In this episode of Dental Marketing Mastery, Mark and Howie discuss how to drop out of PPO contracts.

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Podcast Highlights:

  • What IS insurance participation, really?
  • What do you get out of it?
  • Comparing insurance participation rates to an effective marketing budget
  • How long does it take to get to the point where you can transition out of insurance participation?
  • What NOT to do when transitioning
  • Why going cold turkey is a bad idea
  • How to motivate your team during this process
  • How to keep some of your insurance patients
  • Promoting to the right half of the market

Podcast Transcription:

Hello, and welcome once again to the Dental Marketing Mastery series. This podcast is brought to you by DentalWebContent.com and New Patients Incorporated. I’m Howie Horrocks, the Founder of New Patients Incorporated, along with me once again, as my friend and partner and the President of New Patients Incorporated, Mark Dilatush.

Howie: Well, hello again, everybody. I’ve got my good buddy Mark Dilatush on the line here. We’re going to do another podcast. How you doing Mark?

Mark: Hey, Howie, how are you?

Howie: I’m good.

Mark: How was your trip to, you went to Washington State, didn’t you?

Howie: I did my old stomping grounds. I met up with some old buddies of mine. And we, geez, we just played golf.

Mark: Well, that sounds terrible for you.

Howie: Yeah. How bad could it be?

Mark: How bad could it be?

Howie: You know whether, the only the only bad part was watching my Seahawks on Sunday look like, terrible, but anyway.

Mark: Well, somebody is somebody has to lose to LA.

Howie: Yeah.

Mark: I mean, you know, they just moved the football team there and all.

Howie: Yeah.

Mark: It’s awesome like, what 2 billion so they should get one win.

Howie: Yeah, we’re glad to oblige them, I guess. Good. All right.

Mark: All right. What are we what are we doing together Today? We are doing insurance transitions, are we not?

Howie: Yeah, yeah, we get Yeah, we get asked that all the time, and you know, how do you manage an insurance transition? That’s our term. You know, mostly, they want to know how they drop out of PPO contracts that they’re on, and there is a way to do it. We’re going to talk about that.

Mark: Oh, jeez, awful insurance plans that’s pretty harsh.

Howie: But that’s their words.

Mark: Oh…Those are their words. Alright!

Howie: You and I, you and I when it comes to marketing, you know, or insurance participation, we are Switzerland, we’re neutral.

Mark: We are, we have to be. I think professionally, we kind of have to be because if we take sides, then. You half the other half is angry at us. So.

Howie: No, no.

Mark: So here, but actually being Sweden or Switzerland or both, is actually accurate. Because if you really sit back and you think about what is insurance participation? What exactly is it? It’s an agreement, that you will provide services that you were going to charge X for you, you agreed to charge or collect Y. You’re it’s basically a discount program. And in return, the insurance company promises to aggregate the market, in other words, have hundreds or thousands of potential people on this plan, and put you on a website and put you in a booklet if indeed they still print booklets, and distribute those to the employees who have that plan. That’s the agreement that you’re making. It is very similar to every other advertising agreement you have ever made. That’s all it is. It’s advertising.

Howie: Yep!

Mark: You make an agreement to be in the Yellow Pages. Right? You make an agreement to be in the local newspaper, you are making an agreement and they’re going to promote or distribute your information to the masses that they aggregate. There is no difference. There is no difference between insurance participation and advertising. It is a form of marketing.

Howie: Yes, it is.

Mark: Pure and simple. Now, here’s the other side of it. The other side of it is that Howie and I profess just profess the way we say that we can successfully and effectively promote a dental practice in an average US or Canadian, Australian, UK market for about 5% of the revenues of the practice. Insurance. Go ahead Howie.

Howie: We do. We not only claim that we, we’ve been doing it for many years.

Mark: Well, no, yeah, we do it every day. But what that’s what we’re saying. We’re saying that it can not only can it be done, it is being done, okay. And um so for 5% of your revenues, you can do that. And insurance participation costs you 25 to 30% of your revenues, because you’re going to discount your, your procedures 25 to 30%. When we go to dentist and say, you know how expensive is insurance participation? Some dentists say well doesn’t cost me anything. And technically out of pocket, they’re right, it doesn’t cost them anything. But on the back end, it costs them five to six times as much.

The question is, is how do you balance the marketing medium insurance participation with the other marketing mediums that are available to you. And that’s the purpose of this podcast, because we have, I’m going to say, I’m going to say in the last dozen years or so umm easily 100, we’ve managed easily 100 full insurance transitions, out of insurance participation to a mostly or solely fee for service model. And when I say managed, that’s what we’re going to describe to you in this podcast.

