How To Drop PPOs in ONE DAY!?

What's up everybody? Welcome to another exciting episode of the Navigating Dental Insurance Podcast. I am your host today, Jordan Commtock. Today I got a good friend, a guest. Uh we're going to be talking about a uh a concept or a thought that I think a lot of consultants tell a lot of practices out there that you can't drop PPOs right out of the gate. You got to do it strategically and slowly over years of time. But today we're going to hear a story from Dr. Eric

Chatterley uh from CTC National. He's going to tell you how his practice cut PPOs in one day and I'm excited to hear this story because nobody talks about this in dentistry. So Eric, welcome to the show, man. How you doing? >> Good. Thank you for having me on. Um yeah, excited for this conversation and uh hopefully help somebody out there who's looking to drop insuranceances at some point. >> Yeah. I know. I love this. So, how long have you been in dentistry? How did you get

involved in CTC National? Kind of walk us through our audience like what is CTC National, all that stuff. >> Yeah, absolutely. So, uh I went to dental school, graduated in 2011. When I came out, I did an associate for three years in that practice. I ended up purchasing that practice. The selling doctor worked back for a year for me and then I worked for another 10 years as a solo practitioner. uh during that time period grew practiced over 3,000 active patients. >> Nice. >> Hygiene schedules

booked out over six months solid. Operative was booked out over four months. Uh at one point had to stop taking new patients because we couldn't support the demand. >> Uh but never spent a single dollar on external marketing. It was all word of mouth referral. >> Fantastic. >> So about two and a half years ago, I just kind of felt called to uh sell my practice and provide better support for practice owners. It's it feels like it's more challenging to become a practice owner these days.

And so through CTC National, we we offer buyer representation, consulting services for startups as well as consulting services and and coaching for the first years of practice ownership or any any point in practice ownership for that. So we just want to help them become more successful. So that's great. >> Using my background in transitions, I've worked with our parent company CTC Associates. Yeah. They primarily work with transitions uh both on the seller and buyer side. I worked with them for about seven years prior to dental

school. Uh so I have a pretty good background uh to help you know in this regard. So yeah. >> Yeah. Very cool. So uh no thank you for that. What um when you got into dentistry like as an associate and then bought into the practice, was that practice a were they po heavy? >> Super PO heavy. They kind of did a quasi startup um a couple years, two or three years before I joined and so they were a network with a ton of insuranceances. Umbrella policies

um I don't even know the names of half of the insurancees anymore. >> That's a good thing. Yeah. >> Yes. Very insurance heavy which the advantage to that is it can help your practice grow faster. So I'm actually a huge advocate for being in network initially if you're looking for growth especially accelerated growth right uh but it's not sustainable to stay in network with all the insurance >> I think the stat today is what uh dentistry is growing by 1.4% 4% in revenue and costs are

growing by 4.9% from the ADA their latest report from earlier this year. So yeah, I typ I typically uh uh blame the PO, right? You can't really increase your margins or your topline revenue because of the contracts um in an inflationary market. So yeah, a lot of practices get squeezed if they stay in PPOS's too long. So, let's talk about it like what every consultant out there I swear that comes on the podcast that you know I chat with I even been I've said hey take

it easy like don't go out in in in one day be strategic about it right everybody says this and I have my own you know strategy to help practices but I'm really curious to hear how you did that and like your thinking and what the practice is like cuz I'm I'm sure not every practice could do that. There's got to be some criteria, I would imagine. But what made you do that? Like I I mean, I've heard stories from even my client base of practices that

are like, "We're cutting them tomorrow." I'm like, "Okay, sweet, dudes." So, walk us through the mindset of like how you got there. >> Yeah. So, a few years before we even made this decision, my sister Marie, she's been in the transitions business and startup business for 25 plus years. She's like, "Eric, why don't you drop insuranceances?" I was like, I I can't I'm too afraid, right? Like everything is driven by fear and that's the main reason why most people don't make that decision because they're afraid

to lose patience. They're afraid their production is going to go down. All of those things, right? So, it's approaching that from a fearbased mindset. It's all about the uncertainty. I have no idea what's going to happen, right? And so, >> um, for me, I had to get to a point in my own practice where I was okay with losing patients. Yeah, >> you have to have the mindset to just say, you know what, if I lost a thousand patients, I'm going to be okay. And so

