How to Collect a Doctor Bill

HOW TO COLLECT
A DOCTOR BILL

BY

FRANK P. DAVIS, M. D.

Secretary Oklahoma State Board of Medical Examiners, 1908-11. Superintendent Oklahoma State Institution for Feeble Minded, 1910-11. Member County, State and American Medical Association. Member American School Hygiene Association. Member State and National Eclectic Associations. Member Oklahoma Association of Charities and Corrections. Member Oklahoma Press Association. Member Southwestern Medical Association. Late Editor Davis' Magazine of Medicine, Etc.

Publishers
PHYSICIANS DRUG NEWS CO.
NEWARK, N. J., U. S. A.
1913

COPYRIGHT 1913 BY
FRANK P. DAVIS, M. D.

Contents

PREFACE

My excuse for presenting this little book to the profession is that I have often felt the want of just such information as is herein contained. In fourteen years of practice I have made it a point to study my patients and the business problems that confront the man in our profession. Some of the things that I have learned are embodied in this book. Taking my professional experience as a whole I have collected over ninety per cent of my accounts.

If this book shall be the means of causing any physician to study the business side of professional life, and get what is due him, I will feel that I have not worked in vain.

Enid, Okla., June 6, 1912.

FRANK P. DAVIS, M. D.

CHAPTER I

THE SUCCESSFUL PHYSICIAN.

A man with a bulging forehead once said that "Life is what you make it." This is very true in the profession of medicine. The successful physician must live in the manner of successful men. To do this, most men must live upon the income from their practice. If the physician properly cares for his wife and children, he must realize on his investment—his medical education. A man's first duty is to his own, and it is written that the man who fails to collect that which is due him, and "provides not for his own, and especially for those of his own house, is worse than an infidel."

To successfully conduct any enterprise it is necessary to adopt business methods. System is the key-note of modern business, and the simplest system is the best. A cash system is by far the simplest.

No man can succeed in practice, nor can he be considered a safe medical adviser so long as he is handicapped by poverty, a worried mind or poor health; or if he is compelled to dodge around corners to escape his creditors.

There are men who tell us that they are not in practice so much for money as for the glory and honor of the profession. If these men are sincere, I pity them from the bottom of my heart, and feel sorry for their wives and children. Nor can I understand where the profession can gain much honor from men who are financial failures. Not that money is the only thing for which we should strive, but that the man who provides not for his own, cannot be representative of the noble profession of medicine. Also, I have observed that the path of glory leads in the direction of the cemetery, and checks on the National Bank of Fame are generally protested when the rent comes around.

The applause and compliments of the multitude are no doubt sweet, but it only lulls to rest the voice of duty, and fails to provide sustenance for those dependent upon us. Man cannot live on air alone—even though it be flavored by the ambrosia of sweet compliments and the hypnosis of applause. Again, I have observed that a larger crowd will turn out any time to see a man hung than to compliment him on a duty well performed.

The man who answers calls at all hours of the day and night, for any and every one who may request his services; with no assurance of ever receiving pay; and who is afraid to demand settlement for fear of losing practice, is not competent to conduct his own affairs, much less to practice medicine. It is this class of men who make dead-beats of our patrons, and thus reduce the income of physicians to a point where a bare existence is all we can hope for.

To be a safe medical advisor requires that the mind be free from the petty cares of life. He should live in a manner in keeping with the dignity of the profession to which he has given his life. He must have a neat office, wear good clothes, have a happy home and a contented mind.

It is well to achieve the reputation of being an indefatigable and shrewd collector. It pays. It will influence your regular patrons to pay more promptly. It will also help to keep away those who trespass upon your time and never pay you. The only sure way to hold practice is to require your patrons to pay their bills promptly. If they do not owe you they are not so liable to avoid you and cease to employ you. Let a family once get greatly in arrears, then it will happen that—not having the cheek to face you—they will call another physician, and give every reason but the true one for deserting you. Thus, through your own neglect you lose patronage, friends and your good name and reputation. The public will never place any higher value on your services than you do yourself. The death-knell of any physician's success is tolled when he becomes known as a "cheap doctor."

