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Consider a Hybrid Insurance Dependent-Independent Practice before eliminating your association with insurance programs.
by Doug Cast, DDS, FAGD
As our dental careers grow, so grows our experience. That experience comes in the form of learning how to deal with staff, treatment-planning, clinical skills, and even with insurance companies. OK, some experiences are more pleasant than others!
As our experience with insurance companies grows, so grows our anger and frustration. Quite honestly, the pace at which insurance companies change the rules and delay, downgrade, or flat-out deny treatment makes just about every dentist feel angry at the mere mention of the word "insurance."
That is why more and more dentists are taking steps each year to reduce or eliminate their association with dental insurance. However, far too many doctors take these steps based on a "feel-good" experience that they had while attending an inspirational lecture. Still others decide to follow the advice of a trusted mentor or consultant.
Before you take steps to eliminate insurance from your practice, carefully evaluate the ramifications of your actions. For, truth be told, there are pluses and minuses with whatever course you take — i.e., dropping insurance or taking assignment of benefits.
The decision to drop insurance should not be based on emotion. It should be made as a purely business decision. If you track treatment-acceptance rates in your practice, and your treatment-plan acceptance rate in an insurance-driven practice is below 50 percent, proceed cautiously before dropping any plans. You can be sure that any lecturer, mentor, or consultant who tells you, "Drop insurance from your office Monday morning!" or "Start eliminating some of the plans you participate in Monday morning!" is giving you very poor advice when they have no knowledge of your treatment-acceptance rate.
Improve communication skills
Low treatment-acceptance rates typically are indicative of a lack of communication or sales skills in the practice. A low case-acceptance rate on treatment covered in part by insurance benefits points to a need for additional training before you drop any insurance program from your practice. As a starting point, you can obtain this training quickly and affordably. We have found that Sandy Roth at ProSynergy Dental Communications (www.prosyner gy.com) or Dr. Paul Homoly (www.paulhomoly.com) are excellent sources for learning communication and sales skills.
If treatment acceptance is above 50 percent, then the first step would be to evaluate where patients are going to come from should the insurance-dependent patients leave your practice. Every business should evaluate a worst-case scenario before implementing a major policy shift.
You must have a marketing program in place before dropping or eliminating insurance program(s) from your practice. And, your marketing program must be in place long enough, in the proper venues, with the proper repetition, to pull in enough qualified patients to replace the insurance-dependent patients who leave the practice. Please understand that it does not have to be a one-for-one replacement. By that, I mean if you drop an insurance program and 100 of those patients leave your practice, you do not necessarily have to replace them with 100 new patients. If your marketing program is geared towards cosmetic and quadrant dentistry, you may find that five to 10 patients will bring in substantially more in production and collection to your practice than the 100 insurance-dependent patients did.
Keep in mind that marketing only educates, motivates, and gets the patients to call your practice. But it is the staff's communication skills that move the process forward to scheduling an appointment, motivating patients to show up for the initial exam, and getting treatment scheduled and paid for. This is why it is so critical to have analytical data that measures the success of your communication skills.
Let's move on and say that your treatment-acceptance rate is good (but you should always take steps to improve it). Let's also say that your marketing program is effective in building your image and getting patients to call for quadrant and cosmetic dental procedures. At this point — and only at this point — are you ready to reduce or eliminate insurance from your practice. But is it a sound business decision?
Perhaps yes, perhaps no. Let me preface my argument by saying that I personally loathe insurance companies. I think their careless and insensitive business practices often- times border on the criminal. But as comedian Dennis Miller often concludes after one of his rants, "Of course, that's just my opinion — I could be wrong!"
Making a sound decision
Now that my true feelings are on the table about insurance companies, I pose the question again, "Is dropping insurance a sound business decision?"
Ready for the answer? Here it is ... KIND OF!
I know that when we get all hyped and excited about dropping insurance plans, we are told to start the process with our existing patients by no longer taking assignment for hygiene. Then, we take an even firmer stand with new patients ... and the patients go elsewhere! We justify this by telling ourselves, "Oh well, they don't fit into our practice philosophy. They aren't the kind of patients we want anyway!"
Patient numbers continue to decline, and, with them, go their referrals. Yet another dental practice calls requesting copies of charts of long-standing patients of record. The doubts creep in, the stress creeps up, and the income drops. You hear more "stories" of other doctors who succeeded with this approach. You begin to think it's just you who can't seem to make it work, and the stress creeps up further.
A major point to remember is that when you defy consumers' expectations, you minimize the likelihood of building a successful business relationship. When you do so at the beginning of the sales process, you eliminate all chances of having a successful relationship with that consumer. Worse still, you also lose an opportunity for that patient to become a future referral source for your practice. No business knows just how dramatic the financial losses are from not meeting consumers expectations over the course of several years. But, it is devastating to realize the true financial impact of losing customers.
