Episode transcription:

Pam: A special thank you to our sponsors for supporting the show. National Dental Hygiene Month is almost here. Show your all-star staff the appreciation they deserve by upgrading to therapeutic air polishing. Great help is getting harder to find, so empower your team with the industry standard for biofilm and stain removal. Air polishing delivers superior results while reducing hand scaling, helping to lengthen hygienists' careers. By saving 8 to 12 minutes per appointment, your team gains valuable time to educate patients and drive practice revenue.

Brian: Hi, everyone. Welcome back to another episode of Dentistry Unmasked. I'm Dr. Brian Novi. And with me by my side, as ever, as always, is my faithful prosthodontist. Hi, Dr. Pam. 

Pam: Hello, how are you today? 

Brian: Well, I'm doing okay. I felt like that introduction just keeps getting better and better. But we have—I have to just offer up. We had a proper introduction, and I just asked Dennis if I could wing it, and he said, "Yeah, that's okay." But Dennis, are you okay with me just kind of starting the podcast like that instead of with an official, "My gosh, there's so much to say about dental insurance in half an hour"? 

Dennis: Absolutely. Have fun with it. 

Brian: But no, in all seriousness, you represent a really fascinating kind of perspective of how dental insurance is intersecting with the clinical practice of dentistry and what dentists need to actually keep in mind as this whole either shift or pivot or transition occurs, which we all know is happening to the payment system. And it's going to impact how every dentist is doing business decades from now. And yet it almost sometimes feels like dentists can bury their heads in the sand and not even think about it. 

Pam: Well, you know what? I think they did bury their heads in the sand and didn't think about it for decades. But now all of a sudden we've been squeezed more than ever, whether it's, you know, wage demands from our team, whether it's supply chain, you know, everybody and their mother except for dentists can charge 3% on every credit card purchase. I mean, it seems like dentists and dental practices are struggling. And I think that at some point and in some instances, we're finally like, all right, something's got to give. And one of them is maybe removing themselves from participation of poorly paying third-party payers, or all of them altogether. 

And so I'm really excited to have Dennis Marvel with us here. For starters, he's the founder and CEO of Marvel and Associates. And Dennis has spent 40 years helping dental and medical practice owners navigate business strategy, profitability, and major transitions, including the decision to leave insurance networks. 

So Dennis, we've been complaining about insurance reimbursement since the dawn of time, right? What is different now, though? Why is it that dentists just seem like we've had enough and we need to move on? 

Dennis: Well, it's become apparent that dentists have reached this breaking point of insurance reimbursements are not even covering costs, much less providing the ability for them to pay living wages to their employees and all of these things. And so they are actively participating in PPOs that are actually a loss overall. And they've become aware of this because of how it shows up in their bank account and the struggle to keep running the business, but most importantly, the struggle to provide the quality of care that they want. And that's where the awareness has expanded so much. 

And it's really been 15 years. Delta Dental of Washington was the first and I think that was April 4th, 2011, where they actually cut rates by 15% on all reimbursements across the board for everybody in the state. And ever since then, PPO reimbursements have failed to keep pace with even basic inflation. And the inflation of dental and providing dental services is actually over 2 1/2 times the inflation rate that we see broadcast on the news. 

Pam: So that brings me to this question. I feel like we say this a lot, especially as we're transitioning out of participation. We say to our patients, it doesn't allow us to provide the level of care that either A, we want to provide or B, that you deserve. Our patients open to that as an—I don't want to say an excuse, but as a rationale for removing participation? And can dentists expect a mass exodus of their patients, or do you think patients are staying more and more? 

Dennis: You know, I mean, the ADA published a survey a while back that if you drop a PPO, 40% of the patients will go away. I have never found that to be the case, but it's not necessary for everybody to drop all PPOs. I mean, that's a practice-by-practice decision on how the practice operates, what is the patient base like, who are your payors, and what are your individual rates? Because everybody has a different reimbursement schedule. So it's a decision that has to be made, but I have not experienced even 1/10 of that patient attrition if you drop a major insurance. And I'm not talking about the smaller ones that make up a small portion of the payer mix in a practice, but the really big ones that anybody's given geographic area.

