136: "Streamline Your Patient Financing Options with Brendon Kensel, Founder & CEO, PrimaHealth Credit "

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Hello, everyone, and welcome to another episode of DSO Secrets. I'm your fearless host, Emmett Scott, and today I'm here with Brendan Kinsel, founder CEO of Prima Health Credit. Brendan, thank you so much for being on with me today. I'm excited to dig into this because there's just so many resources that dentistry doesn't have. And I think more and more of our listeners are getting more sophisticated on the value they want to bring to dentistry. And the example I often give is, it's like someone gave me this beautiful piece of land. If I can build great housing on it, apartment complex, whatever, you know, I could have huge impact, make billions of dollars. There's no Home Depot, you know, so I'm out there cutting down trees, whatever, to try to get this done. So I'm just constantly looking for resources. I'd love to understand maybe some of your origin story and then kind of what you've innovated for the space. But how did you get sucked into dental?

Great, great question. So I'm a former operator. I, you know, a number of years ago, ended up partnering with a orthodontist and we started a dental service organization that owned and operated orthodontic offices in Southern California. And, you know, that was, you know,

that's an easy state. That's an easy state to operate in. So that, that was simple.

It's great. You know, everyone is looking for a beautiful smile. So it definitely is a great, great state to operate. And, you know, we, our model was we led with clear liners and of course offered braces as well. So we, you know, we had a high touch, high experience model, but it was a, it was fascinating experience for me. You know, I learned that business from the bottom up, right? Literally sitting in front of patients, presenting treatment plans and patient finance. And, you know, as an owner, operator, that's what you get to do. I was, of course, on the business side. I'm not a doctor and we had a number, number of offices. And you know, the, what I learned really, really quickly is, you know, we work really hard to have a great patient journey right from the time they scheduled appointment, walking in the office, how we greet them to the consultation, all the way through the final, you know, sort of meeting to cover off finances. And what I learned really, really quickly, it didn't matter how great of a job we did on our patient journey and patient experience, if we couldn't present a finance plan that have offered affordable monthly payments, we were, we were toast. It was just absolutely kind of the keys of victory to drive that treatment acceptance at the end of the day.

That's because, Brendan, this doesn't cost me $1300. It costs me 2999amonth.

Right, and that's exactly right. And that's the salient point. You know, think about our, our own economy is as Americans, we all think about, okay, what can we fit into our monthly budget. And that's how we're all wired. And the patient is no different, you know, so we, you know, obviously you go through this cost per acquisition, you do a great job of the consultation, you know, they've now the patient sitting in front of you. And we used, you know, Prime Credit solutions, the usual suspects back when we were operating. But you know, the challenge is they approve less than 50% of your applicants, you know, so, you know, then what you end up with, especially in orthodontia, it's oftentimes you're working with a mom and all she wants to do is get her son or daughter a beautiful smile, you know, and now she just got denied credit. So it's heartbreaking because again, she can't get that care she just wants to get for her kids. So we used to do what everybody still does is we just put them on a house payment plan. But, you know, the challenge with that is you don't know the their credit quality, you don't know their ability to pay. And we weren't particularly good at collecting from our own patients because we didn't want to fracture that relationship. Now, we did have a back office billing team, you know, but they were very good at collecting from our insurance partners. But, you know, they didn't know how to deal with patients. And so ultimately Prima Health credits the dream machine. I wish it would had when I was operating. That's why I started this company, to solve that pain point, you know. So today, you know, when we launched this company, you know, we were really laser focused on just sort of picking up Initially where the other guys were leaving off and providing operators a platform to allow them to really automate and professionalize that existing behavior of putting people on house payment plans. Because now they can tap into our platform where we have really, really sophisticated credit analytics to assess that patient's ability to pay. And it's really interesting.

