It’s no secret that the world of dental insurance is experiencing big changes. It started on both coasts and is gradually working its way across the country. “Premier” dental plans, as we all have known them, are going away along with their preferential reimbursement rates. No new providers are being approved.
While most practices face continually declining reimbursement rates, new and existing patients ask:
Do you take my insurance?
Will my insurance cover all of this?
I want to find out what my insurance will cover first.
And the questions continue…
If you are like most practices, you wonder about your relationship with insurance:
• If you are contracted, should you drop some, or all, of your insurance plans?
• If you are not contracted, should you sign up in order to get more patients?
• Can you stay competitive if you’re not?
• Can you stay profitable if you are?
The “right” answer will be different for each practice. But before you arrive at the answer for your practice, here are some additional questions every practice should be asking, no matter their relationship with insurance today, that will point them in the right direction for a productive, profitable future.
No matter your relationship with insurance today, take the time to answer all seven questions above with your entire team. They are questions worth asking, at least annually, as you stay on track with needs and opportunities in your market. Whichever direction you decide to take, there are keys to success that can be followed to increase your chances of the most favorable result for you, your practice, and your patients.
Q1 WHAT PERCENTAGE OF THE PRACTICE IS INSURANCE-BASED?
Start with your active patients — those you’ve seen in the last 18 months. Within that group, identify those who have dental benefits. There’s your first, gross percentage of insured patients.
Break that group down into various insurers, and you’ll know the percentage of your patient base that have benefits with each.
The percentage of your active patient base that have benefits with each insurance company may yield your first indications about “in” or “out” decisions. 30 percent represents a tipping point. If more than 30 percent of your patients are enrolled in a specific plan, that is an indication that you may have a lot at stake, and should proceed with caution, if considering any changes in your relationship with that insurance plan. Less than 30 percent may mean that you have some freedom to move in a different direction in the future if you choose. But there is more to consider…
Q2 WHERE ARE MY NEW PATIENTS COMING FROM?
From the active patient base, break out those who have joined the practice in the past 12 months. Work out the same percentages as in Question One for your new patients, and look for differences between overall numbers and new patients.
Let’s say 15 percent of patients overall belong to such-and-such a plan, but 50 percent of new patients belong to that plan, you’ve got an important fact to consider. Same goes if the figure for new patients in a certain plan nosedives, or the gross percentages of insured and uninsured diverge. Any notable difference between the status quo and new patients can reveal game-changing trends that you must consider.
Q3 WHAT ARE THE NEEDS IN MY COMMUNITY?
Never forget – a business stays in business, because it serves one or more needs in its community. Take a searching look at your community at large. What kind of community is it, socioeconomically – high, low, middle, mixed? This dramatically affects the dental marketplace and what’s in demand.
Consider, too, the community’s major employers and the dental benefits they provide. A little observation and analysis can show present and future unmet needs – another way to say “opportunities” – and bad bets you do not want to make. And now, you have more pertinent facts for decisions about dental insurance.
Q4 WHAT KIND OF INVESTMENT ARE YOU MAKING, OR ARE YOU WILLING TO MAKE, TO ATTRACT NEW PATIENTS?
This one speaks to both decision-making and its consequences. As a rule of thumb, PPO-type practices, where half or more of their patients and production tie into contractual relationships with insurance, will spend about 4 percent of revenues, or less, on marketing.
By contrast, fee-for-service practices not contracted with any insurances, will invest 10 percent, or more, on marketing. Some consider the reduced revenues from lower insurance reimbursements to represent a business cost, equivalent to marketing. You bring in less, but get direct access to covered patients.
Meanwhile, the more insurance free you become, the more you typically must invest in marketing initiatives. This is not an argument against going insurance free, but you must be prepared.
Q5 IS MY TEAM TRAINED AND READY FOR QUESTIONS AND PATIENT CONCERNS ABOUT INSURANCE COVERAGE?
More often than not – way more – the answer is “No!” And the cost is great, because team members control critical moments when patients make their own in or out decisions. Highly trained team members have a battery of positive and effective answers to patients’ questions that, answered the wrong way, are deal killers.
Take “Will my insurance cover this?” or, from a new patient, “Do you take my insurance?” Whether yes or no, there are ways to answer, so insurance does not become an obstacle to accepting treatment.
In matters of communication, if you are not trained, you are not ready to change course with insurance – or, for that matter, to stay the course you’re already on. A well-trained team is an essential ingredient for success, no matter which direction you take in relation to insurance.
Q6 WHAT KIND OF DENTAL SERVICES ARE BEING PROVIDED?
This question requires a clear-eyed look at what you do, and for whom, and what bearing that has on your in or out decision.
Maybe your services are higher end, providing implants, more complicated cosmetics, treating sleep apnea, and the like. At this level, patients are making significant investments in their health, involving perceived value beyond just cost. Insurance coverage is only a small part of the equation. This profile of practice is better equipped to be insurance free.
On the other hand, those doing general, crown-and-bridge type dentistry may need to stick with insurers as contracted providers. They may have a harder time differentiating themselves from similar practices, and cost counts for more with patients, because the services provided are more widely available.
Q7 HOW COMPETITIVE IS OUR FEE SCHEDULE?
Profitability depends, to some degree, on what you charge. When was the last time you updated your fee schedule by doing a competitive fee analysis? How do your fees compare to the other practices in your area? Are you too high or too low? Do you know? Doing a fee analysis, at least every year, gives you the peace-ofmind of knowing where you are positioned.