Not only must you require others to pay you, but you must also pay your own bills. Physicians, as a rule, are considered poor pay by business men. It is a very good rule in life to discount all bills that you owe, and never to discount a bill due you. Make it a rule to never owe any man anything, and to have as few owe you as possible.

Many physicians will cut their bills to whatever the debtor cares to pay. In this way they lose a large part of their fees, and achieve the reputation of being poor business men.

I heard an old Arkansas doctor relate his experience in discounting a bill that well illustrates the weakness of many physicians. A client owed him $60, and after the account had run about six months, the man came in and said, "Doc, I hain't got the money, but if you will cut that bill in two I'll borrow it from my father-in-law." The doctor thought $30 would be better than waiting, so agreed. Three months later the man returned and said, "Doc, I couldn't get the money from my father-in-law, but I have a fat hog I can sell and get some money if you will cut that bill in two." The account was growing old and the doctor thought he had better take the $15, so he said all right. Six months from that time the fellow hove in view again. This time he said, "Doc, my wife thought we needed that hog for meat and I couldn't get her consent to sell it, but I have a job now, and if you will cut that bill in two, I'll pay you." This time the doctor thought he saw $7.50 in sight, so again he agreed. "All right, Doc," said the debtor, "as soon as I get in a few weeks work, I'll be in and pay you." The doctor said the fellow did come around a few months later and began a similar story, but he told him to go to a country where rotary snow plows are not much in demand.

One of the greatest mistakes is in allowing accounts for different cases to accumulate until the amount becomes so large that it is difficult to pay. It is always best to require settlement as soon after each case is dismissed as possible. In sending statements, be careful to itemize by cases only, as "John, fever, $15," "Wife, confinement, $25," etc. I seldom give the disease unless it is some special case that required much attention. In some cases it refreshes their memory when reference is made to the disease.

You must know your business. Give every man a square deal, and require others to do the same by you. When you have completed your work, remember the advice of old Prof. Joslyn, "Get money, still get money, boy, no matter by what means" so long as it is justly due you for services rendered. If you fail to require your patrons to pay you for your services, you have not done your full duty.

CHAPTER II

ATTITUDE TOWARD DEBTORS.

A fundamental principle in being a good collector is to never lose the good will of your patrons. So long as you are on friendly terms with a man you can approach him and talk over the matter. It will be easy to keep advised as to what he is doing, and when he is expecting to receive money. The time will come sometime when he can pay at least a part or secure your claim. We must not lose sight of the fact that in this country poor men sometimes become rich, and rich men sometimes become poor, and we should deal with them accordingly. It is poor business policy to permit well-to-do clients to run up big bills, and at the same time hound your poor patrons.

One of the easiest ways to collect a bill, when they have persistently failed to pay, is to loan them some money. This plan is fully covered in the following editorial from Davis' Magazine of Medicine.

"Let us now consider the investment of the doctor's savings. His fees are received in small sums, generally ranging from a few dollars to a hundred dollars at a time. He seldom has over a few hundred dollars on hand at any one time. And failing to find a good place to invest such sums as he has, he becomes a prey for the stock companies and the land sharks, where he can make his investment on the installment plan. Most physicians are earnestly seeking a safe investment for these small sums of money, but very few have found a plan that appeals to them. Most of the advice one gets from the journals is 'Don't' or to invest in farm mortgages. When he looks around for a farm mortgage he finds that the small amount of money he has to loan will not meet the requirements of the man who desires the loan. Even should he find a small loan that he could handle, the interest would be so low, that it would produce a very small income after paying taxes. I believe the doctor's earnings should net him ten per cent, and be in such form that he can realize on them in case of emergency. To take chances on getting a greater rate of interest would be to accept too great risk, and a less rate would be poor business policy.

"The problem simmers down to about this: How can we invest small sums, from twenty-five to one hundred dollars, so they will be safe, and earn at least ten per cent interest?"

I solved this problem several years ago while engaged in general country practice. In fact, it can be applied better in the country than in the city. The plan is this, loan your money to your slow pay patrons. Sounds risky, don't it? I have found it to prove a success. I learned that most of my poor pay or slow pay patrons were always ready to borrow money, and that they could generally secure me with chattel mortgages, or get good men to sign their notes. The note and mortgage always covered the amount loaned and the amount of my bill. There are few who cannot give you suitable security, and these few should be turned over to the other doctor who is practicing for the love and honor of the profession.