Can we talk too about when you said the conversation? You can build out a team to have the conversation and let's say they're paying 100 bucks a month, but I don't know if that team's ready to be like, sorry, I lost my car and my kid has cancer and that's why I didn't make the payment. That's a little bit different than how you hit up insurance companies. Like, hey, you owe us this money. It's like, I might be missing an X ray you need from me, but you're not getting a big sob story from. So there is something I think that you're calling out. There is if you have made the leap to in house financing, then you've got to have a process where you're getting their credit card changed or bank accounts or whatever all the time. Right. That's different than insurance. And then you've got to be able to take on conversations that a typical billing person just isn't going to do. Right?

That's right, yeah, yeah. And it's really interesting because like, if you think about, you know, operators, and particularly multi unit operators in DSOs, they're not finance companies, right? They don't know how to assess credit, they don't know how to.

It's another business model we have to build as a dso.

It's not what they're good at. And you know, that's what we built with premium health credit is that's what we really know how to do. That's what we're experts at. And it's obviously I'm drawing on my experience as a former operator and a lot of team members here are former operators. So, you know, we're really attacking the space from operators viewpoint. Because what's really interesting to me is, you know, we've seen other upstarts in patient finance come into the space, you know, really smart technologists out of Silicon Valley or really bright, you know, financial engineers from Wall Street. But the reason they've never really succeeded at scale is because they never understood the patient and they never understood the provider. And for me, that's the tip of the spear is understanding that patient and the provider and understanding that journey that they're on. And how can we help that?

Can you kind of walk us through what that means, like, from a tactical basis? So what's something that you think, okay, they didn't understand this, we understand it. That's why we do it this way. Can you give me an example?

Yeah. I mean, I think the starting point is, of course, we understand the patient journey, having been an operator, but I'm laser focused on how can we help improve the patient experience and how can we help the provider treat more patients? And so part of what we ultimately have done with our solution is we've built out, because the way I'm delivering on that vision is, look, I want to be able to serve people across the income and credit spectrum with a single credit application. And so that's what our solution, because

that's the other thing is you could say, okay, we got this one. If they hit this benchmark and then we're running through this one, and then it's like trying to train that to individuals on scale is impossible. Right. You really do need, like, one solution so that almost, if you're doing. Yeah, you need everything in one place, one approval, et cetera.

Yeah. Because, like, you know, that's. I think the challenge a lot of DSOs have is they have, you know, multiple finance solutions in the office. But, you know, the reality is you're in the office, they, you know, they have all these goals. They need to hit the treatment coordinator, the, you know, office manager, whoever's presenting it is under a lot of pressure. Right.

It's not their only thing.

Oftentimes it's not the only. They're, you know, they have a hundred different things. Right. Because as you know, operations is emailing them, marketing's emailing them. They're supposed to be doing all this stuff, and they're supposed to be converting these cases and presenting. It's just. It's a ton of pressure. And then if you have three or four finance options and you're hunting and pecking, it's such an inefficient process. It's not scalable, it's not repeatable, and it really doesn't empower the cfo.

And

to understand what's going on and how to manage that at scale, you know, it's just. It's just missing piece. You know, you got to simplify. My view is you got to simplify the life of that treatment coordinator. Give them the answers to the test, make it a seamless patient experience and a very easy experience for that treatment coordinator, because that puts you now in a spot where you're not having a bunch of uncomfortable conversations with the patients. Right. It doesn't mean everyone gets approved, but you're having few of those because it's just a great experience to get them into finance.

Yeah. It's a much bigger neck but a much bigger net that you're throwing.

Much bigger net. Yeah. And you're putting the treatment coordinator in position where they can be much more efficient. And now you can actually see more patients because your patient finance presentation no longer takes you 20 minutes, it's only taking you 10 minutes. Right. And that's huge in the world of multi unit operations.

Okay, so let me ask you this, that we'll do a little glossary terms. There's recourse and non recourse out there, right?

Yep.

So recourse solution means that somebody's administering the financing, but really I'm getting paid as the patient pays and if they stop paying, I don't get paid. Non recourse would be you give me a big lump sum of what they've agreed to, some percentage of it and then if they don't pay, that's on you, you're financing the solution. Can you kind of. Is that good? Buckets that we should talk through.

That's perfect. Yep.