Brian: So I'm curious, you came from a—you came to dental from a finance background with American Express, right? If I'm not mistaken. 

Dennis: That was the last firm I was with, yes.

Brian: I'm just so fascinated at how the different ecosystems of all different aspects of society, and we're talking about the intersection of finance and clinical practice here, right? But American Express has a really different financial model that I didn't realize until recently, until someone said to me, you know, you're doing—you do all your business banking with American Express, Brian, you need to start thinking about establishing credit because your business has never had any credit. 

So, and I just—can you talk about how your work at American Express led you to understanding how you can—how dentistry can think about this differently? Did it play a role? Because I think it must have played a role somehow. 

Dennis: It absolutely played a role, but it started at the beginning of my career when I was with a firm called Dean Witter Reynolds, which was based out of San Francisco. And I was working primarily with doctors that are in surgery centers. And there were a lot of dentists in that mix that kind of got attracted to what we were doing from the periphery. And since then, because of the state of where dentistry is today, that's my primary focus. But in the group, the national group that I run, we're attracting people from all kinds of verticals now because of the real effects of what's going on in the world of finance. 

Now, insurance companies have a completely different model than dentists do. And it either aligns or it doesn't. But we have to understand their business model first before we can make decisions in the practice because they're not necessarily the evil empire. They're running a business based on their customers' demands. Now, their customers are not necessarily your patients. They are the corporations that buy health insurance with dental insurance attached. 

And because health insurance rates have been rising so dramatically over the last really 6 to 6 1/2 years, but pretty steadily for all of history, dental kind of got left by the wayside and took a lot of hits because those employees don't go complain to HR like they do if I now all of a sudden went from a $10 copay on my heart medication to a $30 copay. Does that make sense? 

Brian: Right. But those people do go to their HR departments and say, "How come our dental insurance doesn't cover implants?" 

Dennis: They do in some cases. And the battle for employees—and this is an interesting place where dentistry as an industry can step in and actually hopefully have some positive change—is through educating the patients. And that's one part that we've always missed over the years. 

Dentistry has trained patients to behave in certain ways. They've trained patients that if it's not covered by insurance, it's not necessary. We've trained patients that accepting a lower standard of care than what they really, really want, mostly because they don't understand the difference. And as a profession, we need to teach them the difference, but also as a profession, we need to start speaking like a unified voice. 

I mean, dentists, unfortunately, all work kind of in a silo, even if you're very connected like the two of you. And it's about everybody getting together and starting to work towards a solution to this model because it's clearly not serving patients. It's not serving practitioners. And the big beneficiary are the big insurance companies.

Pam: I think the first mistake that we're doing as an industry is using the term insurance for a patient benefit. For starters, it's not insurance. Think about homeowners insurance, car insurance. You know, those are to cover major damage or major loss, not preventive. You know, you look at dental benefits now. I mean, I think because we use the term insurance, patients understand medical insurance. They understand homeowners, auto, whatever type of liability insurance that they have to protect them. And they think that dental is the same, and it's not. And I think that, for starters, even just using that term is incorrect, and it kind of sends a wrong message to our patients. 

But I think we bring them on. I mean, let's be honest, I feel like many practices will participate in various plans as a patient acquisition strategy. And then all of a sudden, you get so busy. And we know that being busy doesn't always equate to success or profitability or EBITDA. And at some point, participation in that plan can actually be detrimental financially. Where's the tipping point there? When should we be saying, all right, I need to take a closer look at said plan? 

Dennis: I think the tipping point has already occurred, and everybody should take a closer look at every plan that they accept. It's a mandatory part of business. Now, if you're a major PPO provider, and you've got 75% of your collections come from third-party payors, then it may not be the greatest idea to drop a whole bunch of insurance, but you may need to drop some because you're losing more on some than you're making on others, which is what's closing that gap. 

The market can be served profitably, but the conflict comes into can you provide the standard of care that you want to provide as a practitioner, that you believe in and that you know people deserve. Can you do that on most insurance plans? And the case every day is becoming not so much. 