I actually uh enlist in the services of a consultant to kind of do an evaluation of my practice and he's had experience with it. So I got some insight from him about, you know, how the practice looks and how healthy it was and, you know, the realistic thing that we might expect if we were to do this. To me, I actually got to a point where I was just tired. I was like, man, I I feel like I'm working hard. I'm working extra days. In fact,

at one point I was working five and a half days. I was working some Saturdays and >> man, yeah, >> what am I doing? This is not why I got into dentistry. But the practice was just thriving. Like we were doing so well. But the the important element of this is you have to build a practice where there's a high level of trust. >> Yeah. >> You and your team and your patients. >> If you don't have that trust and loyalty in place, it makes it

more challenging. Not to say that you can't do it right. >> Yeah. Sure. But you want to make sure that you approach your practice ownership experience from the light right leadership mindset. Making sure your team trust you and your patients trust you. >> Well, and if you think if you're a reader, there's the book five dysfunctions of a team. I don't know if you've ever read that book, but the foundation of a good team is trust. >> Yes. >> Yeah. >> Right. And so that that's

one of the elements I coach on in helping practice owners understand how trust is really what the most important value in a practice. And so >> uh for me I needed to adopt the mindset that I was okay with losing patients. >> Um I had some confidence in somebody that's been there before. So he's done this and helped other practices do it. So, I was I was trusting him in this process and he was just like, "Eric, you know what? You could do this different ways

if you want to like strategically remove them one at a time." He's like, "It's a lot more work. You have to go through the same dialogue every single time you drop us an insurance plan." And as he's talking to me about like doing this in phases, I'm like, "This sounds like a nuisance. Like, I don't I'm not excited about that at all." And he's like, "If you want to, you could just drop them all." I was like, "Really?" He's like, "Oh, yeah, absolutely. I I feel

confident you could do that. So, I basically just took his word for it. And I'm telling you right now, like I have zero regrets about it. Like, in fact, it's the one business decision I wish I would have done a lot sooner than I did. >> I wish I would have done it years before. >> And um I, you know, with the fear of losing patients in that first like one to two years, >> we maybe lost 200 patients out of 3,000 and most of them

came back. >> Wow. Oh, that's >> especially if there was an alternative of something they could use to still go to our practice. And this is where when you think about like a membership plan comes into play. >> Yeah. >> If you have something else they could utilize outside of their insurance >> and they trust you and there's that loyalty there, they're definitely going to find something. And that's what everybody was doing. They're like, "Well, you know, what else can I do? What other options are

there? I want to stay in your practice and I'm actually still willing to pay a little bit more to do that." Um, and there's obviously a right way to go about doing that. There's certain communication language you need to use, >> of course. Yeah. >> Really practice has to be on the same page. Always love to talk more about that. But ultimately, you have to overcome the fear. That's like the one thing. >> I got a story around that. Like years ago, I was speaking with

Gary Takis and we were we were doing this like little study club is over here. I think it was at the dental intelligence building just down the street from me here in Utah. And you know, I don't if you know Gary and how he speaks, he was talking about like, you know, cutting out PPOs and doing it strategically, all that stuff, right? And I could I was sitting next to a doctor from Texas and like he he looked like he's gone white, you know, like he

was stressed. He like he was like physically feeling fear and sick thinking about dropping a PO. And on the break, I'm like, Dr. Anderson, like how you doing, man? You seem stressed. I'm sitting next to you. like I can feel your stress, right? It's like physical now. Um what uh what's going on in that brain of yours, right? And he's like, Jordan, man, if I drop one PO, like it's over for me, right? Was his mindset, the fear mindset, right? >> Of course, with what you

know, with what I do and what BoomCloud, my company does is they uh I said, "Hey, don't think about like dropping one PO right now." like build a a membership plan, generate recurring revenue, and then start dropping, right? Once you get a little bit of practice there and some recurring revenue from your membership plan in, and that eased his mind. But if you're saying, okay, if if there's demand, if you got patient demand, like you said, you were booked what, 6 months out? >> Yeah. >>