So there's some, there's some recourse solutions out there that you know, will kind of help be your back office, but really you're doing in house financing and then there's lots of non recourse that we all know of. That's kind of where it started. Taking some cut of the amount for the administration and the risk. Right?

Yes.

So can you kind of talk through your platform in that framework?

Yeah, absolutely. So we do both in a single seamless experience. So our solution is really, really simple. We call it the green light program. It's a single application credit solution basically for total patient finance waterfall. And we've done this through a special partnership with Citizens Bank. So this partnership really allows us to bring the agility of a fintech and the strength of a bank. And it ultimately allows providers the green light, more patients and the patients to proceed with care. So the way it ultimately works simply is there's a single credit application. If that applicant is prime or near prime, we will, Citizens bank will fund that health care provider upfront, less a merchant discount fee.

What's a credit score of prime or near prime?

You know, if anything that six for us it's really 620 plus is going to fall into this.

Okay, great. So patient walks in, I'm going to fill out premium health credit solution. And one scenario, they're above 620, they're prime or near prime, and the bank on the back end is going to fund this for them and give them a solution and say, here's the interest rate. We'll pay it. Right? You'll pay. It'll all be through Prima Health.

And by the way, yeah, it's a seamless experience because it's within our platform, within our application experience and within our reporting.

We're not logging into some other bank or whatever. That's back end. Right.

And that's part of the patient experience thing I mentioned earlier. It's got to be so seamless for the patient and so easy for the treatment coordinator. So now, you know, if as we go through that waterfall, the patient isn't

qualified, all right, I come in and I'm 550. Right.

So, yeah, now what's going to happen is we will underwrite you on the premium health credit side to and if you're qualified, put you into a payment plan. And the way our payment plans work, again, when we onboard a dso, that DSO says, look, I want to accept subprime or deep subprime or thin credit file runner debanked. And we have credit models designed to serve each one of those so that

the DSO customize it to whatever level

of risk, totally customizable, so they're in control and how deep they want to buy and how much risk they'd like to take. And we'll provide guidance on potential default rates. But ultimately that patient would flow right through into our platform. And if qualified, we'll offer the payment plan just like we would if it was prime or near prime. The only difference is once they fund that loan, you know, they've started treatment, they fund the loan as we receive the payments from the borrower. We're remitting the principal each month to the health care provider and we manage that whole process for them, you know, so the real value proposition on that side is again, we're sort of automating, professionalizing that house behavior. But we're using really sophisticated credit analytics that are tailored each health care segment that we serve. So we, we use different underwriting models for dental versus orthodontia as an example. So if I was building collect on

those loans, if I was building my own back office solution, right. And maybe what I have today is I've got some bank that I'm able to send it off to for recourse, and then when they get denied, then I Use my in house. And then I realize, you know, some are better than others and I got to build out this team and all of this stuff. I mean that's really the ideal person who's like, okay, this isn't scalable. It's too much work for me to do this all in house. I want one software solution, take it down to my team, say hey, help the patient with this. And then on the back end, cfo finance person can help to look at risk profiles and say hey, we want to kick the doors open, we're fine with anybody or hey, this is where we see some risks and so forth. I'm either if they're above that 620 rate, I'm going to get payment what, 24, 48 hours for the treatment.

It's within two business days. Yes.

Yeah, yeah, yeah. So 48 hours I'm going to get deposited in my account for the, I mean that's faster than insurance for the payment credit that they got. And then if they don't do that, they'll get approval. Right, but basically it's an, it's an in house financing, but it feels separate for the patient. Right. I mean because you guys are doing all the administrative work, I'm getting payments pushed over to me every month as they pay. But if something goes bad it's through Prima Health Credit, not through, you know, Smile magic or family smiles or whatever. Smiles practice.