Brian: So when you're working with a practice, I can see that we're dentists, the type of people who think, let's make some broad sweeping changes here. And I can think, do I want to fix kind of some of the issues we have within the practice, or do I want to leave insurance behind to give me hopefully more assets to make the changes I want in the practice for, I would say, bigger and better, a bigger and better practice, right? A practice that's growing and transferable. 

What do you—how do you come up with a strategy, and what do you focus on first? I guess you kind of—it was inherent in your answer, which it depends on your practice makeup, but I, gosh, I always, yeah, I'm just thinking with your experience, where do you put your energy first? Is it money or processes? 

Dennis: You should always start internally with every big change a practice makes because what happens in our office is basically internal marketing, and the better we are in a practice. And the challenge with that is that patients, dental consumers—and I'm not a clinician, I'm a business person—we don't know how to judge standard of care. And I can't think of once I ever went home and measured margins. And so we have to understand— 

Brian: This, I think, is a huge problem we have in dentistry, which is in—to a person who's graduated from a clinical program with no business sense, immediately when you start using the M word, margins, especially when you say margins instead of profit, some dentists in their mind immediately think, I need better restorative margins on my restorations that get less recurrent decay. And to a finance person or a business person, they're thinking, I'm not talking about your restorative margins, I'm talking about your financial margins. Don't make this a clinical conversation.

And yet you can continue going down this road of talking like this and having a dentist thinking, you're talking about doing better restorative dentistry. And you're like, I was never talking about restorative dentistry at all, you heard me use the term margins. And it leads to a lot of misunderstandings in discussions when you have someone in an office setting thinking in terms of the margins of the practice, talking to a group of five or six dentist partners, hearing one of them is thinking, yeah, my partner's margins suck. And the recurrent decay we're dealing with is one of the issues we have. I don't like having to—we're doing free dentistry here. It's amazing to me. 

Do you ever see this? Please tell me you see this playing out in the conversations you have sometime with your clients, because I see this as a problem. 

Dennis: Yeah, I do see that a lot. And if you're in a group practice where you have a lot of doctors, getting consistency and standard of care, having a protocol and a process, is a hard thing to accomplish because everybody wants to practice autonomously. They want to be able to make their own decisions based on what they see. 

And what we have to do is really get grounded in the business realities. And so, you know, to go back to the previous question, it's like, does a, you know, a bad margin on restoration impact profitability? Absolutely. And if what you do as practitioners is take really great care of patients, but train them on what that is and let them see what that is and teach them what that is, that changes the game dramatically. 

Because then it's possible to start working through the insurance process with your patients in mind, standard of care in mind, instead of just profitability and cash flow. 

Pam: Well, how do we identify that? Like, how do we identify this is an inefficiency within the practice versus this plan is just, it's just not financially feasible to maintain, to keep it because it's actually just, you know, it's killing us. So, like, where do we make that decision that it's an inefficiency versus a system, a plan strategy? 

Dennis: So, I mean, the root of everything in this entire conversation has to do with a little bit of analysis and knowing what your metrics mean. Now, I hate using the word metrics with clinicians, but especially with teams. I use success factors as my replacement for key performance indicators, if you will. 

Brian: Lipstick on a pig, Dennis, lipstick on a plate. 

Dennis: It is. But if we're doing a great job, it's possible to measure the actual impact of that great job, whether it be a hygienist, an assistant, an office manager, a doctor, an owner, an associate, anything. There are success factors that we can directly point to that determine whether or not the standard of care is financially viable.

Now, the beauty of your business model is that really, if you take great care of patients, a lot of other things take care of themselves. But in this environment, especially with PPOs not keeping pace with inflation, we've got to have a deeper discussion with our patients about what does that really mean. 

And we have to show them what great work really looks like, because we all get in the habit of doing the same thing we do every day, but we're not necessarily educating the people that are benefiting from that. And that's a process that needs to be undertaken every practice in America. 

And getting out of insurance isn't necessarily the right answer for everybody. You can basically be all PPO, you can be a blend and accept limited PPOs, or you can be totally fee for service. And what tells me which direction to go in is number one, the doctor's vision, where do they really want to be? But number two, what are the numbers actually telling us? What is the proof? Because a lot of times we act based on our feelings and our emotions, not on the evidence that's readily available in your software when you know where to find it. 

