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Doctor extends good bedside manner to debt collection by starting Debt M.D.

David Weldon, Contributor

Any patient will tell you that a good bedside manner is just as important as solid medical credentials. As far as Dr. Hubert Fu is concerned, that extends as much to the practice of debt collection as it does to the practice of medicine.

[Also: Department of Treasury proposed rule takes aim at ER collection practices]

Hoping for a kinder and gentler experience for both patient and physician, Fu co-founded Debt M.D., a collection service that operates on a philosophy of patient respect. It is a unique debt collection model, and one that is drawing quick attention. Debt M.D. is also believed to be the only physician-owned and -operated collection agency in the country.

An anesthesiologist in Dallas, Fu began practicing medicine in 2004. He has always spent a part of each day on billing-related matters, and that has involved a certain degree of debt chasing.

"Quite often, I just wrote it off," Fu said. But since the recession started five years ago, "I see it a lot more often." That has led to a growing number of patient accounts in collections.

The problem, as Fu sees it, is that his customers didn't go on reckless spending sprees or make unwise financial decisions – they just got sick. He said he feels the same sense of responsibility to help them in these bad times as he does with regard to their health. And he doesn't want money matters to interfere with the doctor-patient relationship.

Those feelings didn't often align with the mission of collection agencies Fu encountered. They get paid a percentage of money collected, and they target the easiest and most vulnerable debtors – sometimes relentlessly, Fu said. Traditional collection agencies also focus on big money amounts at the expense of smaller debts, with low overall success rates.

So Fu decided that the best option was to start a new type of collection service. The hope is that with a strong transfusion of physician compassion, the service can work with patients for a longer-term solution that helps them, and ultimately collects more of the debt.

Fu's philosophy is shared by partner Ray Cox, vice president of business development and principal at Debt M.D. Cox handles the consulting and training side of the business, while a third partner – Zack Ingram – deals primarily with actual collections.

Coming from the collections industry himself, Cox acknowledged the poor public image the field has. Still, "the vast, vast majority that works in our industry are good, upstanding people, trying to help the customer as well as the client. That doesn't sell well, or get air time," he said.

Having said that, "people with less than good morals can get into this industry and do all sorts of harm, and we see that all the time," Cox said. He especially deplores the way customers are often treated by aggressive collection agencies.

Debt M.D. currently has a small staff of collections professionals that work from home, Cox explained. Since the company is trying to distance itself from the traditional industry, no one with collections experience need apply – you won't be hired. The company is also making a deliberate effort to recruit individuals with disabilities and veterans, in keeping with its mission of helping others.

At the heart of the program is technology, Cox said. Each collection agent is provided with a laptop or computer with a camera and with a software program from Columbia Alternatives that helps analyze the individual circumstances of each debtor and the best probable way of working with that individual to pay down their debt on acceptable terms. The software program also has built-in alarms that alert the main office when an individual collector uses unacceptable words or vocal tones in their conversation.

"Instead of taking the approach that 'I get as much as I can, as quickly as I can', we want to help you with your problem," Cox said. "How can we assist you with this debt so that it will be as painless as possible."

Of course, there is a bottom-line motive as well: collecting more of the debt, over extended time.

"Traditionally, only 3 percent to 10 percent of assigned collections is ultimately collected," Cox said. "Even if we take only small amounts of payments, but we are able to collect 20 percent, 30 percent, 40 percent of the money owed – in this industry, that is unheard of."

So how does Debt M.D. plan to get from 10 percent return to 20 percent, 30 percent or 40 percent? By better assessing a patient's ability to pay under the right terms,  giving them a longer payment window and by being nicer to them in the first place. The hope is that those factors will convince more patients to want to resolve their debt obligations to everyone's satisfaction.

"If I have 100 accounts – one at $100,000, and the other 99 at $100 – a traditional collection agency will go after the $100,000 to get a bigger return," Fu said. "But it is easier to get the $100 payment from 100 people than it is to get that $100,000."

The tricks are to be patient, be compassionate and work with patients, Fu concluded. That will help debt collection be a much less bitter pill.

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