting is, we want to build a protocol that's exactly the same during a bull market as it is during a recession. Meaning it's consistent, the team knows, and they're trained on that process. So yes, you ask for the payment as it is. If they have insurance in there, you can go over it and say, great, this is your insurance, but it is a prediction of what it is they might pay, they may or may not, and come back. So that's the only caveat on that. The next step is that my team, before we even go into all the components of options for third party financing. My team knows that there's two types of financing. One is we're going to wait for the cash, right? Meaning we're going to use Compassionate and we're going to put an interest, right? And we're going to bring it to us. The other one is we're going to get cash upfront. It's going to get paid for like a care credit or lending club like most people are used to. Right. Those individuals, the only problem with that is you get a haircut, right? So the haircut might be 10%. You might find a way if you're a large treatment plan to throw that into the treatment plan, make sure that it's all in there and comprehensive and nice and clean. But before you let your team go out into the world and start offering all these plans, you've got to limit the one where you don't get cash flow. So the compassionate one for us, our team knows that we have a certain cap every month at each location on what they can allow for that financing.

Dwight Peccora
0:27:17
Does that make sense?

Dwight Peccora
0:27:18
Got it.

Dwight Peccora
0:27:19
Yeah, yeah, yeah.

Dwight Peccora
0:27:20
I didn't think about it in the past.

Dwight Peccora
0:27:21
Because if not, you left the previous one, so they just go, go, go, go, go. Well, that's not the case scenario. And if for some reason during recession, you got more people asking for third party financing, they're going to cap out that number early on and maybe for the rest of the month, okay, the only option is a care credit or something to that.

Peter Boulden
0:27:36
So I like the way you're presenting this, because what I didn't mention earlier on was that there is still a place for a Care Credit Lending Club Bank, right, financing, because you're getting your cash upfront. Compassionate is not a replacement for such, it's an augmentation of such. So go through, so you want to then, if let's say you're flush with cash flow, then you would say, look, team, go ahead and why don't you present this from a compassionate standpoint because then we're offering a great service to the patient we can offer a great approvals to the patient and we don't need this cash and we'd rather have it over time and be the bank yes right but if you're in a different predicament and you're saying look we actually just need the case approved because we're having a large expenditures or we're growing we need that cash flow now then maybe and the patient needs to have financing, which most patients likely do or want, let's use one of the third parties to then get us our cash up front. I love that, Dwight, and here's why I love that, because I've always struggled with helping people discern when to use one or the other, and does this one take the place of this one. I love that because you're looking at it from a very analytical scenario.

Dwight Peccora
0:28:55
Because at the end of the day, our job as business owners is to protect the house and make sure that no one method starts becoming the method by which we use it everywhere. And I'll be honest, having multiple locations, sometimes there is somebody that didn't get fully onboarded well and they're going off and they're compassionate, but we can watch it. We can see where it's at. Right. We know when they hit the button and say hey whoa you know your hair is gonna look bad because you're not helping. The goal is is to use those faucets turn them on based on the necessity of not only serving your patients but also to create an opportunity where some of these patients in particular when they're on these big surgeries and they're taking a lot of time to go through that they got to come back for their finals or going through all that, those are great cases too because you know they gotta come back right.

Peter Boulden
0:29:40
Right.

Dwight Peccora
0:29:41
They're spaced out.

Dwight Peccora
0:29:42
Not a one and done.

Dwight Peccora
0:29:43
Not a one and done, yeah, yeah.

Dwight Peccora
0:29:45
Yeah, so there's a practical way to do it but if your treatment coordinators are good at getting people, like we call them patient advocates, right, because they're there to advocate for them getting their care the way that they want it done. But at the same time, they've gotta advocate to help them make sure they make the payment, right? There's a reason why we get approved for different things because people are like, no, you're not gonna be good for this because your credit's showing that you're not good at that. Then let's make sure we give you what you, we know you can handle. And that in some ways is what our patient advocates are doing. They're in there trying to make sure that this individual can handle, not only getting the care that they need, but making sure that they can pay for it in an appropriate way. Or else you've got to phase out their treatment plans and help them. So I mean it's a critical job in our in our.

Peter Boulden
0:30:29
Now I'd say it's not a critical job it's it's really an art and I think it's one of the most critical pieces to the health of your practice is is the this enrollment phase we're talking about. So and I think it's going to become more important like I started this pod you know being able to just rely rest on the laurels of I'm the doctor and this is what I recommended, is not gonna work well, in my opinion, because you leave the room and they think, all of a sudden they're thinking, how do I get out of this and how do I not do it and how do I say no? So if we create all these ways in which someone can say yes, because ultimately they need the treatment, right? Or want the treatment. Creating ways for people to say yes is magic. And that's where I see the practices that I see. You know, Dwight, we coach, probably coach hundreds of practices across the nation. And ones that I see that just kill it, have this nailed, have this buttoned up, and they're able to present treatment very competently, enroll treatment very competently, and give patient very graceful options on how to pay. And that is it.

Dwight Peccora
0:31:38
At the end of the day, you know, our care is still relationship based, but let's not treat like it's just healthcare side. I mean, there's a whole side of them that they walk in here with, and that is financial stressors and the way life goes. And if you've got good people focused on that, you'll make it through recessions. You'll make it through these things just fine, because you find strategies to get them their care and to get them to the other side of it. And I think when Bruce Baird and his team really were trying to put together programs like Compassionate Annabelle, the idea was not only help the practice level, but get patients who have a ton of work and it's just too much of a jump to be able to get to the point where they finally get into preventative, consistent health. It's just too much of a jump. And sometimes it is those, they've got 30 fillings that need to be done. It's just, it's too much to really handle. Or if they're young and they're in the late 20s and they never had good care, getting them to make that leap all of a sudden, you've got, then you're kind of fulfilling our oath and a lot of the service side of what it is that we should be doing. And I think that's a big deal. And I think we shouldn't just avoid it, which is why we leave a portion of our monthly to be segregated to be able to do that and serve those patients in a way that before Lending Club or Care Credit wasn't really able to do.