Yeah. And I think, you know that you bring up a really salient point. The fact that it's a third party finance company definitely helps repayment rates and it also helps protect the healthcare providers brand. It's so incredibly important because as you think about payment priority in the US and even in your own environment, it's usually mortgage, automotive, credit cards and everything else after that and everything else after that is the 50 bucks you owe your buddy and usually that bill you got from a doctor and now with premium health credit moves up that payment priority into that sort of that credit card bucket and people have a higher propensity to pay. And then obviously we're servicing, collecting to support the provider. Part of, as you think about that again, it's not really just about fico, it's really about the way we think about this business is it's about serving the underserved. Right? Because my view is unequal access to finance has led to unequal access to healthcare. And that's very true in dentistry and orthodontics as well. And so when we think about serving the underserved, we've built our Models to serve a low income. Yes. Credit challenge right there and there thin credit file. And that could be college students or other folks. And then underbanked and oftentimes underbanked, it's first, second generation immigrants that just haven't accessed a lot of financial institutions in the United States. So part of the way we're billed is we're assessing a couple of hundred attributes in real time to determine their ability to pay. Looking at both traditional, non traditional data points. So really, really digging in and that's really been our superpower and enabling to thoughtfully assess that. And then of course protecting the doctor from folks that just simply don't have the means to pay, can't pay or a really, really rough financial situation or are fraudulent. So we're, you know, help, help protect that, that healthcare provider who's the, who's

the ideal customer who's listening to this and you're like, I'm, I'm very confident I could bring value if they just call me, like what level of, you know, if someone's like well I don't have a treatment coordinator and I never sell cases, okay then you probably shouldn't call. But if you're like what, what should you be doing at, you know, and say okay, this is getting too complex or I want to be able to service more of these patients, but it's just too hard.

Yeah, I mean we're really built for multi unit operators and DSOs or enterprise level platform and you know, it's really designed to again solve that problem I had when I was operating, which is how do we do this in a repeatable scalable way where the outcomes are predictable. And because the, you know, the DSO partner, the cfo, we can configure everything absolutely the way they want. According to do they have Enterprise View

then on their side to look at?

They do.

And that's practices.

You know, the reporting is, is so key because I won't, I won't call anyone out by name. But you know, and this still happens today, which blows my mind where, you know, to get a report with a big finance company, oftentimes you got to email your sales rep and like a week later you get an Excel spreadsheet that was only 50% of what you asked for. That used to drive me nuts. And I see a lot of our partners today that use some of these companies that still the behavior. It blows me away. Like my view is like, no, it should be real time reports. So we deliver real time reports so you can see what's going on with it in your business, you can see what the funnel looks like. You can see your loans by healthcare segment, you can see it by credit quality, you can see it by loan term, whether it be 6, 12, 18, 24 months. And you can download it and even make sell anytime you want. And even better, you can see it at corporate level, you could see it at the regional level and then you can see it at the office level.

I can slice in however I want to.

Yeah. So it's designed to meet the needs that I lived with, which is that's exactly what I wanted and that's what our multi operators want, like be able to have great insights in their business to help them operate.

What if my team doesn't like efficiency and they like emailing people and logging into 70 different locations? No, I'm joking. Nobody that. No one. That's a tough one.

We're definitely a fintech platform. We're 100% paperless and we're very automated now by the way. So we are, you know, we are fully automated and all that stuff. But we do have a key part of what we offer is our provider services. So when we partner with a new dso, we have a team that, you know, trains and supports, provides ongoing education, you know, helps, we provide videos for their learn, you know, their training universities. And we have a team that's available six days a week for any questions that come inbound from the offices. That's whether it be live chat or inbound phone call. Now one of the unique things about our team is all those team members come out of dental and ortho. They've all been former office managers, assistant managers and treatment coordinators. And again, you know, when I talk to you about like we're a company built by our operators for operators, I mean it because I think it's so critical that when, you know, somebody from an office is calling and needs help on an application or something, you know, our team, we have that sensitivity that they likely have a patient sitting in front of them and all they want

to do is totally, yeah, we got

it, let's do it now. Right. So that's how we're built.