So, that's a high demand practice. If you got demand, you probably have more control than you think, I would imagine. So, walk us through like like mindset wise, how did you prep your team? How did you give them the tools to speak around this? I'm I'm curious. >> Yeah. The most important thing that the team needs is they need to understand the value for them by making this change. Like what does this do for you? >> Yeah. >> Does it give you more freedom? Can we

offer to pay you more money? Whatever it is, right? Like you got to identify what that is. So you ask them like what would you love to see differently in this practice uh if we make this change right? So when they start to recognize like oh yeah like this is going to be a better experience for me that's when they start becoming on board because they have to be on board through the process. >> So helping them have a vision for what that would look like

for them. >> What were some examples like your team members said like what did they say? >> It's kind of crazy because I was expecting like man I wish I had like $5 more per hour or whatever. the things that were coming up was like, man, I would love to have like a new dental chair or I would love to have the walls painted in my operatory. You know what I mean? Like I wasn't expecting stuff like that, but to them that was a big deal.

And it's like, yeah, we can absolutely do things like that because not only are we going to be making more money as a practice, but we're going to have more freedom to do the things we want to do, offer the treatment that we want to offer. Like, we have control over the experience that we create for our patients. >> Yes. I love this. >> Better for everybody, right? And then we have more flexibility. So, if you guys want to take more vacation or whatever, you know,

we can do that. Like, there's so much this offers beyond just >> trying to potentially make more money. >> Yeah. No, that's that's really interesting. And I'm sure like I'm sure like your relationship with your patients too evolved instead of like years ago, you know, I used to manage my dad's dental lab and I remember getting one lab slip that's like like burned into my skull. It says, it says, it said, "Please fabricate the cheapest crown possible due to the patient's PO plan." Right? It's horrible,

right? It's so bad. And I'm like, I remember reading that and and being so frustrated. One, because if I were that patient and I saw the doctor writing something like that about, you know, imagine if it was like a a heart surgeon. It's like, "Please put the cheapest stint or whatever in this patient's heart." That was not good, right? That's not a good mindset. So, I would imagine too like >> you you probably could hire the best labs. You could probably get the better quality materials,

right? To to provide better quality uh services to patients. I would imagine that was a huge shift uh too. >> Yeah. In a lot of different way. What it really created for us was more freedom. I talk about five freedoms. Freedom of time. You have more time to do things you want to do. You can take more vacations. You have less stress financially. >> Uh more freedom of money obviously, right? Financial capability. You don't have the stress and pressure that comes from that. Uh more uh

freedom from stress, >> which is huge, right? >> Advent stress with insurance companies, all that. >> Yes. I was working fewer days per week, making more money. >> Yeah, that's a good that's a good thing. >> How is that not going to, you know, alleviate stress in my life, >> right? uh the better relationships that you're going to have with your team members, especially with your family, with your patients, everybody. And then freedom to kind of pursue whatever purpose you feel like you have in life,

whatever that is. >> We were more capable to be able to offer more >> uh charitable, you know, treatment for patients, do things like that. So, >> so many benefits that come from it that, you know, I can't imagine doing it any other way, >> right? Yeah. I'm a huge believer of this. Um, I mean, I've been doing what I do for some time because of when I was at the dental lab, the stress trickled down to us, right, managing a dental lab, you know, cuz

the dentist would call us every week and be like, hey, can you discount your fees cuz we're not going to make any money on this denture case. And I'm like, I didn't sign the PO contract, bro. You did. You know, I'm like, we got to get rid of these PPOs, right? At the Because it would trickle down to us at the dental lab. That was a lot of my frustration in the early days, you know, when I, you know, entered into dentistry. I'm like, "Holy smokes."