Peter Boulden
0:32:51
Man, that's great.

Peter Boulden
0:32:52
I think that's, you know, I'm struggling with any value to add beyond that, but I think this is something that, if someone's listening to you, I think it's a great place to audit your process. You know, I think you'd be shocked to see that most practices, they'll get their treatment plan presented from, I'm sorry printed from Eagle soft or whatever they're using and then they'll hand it the patient and it's literally almost Impossible to interpret for the patient. It's very hard It's got tooth number this and code and this and that it's like how do you want to pay? He's like, I don't know what this is a and like hasn't been explained and all the things So this is an art and I think you should audit the whole process from soup to nuts and take yourself out of being the dentist and put yourself in the consumer and look at how your practice is presenting treatment. Whether or not you have treatment coordinators, whether or not your assistants are presenting treatment or you yourself are the ones. I know lots of dentists who they themselves have no sweaty back about presenting money and enrolling money, which is fine, which is fine. But most doctors like to get out of that and isolate themselves to, well, I am a clinical artist, not a financial artist. So anyway, like anything, like I started the summit, you know, Dwight, which you were there, and I say that, look, this is,

Dwight Peccora
0:34:13
summits and exposure are great

Peter Boulden
0:34:15
for you looking at something and saying, wow, how am I doing it? How can I improve upon it? I just heard three things, let's make sure we're doing those. It's just continuing to audit and sharpen your knife.

Dwight Peccora
0:34:29
And don't bury your head in the sand. During the test and through during these processes, this is where innovators, entrepreneurs, start building incredible tools off the shelf. Like what we were talking about earlier.

Peter Boulden
0:34:41
You're talking about in a recession?

Dwight Peccora
0:34:43
Yeah, in a recession where all of a sudden there's-

Peter Boulden
0:34:45
It's a foregone conclusion that we're going to be in a recession?

Dwight Peccora
0:34:47
Well, it's a foregone conclusion that our economics are going to change over the next year, how's that? So I think in many ways the beauty of that allows us to say, hey here's some clarity in front of us and in a consolidating industry we were already in a process of pressure. And what happens in a consolidating industry is we find out new ways to do things. I mean we had a meeting this morning with artificial intelligence on reading our x-rays so that the doctor walks in, whether he's been one year out of school or 20 years out of school, they're seeing the same decay, right? They're seeing the same bone loss, those types of things. That's great. Guess what? Same thing goes with payment strategies. In fact, I mean, Lil' Birdy did tell me that Compassionate Finance's 2.0 is attempted to come out now and over the next few months, they're actually going to create a portal where it allows for all those other, some third party, full money up front financing will be part of that process. So you get to pick and choose. So again, it'll be kind of a single tool. I think they're trying to call it like accept care or something to that degree. The cool thing about that is that for us, it's kind of like when we're trying to onboard our team, it's like, by the way, we have Care Credit and we have Lending Club, we have this and we have, like if we could bring that all into one space. So again, companies like them are trying to make it easier for our teams to be able to give that and make that available to our patients. I think that's what it takes is they're reducing the friction also for our team to be onboarded to it. So, I mean, I'm excited about that because hopefully there's kind of a turnkey solution. We go from there, but it is, it's gotta be something you turn on and off because you don't always need these. I think it's really, really important that people don't just hit the easy button all the time because then they're gonna look at it and they're gonna be like, whoa, my AR is way out there and it's scheduled and planned out, but I'm having cashflow problems in the office. So you've got to limit everything to know what you're capable of and what you're not.

Peter Boulden
0:36:38
Love it, love it. Dwight, let's connect offline and get, let's do some more of these and let's do another, you know, because I do think, I was asking that kind of that question. Do you think it's a foregone conclusion? Because I do think, I think July 1 is the official record of where the index will indicate that we are officially in a recession. And I think interest rates are going to go to, if anyone remembers, you know, the times of Jimmy Carter, I think they're going there because I think that's the only place we can do. And if that happens, right, discretionary income and people start pulling back. So these conversations we've been having or having today is more important because dentistry is very necessary. People will spend on it, but they got to have the ways in which we can reduce the friction for them to be able to do it. But yeah, let's connect offline and let's curate some more of these, especially I think the cash flow thing is a great one.

Dwight Peccora
0:37:30
That's key.

Peter Boulden
0:37:31
Puddy, thank you for your time. I know you're in the office today. And yeah, I appreciate your time. Puddy, thanks too, bro. and if anyone wants some of your world-class wisdom, how can they get a hold of you?

Dwight Peccora
0:37:44
Well, first off, I'm on the Mighty Networks all the time with Bulletproof.

Dwight Peccora
0:37:47
My boy!

Dwight Peccora
0:37:48
I connect with most people right out there,

Dwight Peccora
0:37:50
especially after the summit, I got the honor of speaking about team building and things there, so most people have reached out to me on the Mighty Networks and we've been able to catch up and get in detail or connect them with other people on our team so yeah You know I I love being a part of this mostly because of the fact that the summits man They reinvigorate my team. Yep. It's all going. That's what it's all about It's reinvigorated me to make sure I'm doubling down on checking everything and this is kind of step one Financials keeping an eye on it making sure a ours not going crazy, so it's critical, but yeah, thanks for having me on bud

Peter Boulden
0:38:22
Yeah, buddy. All right everybody. We will see you next time Yeah, buddy. All right everybody. We will see you next time Yeah, buddy. All right everybody. We will see you next time

Transcribed with Cockatoo