Now, examine the flip side of this decision and how insurance companies handle low-fee claims. Frequently, such claims are paid in a very timely manner, usually within a month. The claims are rarely denied and they are rarely lost, or, as the insurance companies so often say, "never received." In the majority of cases, payment for examinations, radiographs, and hygiene care is not a problem in dentistry. It's the big-ticket items that create the problems, not the little ones.
Offer financial options
The good news here is that most consumers already are conditioned to pay or finance big-ticket, elective items. So, in the HIIP office, patients are given several financial options to help them pay for the type of service they want and to fit it into their monthly budget.
The HIIP model also shows patients that you are not punishing them just because you don't like their insurance company. Your financial coordinator could explain it like this: "Mrs. Jones, we have found that on some services, such as exams, X-rays, and cleanings, your insurance company is great. And we are glad to accept assignment from your insurance for these services. However, we have found that when the service costs more than $xxx, your insurance company tries very hard to either not pay for the level of care you want or to put off paying us for several months. If we have to wait many months to get paid, we have to cut corners just to financially survive. That's not fair to you. Because the service you told the doctor. you want comes to $xxx, it will be necessary for us to arrange a method of payment. Would $xx per month fit into your monthly budget?"
You can obtain treatment financing for your patients immediately from www.enhancepatientfinance. com. In addition, there are other patient-financing programs available. But the key point is that this dialogue with patients should take place after they have had the opportunity to spend ample time in your practice and you have created value in their minds for the services you offer.
The sample dialogue in this article is for illustrative purposes only. This dialogue is not intended to be memorized and regurgitated back to the patient. Understanding the concept of the dialogue is vastly more beneficial than mere memorization.
Have all your ducks in a row
Practices that drop insurance programs and implement a multi-faceted marketing program before carefully evaluating the efficacy of their communication skills usually go through a period of decline. Unfortunately, there is no quick fix to this problem. If you turn around and change the policy yet again, you are sending a confusing message to your patients and former patients.
The decision to drop insurance programs before evaluating communication-success levels and implementing a marketing program almost always means that the practice will have to go through a period of rebuilding. In this scenario, I would suggest that doctors re-evaluate their relationship with the mentors or consultants who advised them to drop the insurance programs. The success of almost all businesses comes down to 1) communication and 2) marketing. Without these two practice-building tools in place, dropping insurance programs is predictably an improper decision to make.
Once communication-success levels are optimized and a proven, multi-faceted marketing program is in place, this may be the time to build the Hybrid Insurance-Dependent-Independent Practice. When doing so, accept assignment of benefits for those services that are traditionally not opposed by insurance companies and are paid for in a timely manner. Continuously build value and trust with new and existing patients. Find out what their wants and needs are, and then offer ways for them to fit these services into their budget.
A business model that allows for consumers to get to know the business and that builds trust and value is exponentially more rewarding in both the short and long term than a business that places a roadblock early-on in the buying process.
Remember, roadblocks are designed to slow people down and stop progress. The HIIP model is designed to reduce or even eliminate roadblocks and create opportunities for the dental practice to thrive.
The patient perspective
Earlier, I stated that prior to making a major policy change, you should carefully evaluate your worst-case scenario. To do this, you need to think like a patient/consumer for a moment.
When employers offer insurance to their employees, they state it as a "benefit." And people buy benefits all the time. In fact, most everything we all buy as consumers are benefits. From cars to clothes, to food to vacations, and from physician to dentist, we all buy benefits.
When it comes to elective health care, consumers instinctively know that, in most instances, it is not an insurance benefit. Breast augmentation, face-lifts, hair transplantation, liposuction, laser-vision correction, and cosmetic dentistry are, in most cases, not covered by insurance. On some occasions, these procedures may be partially covered by insurance, especially cosmetic dentistry that includes caries removal or replacement of old, worn-out dentistry. But, for the most part, consumers are conditioned to expect no third-party financial support.
So here is where the Hybrid Insurance Dependant-Independent Practice (HIIP) comes into play. The entire HIIP philosophy centers on consumer expectations and values. Patients expect their insurance "benefits" to include routine checkups and cleanings. They also expect that elective procedures will not be covered. If they want to have an elective procedure, they know that they will have to pay for it, usually upfront or through some type of financing plan.
In the HIIP model, the doctor accepts assignment of benefits on low-fee services. There are several reasons. First, patients expect that you will! These expectations are the result of years of dependency on dental insurance. If you don't take their insurance for cleanings and exams, plenty of other dentists will. Secondly, when you accept assignment of benefits for exams and cleanings, you avoid giving a patient a reason to say no early in the buying process. And this is even more critical for new patients.
Every interaction consumers have with the doctor, staff, and office environment should be designed to educate and inspire them about your services ... to build their trust and, most importantly, to create value.