"When it is known that you have a little money loaned out, and that you will only loan to those who have you for their physician, your practice will steadily grow."

Be on your guard and do not permit your old accounts to become "outlawed" by the statutes of limitations of your State. This may be prevented in a measure by getting a small payment from time to time on account, as the law of limitations does not apply until the lapse of the period of time named in the law, after the last payment on the account or note.

The exemption laws of most states are so liberal that a very small per cent. of physician's bills could be collected by law, should the debtor elect to take advantage of the exemption law. The only safe method is to put it up to your client as a debt of honor, and depend upon their inherent honesty and pride. It does no good to sue a man for a doctor bill except in extreme cases. You will lose more than you will gain. Not only will you in all probability lose the account and expenses, but you will make a lot of enemies, who will injure your practice more than the amount of the bill.

Treat your poor patrons with the same respect and courtesy that you do rich ones. Mr. Smith will do his best to pay you, while Old Bill Smith will not exert himself very much to balance your ledger. Then above all treat the woman in the flowered Mother-Hubbard as if she were the Queen of Sheba, and the off-color lady from the red-light district as you would the President of the Purity Society. The child that is ragged and dirty should receive the same cordial attention as the one in silks. When the time comes that you cannot treat all your patrons as you would like for them to treat you if your positions were reversed, it is time for you to "Fold up your tent like the Arab and silently steal away," your usefulness is at an end. The day when you can make money in that location has passed.

Be kind to little children. Women and children furnish the greater part of our patrons. Men do not count for much in the practice of medicine,—unless you are a G-U specialist. I have always found that where grandma and the children liked me, that I had no trouble in getting practice or in collecting my money.

Do not pad your accounts. Charge what you consider your services worth, and then stick to it. Deal a square hand to all. The golden rule is just as bright and as true today as it was thousands of years ago, and it is not recorded that any man was ever hung that lived up to it. After you have done your full duty demand that your patrons do their duty by you. Keep after the money that is justly due you. Get money; but get it honestly. You will be criticised by some, and cussed by others, but in the words of Carrie Nation, "Why care for the criticism of men who change and die?"

And finally remember, that in this world there is nothing that will pay dividends equal to smiles—unless it is gall, and do not forget the injunction of the prophet, "Physician, 'heel' thyself," lest in old age the world will say, "Well done, good and faithful servant; enter thou—into the poor house."

CHAPTER III

PROPER TIME TO COLLECT.

"To every thing there is a season, and a time to every purpose under the sun."—Eccle. 3: 1.

The time to collect depends to a considerable extent upon the location and the class of patronage. In cities, as a rule, collections should be made weekly, as many patrons move frequently, and you lose track of them. It is proper and wise to present your bill as early after the service is rendered as possible. Bills should be presented to working men at the time of their regular payday. In country practice I have found it best to send statements monthly and to require settlement quarterly by cash or note. I have adopted this rule in a cotton country where it was the rule to only pay the doctor once a year, if at all. Farmers and planters can borrow money to pay the doctor as well as they can to pay farm hands and cotton-choppers, or at least can give notes bearing interest.

When a man consults you and commences to run down some other doctor, require him to pay cash. He's in bad with the other fellow. Dead-beats should never be temporized with. Don't do a man's practice in the hope that he will pay you, when you know that he has beat the other fellow.

While every case is to a certain extent a rule unto itself, yet, there are a few essentials that are necessary to make a success in collecting. The two principle rules are, to keep everlastingly after them, and never to lose their friendship. So long as you are on good terms there is hope.

Keep your accounts collected closely. The man who carries more than one-third of his business on his books is a business failure. Old accounts breed knockers. Go thou to the lawyer and consider his ways—then cinch the money.