This is these are the steps necessary and the what to expect if indeed you are going to contemplate going through an insurance transition. Um, the first thing that you need to consider is when should you I mean, there’s, Howie, there’s consultants and now you’re going to remember the consultants that were running around back in the mid 2000s or late 90s who were just saying, get out, get out.

Howie: Yeah, yeah just

Mark: Denial forms now! You know, just It doesn’t matter. You’ll be okay.

Howie: Yeah, yeah, we call it the cold turkey approach.

Mark: Yeah.

Howie: I can tell you I can’t remember a single solitary dentist who said, Boy, that really worked out great.

Mark: Right. Yeah, right.

Howie: I can take a remember if you said boy, it was rough, and I wish I hadn’t done it that way. But,

Mark: Right.

Howie: Yeah.

Mark: I know someone who said they survived.

Howie: Yeah, there you go.

Mark: Right. Um, okay, so. So cold turkey, not the right way to do it. How do I know when it’s time for me to make an insurance transition? Because here’s the…Okay, so the first question is, should I do this cold turkey? The answer is no.

The next question is, well, how do I know when it’s time to do an insurance transition. And all I can do is give you the most common point in your career where insurance transitions make the most sense, it is when your capacities, hours of operation, numbers of opportunity and numbers of dentists are maxed. And you are not going to expand… of the three, you are not going to expand your office hours, you are not going to add treatment rooms and you are not going to add dentist hours. When your career reaches that point and you are booked out more than let’s say eight days in advance. That is your indicator, you have used insurance participation for what you should have used it for which was to bring large volumes of patients into your practice so that you can fill capacity. You’ve reached that objective.

Now, you want to use the capacity to make more money to do cooler dentistry, to expand your scope of dentistry perhaps. And, now your careers reached a point where you have more choices, you don’t have to just focus on building a practice, you have a practice. Okay so, now, now you just want to make your practice better. Right? Okay, so when you reach that point, now the next question is, how do I transition? We’ve already covered the question, should I go to cold turkey? And the answer is an emphatic, absolute No.

The next question might be, well, what do I expect? How long is this going to take me? And the answer is three to four years, depending on how deep you are into the insurance participation pool. Normally, when we look about half the half the patients in the practice are insured half aren’t. If you use that as a rule, and you understand what a truly active patient is, then you might see something like as follows.

You might see, you run your reports out of your practice management software, and you look at the insurance reports and you look for the number of patients on each plan and you might see plan one has 500, plan two has 400, plan three has 300, plan two has… excuse me plan four has 200, and plan five has 100. You go down these plans, and you add them up. And you figure out how many patients are on each plan, and you line them up in order of least patients to most patients. That’s what I just said was the most important part of this entire podcast, when you do an insurance transition, you start with the insurance plan that provides you with the least number of new patients. Okay.

Let’s say that insurance company, whatever number five is MetLife. Okay? And Met all your patient and have your entire patient pool 100 patients have MetLife. Okay, so, now we know what to do. Now we’re going to take 5% of our revenues, and we’re going to apply it to the local market. And we’re going to do it properly. And we’re going to target it properly, we’re going to design and deploy it properly. We’re going to track the phone calls properly, we’re going to cover the phone calls properly, we’re going to discuss we’re going to have discussions with new patients properly. And we are going to focus on replacing those hundred patients.

Now we’re going to attract 100 new patients to this practice, so that when we call them at life and tell them to stick their MetLife up the wazoo. We’ve already taken care of the downside risk, we have already, we already brought in 100 new patients to replace the ones that ‘might” – emphasis on might, that might leave our practice after we call MetLife and tell them that we no longer want to participate. Okay so, that’s the key. Always, always, always replace your potential risk prior to making the phone call. Okay, so, yeah. Here’s a really cool part of insurance transitions. And I’ve seen this play out. Like I said, probably, I’m not going to say hundreds of times, but I’ll say over 100 times, right?

If you organize your insurance plans by the number of patients, in inverted order least to most, and you and your team are all part of the plan, you share your plan with your team, you tell them “hey guys, look, we’re gonna, we’re going to start getting out of all these plans. We’re going to work on the one that provides the least number of new patients, we’re going to do some marketing advertising, and we’re going to get those new patients, we’re going to replace them before we call and get off the plan. We’re going to do that and our first one is whatever, MetLife and there’s 100 new patients, and we’re going to track the new patients each month right next to that column.”

And when we get to 100, you know what, we’re all going to sit here and we’re all going to make the call together, we’re going to be on a call, you know, we’re going to be on a speakerphone. And we’re all going to fill out the paperwork. You know, to drop out of PPO contracts together. And now we’re going to have a cake and it’s going to have candles, and we’re going to light it and we’re going to have shots and it’s just going to be a party. Okay, so Every time you, you replace the number of new patients first before you call that insurance company, and let them know you’re no longer going to participate, it becomes this incredibly empowering team wide effort.

