Physician-founded Collection Agency, Debt M.D., Aims to Revolutionize Practice

Fu, M.D.
Hubert Fu, M.D.

Hubert Fu, M.D., is a self-acclaimed efficiency nut. It’s what led him to practice medicine as an anesthesiologist—and to become an entrepreneur who is turning the debt collection business on its head.

In anesthesia, everything is streamlined; not so in other areas of practicing healthcare, Fu said: “Once you extend that to everything else in medicine, including billing, it kind of snowballs on itself. Having been on both the receiving and the giving end of billing, I know it just doesn’t have to be this way.”

After personal billing system issues and hearing coworkers complain, Fu decided it was time to take things into his own hands. But he couldn’t do it alone. Enter Ray Cox and Aryn Manning, who with Fu started Debt M.D., a debt collections agency that handles claims nationwide—and is believed to be the only such agency founded by a doctor.

“Medical debt constitutes half the debt in the United States; it shows how out of control the situation is,” said Manning, who has been in the debt-collection business since 1996. “For the most part, people don’t plan on going into debt for medical reasons.”

Another reason medical debt is different than other types of debt is that medical work can’t be taken back. “I can’t repo your anesthetic, I can’t say ‘OK, now you’re going to feel all the pain you didn’t feel because I helped you.’” Fu said.

Fu believes that, for the most part, people want to pay what they owe. Using this guiding principle, he thinks if people are treated humanely, they are more likely to work with collectors and pay their debts.

This line of thinking is new to collections, and so is the rest of Fu’s operation. When people envision a collections agency, they generally think of a bunch of thugs on phones in a small room, Fu said. This is counterintuitive to what the company is trying to do, and only stresses out callers, which in turn can anger the clients.

What makes Debt M.D. different from other agencies starts with the employees. First, the company execs will not hire anyone who has a background in collections, as they feel it will hinder progress, as you can’t “unteach” people how they’ve already learned to handle clients, Fu said.

Debt M.D. teaches all its workers to be kind to debtors and show them respect. The team functions on this guiding principal: Respect and humane treatment are the only ways to get people to pay their bills.

Second, there is no office. People can make collection calls from home, and because they are paid on a commission basis, the Debt M.D. founders believe they are more likely to work harder because they are working for themselves.

One employee is a single father with three children, who understands the importance of being able to work from home, Fu said. Even the leaders operate from different locales: Cox works from Washington, Fu is in Dallas, and Manning works from Florida. They hold “meetings” via Skype.

The debt doctor uses technology in another unique way: The company has a program that takes assessment of the stress level in a collector’s voice to gauge whether he or she should stop a call. Leaders also have the ability to coach collectors on the phone, without the debtor hearing what is happening.

“Using tools, or ‘gee whiz’ gadgets like that, you can start to drill down to see that someone may be too stressed to make calls” Fu said. “Or maybe they’re just not a good fit for this industry, and that’s OK too.”

The Debt M.D. declined to reveal the size of its operation or debtor base for competitive reasons, but said all the people they work with sought them out, instead of the other way around.

The Consumer Finance Protection Bureau recently reached out to interview Debt M.D. due to its unique strategies. “They see us as doing something different, and maybe they want make policy that way,” Manning said. “Those are they regulatory people. It’s a huge and significant accomplishment that they came to us.”