Never employ a collector on commission. Your office girl will prove the best collector if you have not time to attend to it yourself. In fact, for general collecting, she will prove the best collector you can get. Give her an honorium in addition to her salary if she makes good. At many places the collector will be informed that the party she is seeking is not at home, or is not in the office. Instruct her to stay until they return, even if she finds it necessary to take her sewing along, and spend the day. Frequently the party desired is just hiding in another room, waiting until the collector leaves. Rather than stand the siege of a determined collector they will sometimes pay the bill. The collector should carry a note-book and jot down just what the debtor has to say. This should be done in the presence of the debtor. Collectors should always try to get something on account, even if only 25 or 50 cents. It keeps the account alive, and helps defray expenses.

Take notes if you find it impossible to get the cash. Have them well secured if possible. Where you cannot get security get at least two names on the note. Two dead-beats are better on a note than one on the books, but, better still, get the "order note" shown on another page of this book. If you take unsecured notes have them to mature in not to exceed thirty days. Don't overlook the fact that a married woman's note is valueless in many states.

Frequently a debtor will promise to pay at a certain day, and then usually fails to show up. When he makes the promise, make a note of the time in your note-book. If he fails to keep the appointment, write him a nice letter, something along this line:

Dear Sir:—

I am sorry that I was not in the office on the 15th. when you called to settle your account. When we were talking about the matter the other day I neglected to tell you that if I was not in the office when you called you could pay the office girl, and that she would give you a receipt for the amount.

I hope that you are well and prosperous, and that little Mary has fully regained her strength.

If I am not in when you come up again, just pay the amount to the girl and it will be all right.

Thanking you for your attention to this matter, and wishing you success, I remain,

Yours very truly,

This will generally bring him in with many excuses and some money.

CHAPTER IV

BOOKKEEPING AND STATEMENTS.

A simple system of keeping accounts is necessary. There are many systems on the market, ranging all the way from the simple blank ledger to the elaborate desk systems. I prefer the card system or the single book. As only records of original entry are accepted in courts as evidence of account, a complicated system would hardly be suited to the average physician. The entry must be so clear and simple that any ordinary person can readily understand the account, hence, any system that depends upon ciphers or marks is valueless. A physician that is a good bookkeeper can no doubt handle the complicated systems successfully, but as I was not trained as a bookkeeper, the simplest, clear, legal system meets my needs.

Always enter each day's work on the day it is done. Don't wait until tomorrow, or next Sunday to make up your books. By cultivating the habit you can get as much pleasure out of entering charges in your books as you could from some calls. I have seen the time when I got more real joy out of receipting one bill than I would in going seven miles in the country on a stormy night to see a dead-beat. Life is but a joke, but it isn't wise to let the dead-beat have the joke on you all the time.

Don't scatter your accounts on the book. Keep them close together and they will be seen more frequently. It is better to run over the pages when entering charges than to refer to the index, as you will be reminded of other entries that should be made, and accounts that need looking after.

Once an account goes on your books, never lose sight of it or give up until it is settled, or otherwise disposed of. It is a bad habit to skip an account when making out statements. Treat them all alike. It may be advisable to classify your accounts, but you should never fail to push the collection of every account on your books.

In charity practice, enter on your book at the regular rate, and credit to charity to balance. In this way you keep an account of the extent of your contributions to charities.

Keep a stub of each statement you send out so that your client can not bring in an old one and dispute your account. The following form will meet every requirement for a statement. By retaining the stub you have a complete record of your statements.

The best way to hold practice is to collect your accounts. More people change doctors because they owe big bills than for any other reason.

Never tell a debtor that you are hard up and need the money. He won't believe you, and will not only neglect to pay you, but will change to some other doctor. Tell them that you must have the money because it is yours and that you want the profit that may be made with it. Put it up to them as a plain business proposition and loan them the amount if they pay you interest and give good security. They will respect you when you make them pay. A man is judged in this country by his business success. Most men would rather pay a lawyer a thousand dollars to keep them out of the penitentiary for a year, than to pay a doctor fifty dollars to keep them out of hell for a life time.

Office and transient practice should be cash or an order note. The following form will prove valuable:

.........................................191..

After date, for value received, I promise to pay ............................or order....................Dollars, the same to be paid in..............................payments of $....................each, until the sum of $.................. has been paid.