The person who answers your phone is going to be frosty with new patients to get more new patients in. The person who handles your insurance is just sitting there waiting for the day. They don’t have to follow up with the insurance, the overdue insurance and the ridiculous claim denials and the patients that never come back and all that stuff. They’re never you know; they can’t wait not to have to do that they would much rather work one on one with your patients. Anyway. You know, your hygienists and, and their everybody in the office is impacted negatively in some way by insurance participation.

I mean, even your assistants get asked by patients after the dentist leaves the room the patients turn right to the assistant, they always say what do you think? I mean, that’s ask your assistant if you don’t believe me. Okay so, even your assistants are tired answer insurance questions that they don’t know the answers too. Right. Everybody on the whole team wants to drop out of PPO contracts including you doctor, but you want to do it from afar answer reason everybody else wants to do it for their own reason. Regardless, everybody’s motivated to get out.

Okay so, when you have that kind of a situation and you set an insurance transition up the way I’m telling you to set it up. This could be a three- or four-year team building exercise that everybody looks back upon and really, you know, looks back upon fondly. It the, it doesn’t have to be and shouldn’t be a risk. Right Howie? I mean, like, in the old days, people were just like, Yeah, I got all my insurance plans last Thursday. I don’t know what’s going to happen, but I feel really good now.

Howie: Yeah.

Mark: For about five months from now he’s divorced. He’s out living in the woods, right? You can’t do that.

Howie: He’s living in a van down by the river.

Mark: Exactly.

Howie: No, it’s a gradual.

Mark: It doesn’t have to be crazy risk. It can be unbelievably motivating and empowering for everyone involved in the office, really it can. And especially if you make a big deal out of it at your monthly team, how close are we to getting our goal? We only got 18 new patients this month toward 100. Okay. So, well, based on that, you know, maybe around February, March will be lighting that cake. Right, or having that party to get MetLife off of our backs. Right. It’s still become something the entire team looks forward to want to continue that all working striving toward that team goal, every hour, every day. And it can be a wonderful experience for you if you manage it properly.

Howie: Absolutely. Yeah.

Mark: Okay, so. And then, you know, don’t take them all just take 80% of them. And just look at that number for a little while. You know, that’s your goal.

Howie: Yeah, that’s also your marketing budget.

Mark: Well, it’s a hell of a lot more than actually five times what your marketing budget should be. So umm, but I did the focus, though, is on the nuts and bolts of doing the transition correctly. We’ve witnessed Howie and I have witnessed way too many dentists doing it the wrong way, going cold turkey, or, or making these decisions based on emotion. You know, this is not an emotional decision. This is a business decision.

There’s no emotion tied to it at all, and it doesn’t matter. I know dentists sometimes get really emotional when you know, insurance company, dentist, Inspector, whatever claims adjuster says he didn’t have to use a crown you could have, you know, you could have done a 93. You know, you could have done a composite or whatever. I know, I know dentist get emotionally involved when the claims adjuster comes back and says stuff like that. But when you do an insurance transition, there’s really no emotion, it’s all numbers, replace the patients that you’re going to lose max, then call the insurance company. If you do that, you have zero risk, and a tremendous upside of bringing your entire team together.

Howie: Right.

Mark: And that’s oh umm, now here’s the big caveat. Okay, so. If you’re going to do that the marketing that you do to gain those new patients, before you get off of these plans, the marketing that you do has to be to the top half of the of your local dental market. It cannot be you can’t throw out a bunch of postcards with a bunch of deals and expect those patients to stick in your schedule long term in order to replace insured patients that you’re going to get, you’re going to lose. That’s not going to happen you have to promote to the top half of the dental market.

If you don’t if you’re new to our podcasts and you don’t know what I’m talking about, I think we’ve done two or three podcasts now on budgeting, top half of the market, bottom half of the market, we would encourage you to go back and listen to those so that you have that background knowledge. Um, basically what you’re looking for is you’re looking to promote your dental practice to moms who care more about their mouth than an insurance deductible. And there are many ways to do that in every market. You just have to do it right. And that’s where you use your marketing dollars and that’s where you get the replacement patients from. So,

Howie: Right

Mark: Howie?

Howie: Yes. I think we’ve covered this.

Mark: I think we I think we hammered it.

Howie: Okay.

Mark: I think we obliterated it.

Howie: Well, to everyone out there listening. Thank you for listening, and we’re going to be back real soon.

Mark: Thanks, everyone.

We hope you’ve enjoyed our podcast today. You can find more podcasts on our YouTube channel on Stitcher and iTunes. Also on our websites, dentalwebcontent.com and newpatientsinc.com