Pam: Oh, yeah. Do you want to hear something? This is when you said we act on our feelings. I acted on my feelings. I was so angry. So I had a patient. 

Brian: At your associate? Were you angry at your associate? 

Pam: No, I was not angry at my associate. I was angry at the universe. So I buy my practice in 2014, probably 2015, 2016, a patient returns to my practice who had been provisionalized. Her full mouth has been provisionalized by the previous owner. 

And so it wasn't even a discussion on the care that she needs. Like, her full mouth was provisionalized. We needed to provide her with a full mouth reconstruction. And so it got dragged out. She ended up needing some teeth extracted, you know, and it ended up—it took us a few years to get it done because of surgeries and everything else.

In the middle of that, she decides to pick up a plan. So I get to do her full mouth rehab, and as soon as it's done, I write her a check for $5,000 for overpayment because she was not part of a plan, and then she became part of a plan. And so I did her work and paid her. 

Dennis: And that can happen all the time. And unfortunately, in the state where you work, it's one of the few states that does not have an Uncovered Procedures Act. And so it's now the count is up to 44. New York will make it 45. The bill has been passed, but it hasn't been signed by the governor yet.

But that law actually gives you power to charge for services and to not have to cut fees based on what your insurance company says. And they're making an argument based on your contract with them, not on what your practice act says. 

And part of the challenge with this conversation between dentistry and the insurance world is that insurance companies are regulated by the State Insurance Commission. Who are you regulated by? The State Department of Health. Those two entities don't talk to each other. 

And so as practitioners and as people that serve you practitioners, we need to get out there and have a larger voice and really talk about what's going on in the business world, speak to our members of our House of Representatives and those things and really try to affect change, but know that anything you try to affect change on that involves politics and legislation of any way is going to take years. And I don't think we have years from most practitioners. 

Brian: So you did not talk about something. You talked about PPO insurance. We talked about fee for service. We didn't talk about Medicaid. How do you work with Medicaid clients, clients who take Medicaid? 

Dennis: I have a few, yes. And it's very dependent on states. Some states just can't do it. And so it depends on what the state regulations are. And, you know, what kind of dentistry you're doing. Are you a general doctor or are you a specialist? Most Medicaid states tend to support minors more than they do adults. Yeah. Even if they, you know, they both qualify under the same plan, but they have better reimbursement rate for minors, therefore pedo and ortho get better off. You know, pedodontics especially. 

Orthodontics is kind of an interesting model because there are—you're dealing with both the high-end patients that that's a choice, and those who really need the care.

Brian: So I think that's important that we have, I assume we have a lot of dental students who listen to this podcast and are always being told there's no money to be made in dentistry, and you represent a viewpoint of there is an amazing potential here to create a lifestyle for yourselves if you are willing to look at the true business model of dentistry from a unique perspective, where you capitalize on these advantages in certain key markets where there's so little competition, to what you're saying. 

Because I mean, I feel like you have the keys to the secret sauce in some way, shape, or form with your understanding of truly how the finance world intersects with the clinical world. 

Dennis: Absolutely. So let me ask a question. If there wasn't a huge opportunity in dentistry as an industry compared to all other industries out there, why would so much private equity be chasing private practitioners? Because the margins can be huge if it's run right. And there are really great private equity-backed DSOs. There's really bad ones. It's no different than individual practitioners that perform at very high levels financially and clinically on both sides of that game. 

But what we really have to start to recognize is the model is very viable. There are really only five key factors to making a practice really successful. The challenge is getting all of those five things to work at the same time. And that takes, you know, different insights, different way of looking at things. 

We have to change our perspective on how we look at our practice, on what we know about the numbers that, you know, we've all been sticking our head in the sand about and, you know, basically growing up and in the Wall Street world from 20-something on, it was all based on analysis. And yet we don't do any of that in dentistry. And why not? 

Brian: Well, Pam and I, we talk about that. We talk about measurement, we talk about metrics, and it just drives me nuts that we don't teach dental students to think in terms of quality improvement and improving systems and processes and their practices in dental school. We just teach them, do it just like this every single time, and you can predict success, instead of how do you—how do you improve the health of the population and get paid for it appropriately? 