For Value Received, I, the undersigned, hereby sell, assign, transfer and set over unto.........................all my right, title and interest in and to all of my salary, wages or any moneys due, or to become due, to the amount of.................................Dollars, from any person, firm or corporation, and order the said amount to be paid to the bearer out of the first moneys due me after the presentation of a copy of this instrument. I hereby irrevocably waive all exemptions or other rights I may have by means of any law of any state in which I now, or may hereafter be employed or reside. I agree to pay all costs and attorney's fees that may be incurred in collecting the above amount.

Name..................................................................

Occupation................................. Address..............................

Employed by.............................. Address..............................

I have this form printed on cards and file them in a card file. This contract note not only helps to get the money, but it solves the problem of holding chronics and venerals. It is seldom necessary to present the order for payment. When you write a letter advising your client that you will be compelled to present the order to his employer if he doesn't come in and see you, he will show up in a very short time.

Subscribe to the Merchant's Exchange. If a man will not pay his store bills you cannot expect him to pay his doctor. Get the cash when you find his name on the list, or let the other doctor have the case.

After entering an account on your books, make no rebates or discounts. Buy a hog for four times its value, if necessary, but don't discount your bill.

If account is paid by check, remember the following points:

When a check is post-dated (dated ahead), if payed before the date mentioned, the money can be recovered.

When post-dated checks fall due on Sunday or a legal holiday they should be presented on the day following.

Changing the dates of checks without the consent of the drawers will make the checks void.

Checks that are not dated, or that do not contain any statement when they are to be paid, are never payable.

Bank checks are but orders on the bank for the payment of money, and are payable in the order in which they are presented at the bank.

Do not hold checks, but present them for payment as soon as possible.

If a check is not paid on proper presentation, resort may be made to the original claim. Have the banker endorse the reason for non-payment on the check.

Certified checks are checks that have been endorsed by the bank, and constitute payment as to the persons drawing them.

If a check is turned down at the bank notify the drawer at once.

If you receive a check and endorse it and place in your bank for collection, and it is turned down, do not return it to the drawer until you get a remittance to cover, without first erasing your endorsement.

CHAPTER V

FORMS AND COLLECTING LETTERS.

Nearly every form of letter that has been devised for collecting physicians accounts has been based upon those used by installment houses and those in general use by wholesale merchants who deal with retail dealers. They all carry the bluff idea. This is all right in dealing with installment customers with whom you have a contract that will take away the goods purchased, or with retail merchants who know they must meet their obligations if they continue in business. The credit men of mercantile institutions keep tab on their customers through the local merchants exchange and the commercial agencies, and are in a position to know to what extent it is safe to extend credit. The merchant cannot refuse to pay his bills and go to another wholesale house and buy goods, hence if he is a little tardy in meeting his obligations the bluff letter will awaken him to the necessity of paying the bill.

With the doctor's customers it is altogether different. He knows that he cannot be compelled to pay the bill, and that some other physician will be only too ready to come at his call.

It is then evident that the bluff idea will not work with the man who knows that he can get another doctor whenever he wants one, and that he is so protected by the exemption laws that the bill cannot be collected by resorting to law. So in reaching this class we must devise other plans if we hope to accomplish anything. Here, my experience has shown that sentiment is the key note in an effective collecting letter for physicians. I have found that the more human interest, sentiment and friendly feeling that can be woven into the letter the better it is. Every time that I write a letter to a client I try and refer in some manner to the patient or to some member of the family, and try to impress them with the fact that I have a personal interest in them. The following forms are suggestive of the idea, and have proven very successful in my practice. The classification is, of course used with every account—they are all No. 1 until they fail to pay. The word "Class" and the number are stamped with a rubber stamp. Letters of this kind should be pen written—typewriter and form letters will not answer, they lose the personal sentiment.

A duplicator that will easily reproduce 100 copies of a pen written letter may be had for about $5, and the letters may be "formed" on this, leaving space in which the personal matter may be written. If properly done they will have the appearance of a hand written letter. Don't have your letters too polished. Remember you are a very busy man—just writing a note to a friend. Omit the rhetorical embellishments from this class of correspondence in all cases.

The first of my series of letters is along the following line.

CLASS 1.

