I imagine most of us would be unable to quantify how many times the question…”do you take my insurance?”… has been asked within a normal workday. It is by all means a natural segue for the average consumer. At least according to commonly held beliefs. I for one, on full disclosure, admit that this methodology ran through my practice economic ethos for the better part of 26 years of clinical experience. Even back in dental school, the notion of managed care was front and center as I participated in a practice management pilot with our business school in an effort to launch a dual DDS/MBA program. As part of the curriculum, I engaged in market analytics and case studies of fledgling managed care operations from both the input and output sides. The opportunity to dig into capitation programs at the benefits provider level coupled with on the ground visits to a budding DSO operation, my frame of reference was perhaps warped well prior to the realization that has ultimately led to a near completion of PPO independency. This liberation was by no means an accident, and the genesis for our systemized solution was an abject failure of a “cold turkey” PPO departure back in 2005. By now, the vast majority in the RID Academy ought to be avid listeners and raving fans of Gary’s wonderful and pragmatic approach to dental practice management, so you are well aware of the basic building blocks to a successful plan. Reducing insurance dependency is not rocket science nor wrought with clandestine voodoo, but it does require a deftly devised plan coupled with a few ounces of courage supported by a healthy dose of patience.
One of the most essential elements to our success was stumbled upon by accident. During those myopic days of experimentation, we actually launched an in-office membership program. At the time, it was envisioned out of a marked need to bridge a gap between our blossoming population of retirees and burgeoning class of insured clients. Thinking, like most naïve dentists, that the almighty insurance plan was the ticket, we “felt bad” for our newly uninsured clientele and devised a method to try and maintain their business. Fast forward through a few more economic cycles, a shameful retreat back to in-network status, and a bit of sensible planning, we found ourselves once again wrestling with egregious write offs and lost stomach lining despite a concerted effort to not depend upon dental benefits. So, we consciously optimized our patient experience, really cleaned up our web presence, increased our liquidity, and embarked on a systematic removal of the rotten fruit. Then, here comes Covid-19 and all the fallout associated with it. In actuality, its timing in concert with our decoupling of PPO dependence is already proving to be stellar. Our in-house membership enrollment is at an all-time high, and our retention rate of former in network patients is trending at 85%.
Between two practice locations, we net close to $4M annually with a gross value closer to $5.5M. This represents approximately 33% in annual adjustments! Astonishing to say the least. As Gary so aptly puts it…that is one heck of a marketing budget! I recently received notice that Cigna is implementing a significant reimbursement reduction on all in network payments. This comes on the heels of numerous moments where Delta Dental has successfully installed reimbursement squeezes within several of their constituencies. Ironically, the majority of US citizens are not subscribed to any specific dental insurance program, but the challenge lies with the fact that half of the population either never or rarely seeks oral health care. All the more validation for a well-constructed and systemized in house membership program. Just the mere presence of this program has helped fundamentally improve the wellness and proactive mindset of our patient base.
Once we successfully complete the transition to insurance independence at our main practice, we will deploy the program at our satellite location. The ascension to PPO freedom is arduous but very attainable. Thanks to Gary, Naren, and their team of experts for leading the way and folding time for all that seek to optimize their craft. I am blessed to be a part of an amazing trend in dentistry.