So, yeah, I'm I'm passionate on on helping do exactly what what you're doing. So, did you guys have So, you had patient demand. You got team buyin, right? Which I think is beautiful how how you how you uh structured that. What's in it for like the the channel everybody tunes into is like W I FM, right? What's in it for me? So, excellent job like getting your team around that and and getting them seeing the vision. Um, I think that's really cool. What did you guys

implement like a patient membership program before after? Did you do any of that? >> So, that was the only mistake that we made in all of this >> cuz I I wish that we would have done a a membership plan. >> Uhhuh. >> Because I think there would have been so much more value what we're able to offer our patients if we had that in place. >> Yeah. Sure. >> Like I if I have any suggestion and the way that I approached it that I would

have done differently. That's the number one thing I would have made sure we implemented even before we made that decision. >> Yeah, sure. >> It would have been it would have made everything a lot smoother, a lot less stressful >> and uh it gives patients another option. Patients want options, right? To be able to choose something, right? And so when their options are limited, sometimes that's stressful for them. And so that was some of the feedback I got from the patients that >> that process for

them was a little bit stressful. They still stayed with us because the loyalty was there. >> Sure. It would have been so valuable to have that in place. >> Yeah, that's interesting. Would >> made that whole transition smooth. >> Well, I always say like a dental insurance is kind of silly to me because it's like a coupon that everyone pays a subscription for. That's a limited coupon >> and then and then um it's uh it it really like constricts the patient's mindset. But if you really

think about it, like all dentistry really needs is is financial options, right? like a membership plan >> and it's like oh you may need a crown um and maybe you do a payment plan if you need to like through financing. >> It's like that's all dentistry really needs. I don't know why it's so we've comp we've complicated it by inserting a third-party payer to put red tape all over our practices and then throw it in the stock market right as they're holding it and they grow

it all. You know, they do all sorts of weird things with it. But I find it interesting because anyone can go see the dentist at any given time for any reason whether they have insurance or not, but patients sometimes have that weird mindset. So, no, that's really great. So, um, implement a membership program that helps with loyalty and option like giving the patient financial options, which I'm a huge believer obviously as well. Yeah. What? Um, okay. So, verbiage wise, like did your team have to relearn

like how to speak in your practice to patients >> a little bit? Because before it was like we were letting insurance dictate to us the type of treatment that we're >> Yeah. >> So dumb. >> We had to like go to, you know, sit down and kind of calibrate our philosophy about care. It's like, well, let's stop talking about what insurance is allowing us to do and let's start talking about what we truly feel is in the best interest of our patients. Yeah. >> So, it

did take some time to get acclimated to that. But as soon as they did, they're like, I love this. I love just being able to talk about treatment and not worry about, >> you know what I mean, like what insurance is going to say or what they're going to cover, all those things. Like, that's irrelevant. Let's do what's in your best interest. When you talk to your doctor, like your physician or surgeon, you're not like, hey, you know, let's only do what insurance is going to

do. You usually go with whatever they recommend, right? Like, >> yeah, absolutely. >> You can do surgery. be like, I want you to do the best possible job because I want to come on the other side of this, you know, feeling good and healthy, right? >> Yeah. And then like you think about like oral health and it's like you're going like this every day, right? Would you want the best quality and you don't want problems? That sounds like a nightmare. Like I saw the dental lab

side when patients have problems whether it's like dentures or crowns or anything, right? All on fours, whatever. Like that's really really really painful and annoying. Like why not just do the quality, right? Why do the cheapest fabrication possible? That's stupid. >> Yeah, I agree. >> What are your thoughts on like patient financing? Is that a tool you guys use too when you went out at when you went fee for service? >> Kind of just like created our own financing thing in house. >> I wish we

would have had somebody else do that too cuz yeah, >> that's not our expertise. And I'm actually a huge fan of working with other people where that's their specialty and not you trying to do that all on your own. So find the right person. Uh financing is a great option because sometimes a patient might have a lot of treatment that that they need to get done. >> Yeah. >> And they might have a challenge affording it all at once. So if they can offer some sort

of financing, it's just another great opportunity, another great option to offer to patients. >> I think so too. Like when I think of just the just the payment options, it's really important. Um you got the membership plan. I say you you can do uh like at least with our technology, you can do payment plans on treatment that aren't financing. It's just a payment plan. A short payment plan is typically what practices do. And then for like the bigger cases, then then you have like financing to

help out with that. Those are kind of the three tools that I would use in in most practices, especially ones out of network. But um no, that's really good. So, okay. How long did it take to adjust? Like one day you're like, "Okay, let's do it. Let's go. Right. Like how long did it take to adjust and was there like what were some of the because I've heard like I have a good friend that uh that uses uh BoomCloud. They have a thousand active membership patients.