What are the five factors? 

Dennis: Oh, so you always have to start with financials, and no doctor I've ever met loves having the financial discussion, but it's got to start there. Dentistry is a for-profit business in America. It should be profitable, but you've got to understand what those are. 

Your clinical scope and your clinical technology is next. Where are you going and what kind of practice are you going to be? And that's really—the sixth thing which resides at the center is what is your vision of who you want to be as a doctor, how you want to treat patients, and how do you want your practice to operate? 

So you start from there, then you go to finance, then you go to the clinical and the technology and the clinical scope of services you provide. Then you're looking at your business systems and processes, which I can't tell you how many doctors I run into that have no earthly idea what goes on in the administration side of their practice. And they need to have at least a basic understanding. 

They don't need to be a master at operating whatever their practice management software is, but they need to know that stuff. And then you have to kind of go through that whole process of getting the right systems in place so that things operate cleanly and smoothly. 

And that revolves all around your people. And I always start with the people. So you asked earlier, do I need to fix what's going on in my practice today, or should I look at my insurance today? I can give you to look at your insurance no matter what. But if you're going to successfully implement any kind of a strategy to be less dependent on insurance, you've got to start with your people because your people are what makes it all work and what makes it all happen. 

And this also connects to the insurance conversation because the one dynamic that we haven't started talking about in the industry is we're not the only ones that are shorthanded and struggling to find really great team members. Every business in America is facing that challenge. We're losing 10 million employees a year from the US workforce, and that's going to stay this way for a couple more years. Then it drops a little bit, but then it goes back. This problem is not going to go away. 

They're going to have to provide better benefits and better pay. These are all the people that are buying dental insurance. So at some point, the voice will tip and they'll start to listen to us and say, this is insufficient if we do a good job at education on the ground level. 

But we have to bring those two—it's a pretty wide gap. 

Now, I have kind of a unique viewpoint in that traditional medicine became aware of so much more interconnectedness between oral health and systemic health during the COVID years. Most patients never heard about it because it wasn't on the news because all we were talking about was COVID. But there was so much research done at that time that traditional medical doctors are now going, oh, wait, we need to do a lot of preventative stuff and work hand in hand with dentistry. 

And so I think that where all the verticals within healthcare have a chance to merge at this point in time and speak from a louder voice. And because I have so many practitioners that are building their own enterprises that I work with, that's basically what my group of national doctors are, that we are attracting medical doctors that want to get out from underneath the hospital system, that want to be less dependent on insurance from literally every specialty and general population you can imagine. 

Pam: So at some point, you mentioned having the conversation with patients and it's about education. Would you say it's simply about education? I feel like there's also a patient experience aspect to the care that they're receiving. We talk about having excellence in clinical margins and the actual care being of quality, but at the end of the day, it's the patient experience as well. 

And so I feel like I know we're running out of time here, and I feel like dropping out of participation isn't for everyone. But if it is, what are some attributes of a practice where you say, all right, I really should look at this because I am offering exemplary care? I think we all think we do, but some practices are going to be more successful in removing themselves from participation where others will not. 

Dennis: So, and you're absolutely correct. And when I mentioned that, as dental consumers, we don't have the ability to judge our standard of care. We are making judgments of you as a doctor based on our entire experience of your office. 

What does your website look like? Does your phone get answered on time? Do people return my calls if it doesn't? What does the reception area look like? Is your front office, are there piles of paper everywhere? Is it mass pandemonium? 

All these things really contribute to the patient experience. The most important one is the doctors and the other providers in the back office, their relationship with the patient. And what most of us miss is that relationship is communication. 

Between the three of us, all the communication that we're having right now is our relationship at this point in time. And so if we can all learn to become more effective communicators to interact with our patients in a different way, they become far more or less likely to depart even if we make a change on the financial side of things. And they become much more likely to refer other people and to accept care at a higher standard of care. 

So starting with that people component and that communication component is critical. 

