No more relying on insurance, including PPOs, is something many dentists only dream of. But self-reliance doesn’t have to stay just a dream. Here are some steps to take toward dropping PPOs.
Dropping PPOs may sound scary to many dental practices, but I believe practices can become more self-reliant. The problem I see in dentistry is that oftentimes too much energy is focused on having a “third party” help to build a dental practice. This makes no sense to me because third parties do not care as much about your practice as you do.
What happens if a third party decides to decrease payouts to your practice, deny, or even reject claims? Needless to say, this becomes very stressful. Robert Kiyosaki, the author of “Rich Dad Poor Dad,” writes, “Today, doctors face financial challenges I wouldn’t wish on my worst enemy: insurance companies taking control of the business . . .”
As dentists, team members, consultants, and vendors in the dental industry, we see insurance companies controlling the foundation of our businesses, which is money and cash flow. I don’t believe all insurance is bad, but I believe strongly that the industry needs to become less reliant on insurance companies to build their patient bases, and that dental practices need to become more self-reliant.
When it is up to you and your staff to grow your practice, things willd begin to change. You’ll think more about quality, and you’ll actually look at your marketing strategies to learn what works best for you and what doesn’t. You’ll understand how to work your “machine.”
Tips to drop PPOs
I was recently introduced to Bill Rossi from Advanced Practices, who educates dentists on how to drop PPOs the correct way. Many dentists think they can just “turn off” the PPO “light switch” and all will be good. There have been some practices that have done this and survived, but it is a very risky move. Here are some strategies for dropping a PPO the correct way.
1. You have more power than you think
You are not helpless, and you do not have to sign up for every PPO that exists. Patients do not come to you based solely on the PPO you’re signed with. You have the power to build relationships and influence people, and this will give you a better chance toward becoming self-reliant.
2. Finding a balance
Mr. Rossi mentions that it is important to find the right balance of PPO participation. When a dentist has complete control over his or her fees, it is essential to have balance so that the fees are not too high or too low. This is where I believe in-house membership programs can be helpful to a practice looking to become more fee-for-service oriented.
3. Trimming back on PPOs
I agree with Mr. Rossi that it can be dangerous to cut all PPOs all at once. Instead, consider trimming back a little and then market your new membership program to your internal patient base and potential patient base. After you’ve done this successfully, proceed with cutting more PPOs as you feel comfortable and established with your in-house membership.
Building a membership program to become self-reliant
An in-house membership program can be one of your best tools to reduce your dependence on PPOs and to build self-reliance. When you offer a membership program your patients pay the practice a set monthly or yearly fee to access certain benefits and discounts that you offer.
When you have a base of patients enrolled in your membership program, they become more loyal and easier to manage through dental membership software. This is instead of dealing with insurance companies rejecting and delaying claims.
Another benefit of creating a membership program is having predictable recurring revenue. According to John Warrilow from the book “Automatic Customer,” this will allow your practice to become valued at a higher price point because of your predictability, plus, when you have steady predictable cash flow, it makes your practices more enjoyable to manage.
Renegotiating PPO fees
Renegotiating your existing PPO fees might also be a strategy that’s good for your practice. Ben Tuinei from Veritas Dental Resources says that a practice can gain back hundreds of thousands of dollars a year if it just takes the time to negotiate the PPO fees. Negotiating fees is an art, it’s true, but it is definitely a strategy practices should consider to help them become more self-reliant.
If you follow these simple tasks, your office will be more profitable and easier to manage. Feel free to contact me at BoomCloud Apps if you have any questions about quitting PPOs and becoming self-reliant.
By Jordon Comstock
*This article was first published by DentistryIQ. Republished with permission of PennWell Corporation. All rights reserved.