They just dropped Delta and went fee for service and all their plans uh at the beginning of this year, right? With a thousand membership patients, right? Which is like 40 50 about $50,000 a month in recurring revenue. uh automated automated automatically collected right >> what um how long did it take you to adjust I know with my point was they had all that and they're they're still adjusting with the decision they made right it's it's not it's not always uh like the grass is greener type

mindsets like you still have challenges any business does no matter what strategy they do like what were some of the challenges you saw and how long did it take you to overcome some of those >> well ironically one of the main challenges we had before we dropped uh insuranceances. >> Uhhuh. >> Was how busy we were. >> Sure. Yeah. The six month. Yeah. >> I was hoping that was going to change and it didn't. >> That's crazy. >> We were still just as busy for those

couple years afterwards, three years afterwards as we were when we made that decision. So, um I would say adjustment period. The here's the nice thing. The one thing that we noticed immediately afterwards, uh, income went up significantly right away by about 20 to 30%. >> Fantastic. >> And my my co my consultant told me that. He's like, just so you know, like because I was a little bit nervous, he I think he charged like 25 grand for his assistants to do all this with me. >>

Sure. >> Like I've never spent that much money on anything. like, you know, he he he charged like $5,000 $6,000 for just the evaluation initially and another 20,000 or so to work with him. I made up that difference in the first two months. >> That's so cool >> for making that change. So, >> he's like, "Listen here, Eric. Uh, by the end, after I'm done with you, you're going to buy a yacht at the end of this year." Like as far as adjustments, I mean like

it didn't feel like there was any major adjustments that needed to be made. It was like there was little things about it, but >> I didn't practice any differently. Like the way we ran our office was very similar. >> It just provided more opportunities as time went on. We did have to kind of like fine-tune our dialogue with patients and know how to go about doing that. >> And there's probably good strategies to go about doing that. I can I'm always happy to share how we

did that. But um yeah, it just really like a year into this I'm thinking why didn't I do this before? Like this was such a no-brainer. >> Yeah, that's what I keep hearing from a lot of practices that >> I mean obviously you want to make sure you're the right type of practice to do it. Like if you're not in a good position if you do have a membership in place though, absolutely. There's no question in my mind that you'd want to do something like that.

>> What le let's walk through the city that you practice in. Like was it a big city, a small city? like walk us through that real quick from a >> uh it's a Denver metro area. So, it's a a suburb uh in the Denver metro. Um interestingly, the the demographics um a pretty good income level uh you know population in that area, >> but uh that doesn't necessarily translate into people valuing their dental care. >> Yeah. >> And what what they you know have to invest

in something like that. So, uh, a lot of it has to do with just education, educating your patients about it and helping them understand the value of what you offer. >> And once they see that and recognize that, then it becomes, you know, a no-brainer type process. But, um, you would have to to consider uh, each situation, I think, individually depending on what they're going, you know, what what their situation they're in, type of practice that it is, and how healthy it is. Um, but that's

what that's what I help practices do. It's like how do we help you grow beyond capacity? It feels like beyond capacity so that you don't feel stretched by making this decision. So if you lose some patience, it's not going to put too much pressure on you. So focus on growth first. Second, make a change. With membership plans, I think you could do this far sooner than I ever did. >> Wow. >> Years before I would have comfortably. >> Yeah. So you ran your practice for 10

years. Like how long in that 10ear span did you say I'm out, right? Was it a few years in towards the end? Like what what what was the the >> with the insurance >> with Yeah. So you you own you ran your practice for 10 years and then exited insurance. Was that right at the beginning of ownership or middle or end? >> It was about threeish three and a half years before I sold the practice. >> Awesome. And >> move. >> Here's another question. And when

you did that, did that help with the practice valuation when you sold? >> Yeah, so at the time I was collecting I'm a pretty conservative dentist. So, uh, at the time I was collecting about $950,000 before dropping insurance. >> Okay. >> I didn't change anything to practice as far as like the type of treatment I was doing or anything like that. It was all the same. >> Yeah. You were not just cutting to cut. >> This was purely insurance decision, right? >> Yeah. >> Three years