Yeah, no, it's awesome. How can someone reach out to you if they're like, okay, yeah, I. Cause here's the other thing I like about what you said is, you know, at my stage, yeah, I've got a CFO and revenue cycle manager and billing directors who have really strong opinions and they're going to want to interact and say, here's what I'm thinking and they want your feedback, but they kind of have opinions on. They've been doing it for a long time. Other groups don't have those resources. So this can be very scary treading into these waters and, you know, they're nervous that they're going to sell all these patients, not collect any money and you know, go bankrupt. So I think having someone like you that's, you know, been there, done that, knows what's works, it sounds like too I could change my risk profile. Like maybe at the beginning I say, listen, I just want to do recourse 620 and above, you know, just like traditional. And then it's like, okay, let me kind of dip my toe in the water on this.

Yes.

I mean, non recourse 620 and above. And then it's like, I'll dip my toe in the water on some of this recourse stuff. And like, okay, we didn't die, you know. And I can also see like, wow, my production's going up. What's happening to my cash flow? Is it okay? Do you also help to decide, like how long I can do the loans for? Whether it's three months, six months, 12 months.

Yeah, it's configurable. But obviously, you know, we'll work with that partner and make recommendations based on their, their model. You know, the majority of our clients have that 6, 12, 18, 24. A few of them, we have shorter duration at three months. Some of them have that, Some of them want a longer duration at 30.

I remember when we first started doing it and I had a team member, you know, and you just don't know what you don't know. You're trying to build it in house and stuff and you think you communicate really clearly and, but you don't have like what you guys have built out. Team member sells like a $7,000 case paid over 10 years at $50 a month or something like that.

Well, the challenge is, and you know this, you've been in the business, you know, the second you take off the braces, your chance to collect start to decrease exponentially. And so it's, you know, it's super critical to tie that, you know, the payment duration approximately to the, to the treatment duration. Yeah, that's the orthodontia business. Obviously dental is a little bit different,

but figuring out that reasonableness. Right. Because again, you know, my phone doesn't cost 1300. It's 29 or 39 or whatever it is. Right. So figuring out that perfect line of what's that good Payment system and so forth. Anyway, this has been awesome. I really appreciate, you know, using my analogy, I really appreciate that you're building out the Home Depots for us so that we have these resources as groups to use. And it's huge for the patients. I mean, with only 40% of patients regularly going to the dentist, I look in, say, what's our biggest competitor? And financing is a huge one. I mean, our marketing could improve. There's lots of areas as an industry we can continue to improve, but if we can figure out financing. When people say dental's expensive, I think a big part is it's not financed well. That's really what they're saying, because they'll go out and buy an $80,000 car or $50,000 car or whatever. What's expensive is the lack of financing. So I appreciate the work you guys are doing over there.

Yeah. And by the way, that's one of the things we. We work on with our partners is we offer incremental training on how to successfully treat cases and present patient finance, because, as you know, it's a skill that has to be developed. And so we offer repeat trainings constantly on how to successfully present patient finance, you know, because once you get better at that and you really understand how to move that patient through the funnel and be able to articulate your fee confidently and then, of course, present the. The payment solution, it puts you in much better position. So we really.

You're doing some treatment coordination coaching, too?

Well, in that. In the context of the financing, absolutely. So that's a key part of our training because that's really where you can be either really successful or not so successful, you know, based on their ability to kind of, again, present that price and say, great, we accept, you know, cash, credit card, or we offer affordable monthly payments. Would you like to apply? And, you know, you've got that. You really coach them up on how to do that thoughtfully and effectively. And. And you know that that is a key part of that patient journey that I referenced early on. Right. Because if we break down at that part of the journey, the wheels come off.

Right, Right. Hey, Brendan, thank you so much. How does someone reach out to you if they're like, yes, I want to at least talk this through, see if we could move the needle on this.

Great. Well, you know, check us out on our website@premahealthcredit.com or, of course, feel free to email me directly, Brendan. B R E N d o n remahealthcredit.com I'd love to talk to you.

Prima is P R I M A right?

That is correct.

All right. Prima healthcredit.com awesome. Thank you so much Brendan. Again, appreciate the resources so that we can have more impact and access to care for patients. Hey guys, if you have any other questions on this, come over to our Facebook page at DSO Secrets. And until next time, keep smiling.

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