Dear Sir:—

In looking over my books with a view of raising a small amount of money, I note there is a balance due on your account of $10.00, and as you have always been one of my best paying patrons, I have let this run, knowing I could get it whenever I called on you. I always divide my accounts into three classes: 1. Those who I can depend upon to pay when I call on them. 2. Those who are slow to pay, and that I must keep after. 3. Very poor pay and unsatisfactory clients. Whenever one of my patrons fails to respond to my statements it reduces him to the next lower class.

As you are one of my First Class patrons, I know you will be only too glad to assist me at this time. I saw little Mary on the street the other day, and she is looking well and hearty. I am glad she is so well, as we had a hard fight to save her last spring.

Wishing you health, happiness and success, I am,

Yours very truly.

Now if this fails to bring the money, we will try Class No. 2.

CLASS 2.

Dear Sir:—

I was very much disappointed in not receiving the small amount of your account, $10.00, as you were one of my Class 1 customers, and I felt sure you would not fail me when I called on you. I hope you will attend to this at once, as I would like to place you back on my Class 1 list.

A good credit is the greatest asset that any man can have, and I find I can only maintain my credit by making prompt payment of my bills. To do this I must have a prompt settlement of the bills due me. I know that you value a good credit, and feel sure that you will not again disappoint me.

How is baby getting along? I guess he can almost stand by this time. Come in and see me any way, and we can no doubt make arrangements that will help us both out, and continue the best of friends.

Yours very truly.

In case he is not interested in your friendship, and does not show up with the money, we will try our third and last shot.

CLASS 3.

Dear Sir:—

I am very sorry that you did not see fit to reply to my letters of July 15 and August 15. Not so much on account of your failure to pay me the $10.00 which you owe, but because I dislike to lose faith in my fellow man, and you know it hurts a fellow when he finds his judgment was wrong. I have often wondered how I would feel if I knew my little child was up in heaven, looking down at me with her angelic eyes, wondering why I did not pay the doctor who worked so hard all night to give her ease and to keep her with me. I don't believe that I could be happy.

Still John, I believe in you, and feel sure you will come in and see me about this little matter. I just can't believe I was mistaken in you.

Wishing you success, I am,

Very truly yours.

The personal matter must be fitting to the case. If your patients do not die, you might speak of the "innocent little babe who will grow up to womanhood unpaid for." Lawyers in Oklahoma hold a lien on the cause of action until their fees are paid. Wonder how that would work with the medical profession?

The point that I want to press home to you is that if you cannot get a settlement with sentiment, you cannot get it any other way. You cannot bluff them for they know they are execution proof. Read the exemption laws of your state and you will find that there is not a third of your patrons but could beat you if you tried to enforce payment by law.

Here are some thoughts that have been worked into form letters that may give you an idea that you can use in some special cases:

"Your continued silence after receiving our previous letters, compels us to infer that you neither propose nor intend to remit us the small balance on your account."

"The amount is justly due, and we now state positively that on account of our having been patient, lenient and courteous with you in the past we cannot let the matter drop at this time by merely writing you."

"From information we have received from different sources we appreciate the fact that you are amply able to pay the amount due."

"We are placing the utmost reliance upon receiving a remittance from you in the next few days."

Sometimes you can get settlement by means of a sight draft. Some people seem to fear a bank and will pay an account when held by a bank when they would pay no attention to anyone else.

Always get an order from a corporation before rendering service. If they call you to attend any of their employees, have them sign an order before giving the case any attention, otherwise you may not be paid for your services. They will refuse to pay, and the patient will claim he did not call you. Have some order cards with you all the time for the signature of corporations or others who will call you to attend a patient who is not related to them. The following form will answer:

......................1912

Dr. John Smith:

You will please attend

................................................................................................

during his present illness.

...........................................................

When some corporation or other responsible party calls you up and wants you to attend some one, have them sign the card, then they will be bound to pay if the patient fails to do so. The person representing a corporation should sign, as in many cases they have no authority to bind the company.

CHAPTER VI

LIMITATIONS.

The following table gives the time an account or instrument of writing, (note, judgment, etc.) will survive before becoming "out-lawed" by the statutes of limitations in the several states.