And then if you're going to have the conversation about, do I want to drop insurance policies? And again, I think everybody should go look at a couple of key statistics and start thinking about it that way. That's not an overnight process. It takes a year if you're highly dependent on a particular policy or a particular program to keep your office successful. 

You have to do it the right way. And most practitioners out there today don't have that level of patient experience and just the overall communication skills to be able to navigate that. So you have to start there. 

Brian: Okay. You just said most practitioners don't have those skills. That's hard for a dentist to hear that they don't have a skill set, that there's something they need to rely on someone. So how do—what would you—I mean, I know you're a practice consultant, but you're like, you're like—I mean, you're your status as a practice because you bring so much more to just being a practice consultant than many practice consultants do. 

What would you tell a young dentist starting out who has this entrepreneurial spirit to build a dental model that's transferable that they can sell to grow a business? Understanding with your vision, being able, because I know you're looking strategically 30, 40 years from now, what's dentistry going to look like and how does the practice today become the market leader in that timeframe with kind of just a guess as to where we're going to go. 

What advice would you say to that young dentist starting out who's thinking, I thought I'm leaving dental school being taught how to be a clinical dentist, but I want to be an entrepreneur and build a business. What would you say to them? 

Dennis: First off, I would say that's okay because everybody else that's a great doctor have the same experience. But now, as you go into practice, especially if you're going to do it in independent business, you have to learn the business side of the business, which is where you find resources like our organization. 

But you have to learn it from one way, shape, or form. But it has to start, and I always start at the same place, is what is your vision? 

So if I was asked the two of you, where do you want your practice to grow? Do you really have clarity around that? And can you enroll first your team in that, and then enroll your patients of that, and be able to say it in an articulate way. 

But because of the industry I was in prior to this, I had tons of opportunities. I mean, the personal development, the leadership development was nonstop. And you don't have that experience or the ability to get it in your industry for the most part, which is why you have professionals out there that can fill that gap. And that's what I do. 

Pam: So speaking to that, this is just, I mean, to even call this the tip of the iceberg is just—it's minimizing the conversation. There's so much more to this conversation, and every practice has their own nuance, and, you know, and different states and different participation of plans and different margins and different everything and different team, different ability to be able to have these conversations with patients. 

Where can people find you if they say, okay, you know what, this is something I really need to look at, but I do truly need help and I do highly, highly recommend that if you are going to discontinue your participation with certain plans, don't go at it alone. You shouldn't go at it alone. And having a coach help you get through it is really, really vital for your success. 

Where can people find you, follow you, reach you, etc.? 

Dennis: I have multiple websites out there. I'm pretty easy to find on the internet. I'll go back to the comment about the comic books and the movies and God, I wish I got the dividends from all those things. I can't take a lot of credit for the name. I was born with it. 

But all you have to do is search Dennis Marvel. You'll find dennismarvel.com. You'll find Fortune Management. You'll find all the organizations that I'm involved with and all the people that work with people across the country. So it's a pretty easy search, and my cell number is readily available on those. So I'm pretty easy to catch. 

Dennis: It's in service to your profession. I mean, that's the only reason why we exist and why we do what we do is because you are such a critical juncture right now. And what happened in traditional health care, you know, I believe we can prevent that from happening in dentistry. And I believe we can actually reverse a trend that's been going on for 50 years. 

But the time is now, and the time for people to act is now. There's one concept I teach that we can kind of wrap with is that every time you find a place that you're in a crisis that feels like a crisis, we're feeling all this pressure, doctors are overwhelmed, they don't know which direction to go, there's opportunity there. 

And you just have to be able to figure out what is the opportunity for me where I am in my situation, and then you build on that. Because I have yet to find a time in all of my life where everything that felt like a crisis didn't present some kind of opportunity. 

Brian: That sounds like a superhero ending right there. Thank you. Thank you, Dennis, for sharing your your knowledge with this group. I think these are the kind of episodes I love because I feel like we got to—it's like sitting down with Stephen Covey. That's— that's who you remind me of. It's like sitting down with Stephen Covey. So thank you so much. And you can find him at dennismarvel.com. 

And it's now time for the inevitable, Pam. We need to tell everyone to go put your mask back on and press your foot down on the rheostat and generate some production.