later, my collections was about 1.7 million. >> Okay. What is the rate? What is the difference there? You're at 900ish before >> 950 I'd say maybe close to a million. >> Okay. And then it went to say the number again. One did you say? >> Just short of 1.7 million. >> Wow. That's massive. And you didn't change patient flow remained the same. You how you treat you you how you cared for the patients. >> Yeah, we didn't change any of that. >> Wow. That's >> in

fact and I was working uh less in the practice as well too. So few hours. Jeez, a lot of benefits when you have the right criteria of practice. That's f that's so fascinating. That's really cool. So, and then I would imagine the what made the the next buyer interested was that it was already fee for service. Is that kind of did that help when it came to >> Yeah, that was definitely very appealing to him. I had a lot of people that were interested in my

practice. Um, I'd >> imagine. >> So, that was a great opportunity for him to step into that situation, not having to worry about insuranceances and all that. Yeah, you you did them a favor. >> No, no, that's so cool. Okay, so let's talk about this. You're you're now coaching and helping practices. Maybe do this, maybe do whatever they're needing help with, right? What um walk us through what that looks like. Talk talk about CTC National and your approach on helping practices and then we'll we'll talk

about where people can find you and reach out for you. >> Yeah, absolutely. So, um, I love to help with bio representation and then coaching in that first one to two years of practice ownership. I I like to be able to help people get to the point where they don't need me anymore. I want to teach you everything I know, >> teach you certain principles to live by, govern yourself on how that looks, whatever that is, >> and then kind of go from there. >> I

also love helping dentists that are really struggling, like on the verge of wanting to sell their practice, kind of hit rock bottom. >> That's more my pay it forward opportunity. When somebody's in that position, I love being able to step in and help somebody turn around. I've had people literally on the verge of losing everything and turn it around and they're in a much better position right now. One guy's got 70 new patients per month and just doing incredibly well in his practice. And he was

almost about to close his doors and file bankruptcy in his practice. So, >> wow. >> Um, I I love helping anybody in that regard. Insurance, same thing, too. I don't specifically do the consulting like others might do in regards to dropping insurance. >> Yeah. >> But if you want a strategy on know to know how to grow to the point where you're more comfortable doing that. >> Yeah. >> I'm happy to help with that. But I love working with new practice buyers. >> Uh they just

seem to be uh more willing to be coached. >> Yeah. They're hungry. They're probably hungry, humble, smart, you know. >> Yes. Yep. Exactly. And so, uh, and I love being able to get in that point, too, to help teach them things about leadership that are really, really important to start off. So, when you buy that practice, I can't tell you how many practice owners are reaching out to me one to two years out. I've never worked with them. One to two years out and they are

struggling big time. They bought that $ 1.5 million practice. They have no idea what they're doing. They don't understand why the numbers are going down. They're losing patients. They're losing team members, right? So, like, I want to get to them before that. >> Yeah. make sure that we're setting them up for success. And uh there's different ways I can approach that with them, too. And in fact, I'm even >> looking at opportunities now to buy practices with them and then when they're prepared, they can take

over ownership after working with me as part owner, three years. So, >> yeah, that's a great idea. That's really cool. Okay. So, how like we got listeners, right? They're listening. They're like, "Man, I like what Eric is serving." Eric, how do they find you? How do they reach out to you? What's the website? >> Yeah, so CTC.com is our website for ber representation, startups, and consulting. I also have a separate website, ctc-pathways.com. That's more for your dentist who's probably been out longer. Talks more about how

I can help them in that regard. >> Um, anybody can reach me via cell phone. I'll give that to you here. 303-2420277. >> Sweet. Uh, you can email me. It's eric e r i cctc-pathways.com. So, uh, I will offer anybody a free consultation just to see if it even makes sense. And if I'm not the right person for them, I have a huge network of individuals I can connect them with to make sure they get the help that they need. >> So, cool. Uh, Eric, I'm

going to make sure all those uh, resources, websites are in the show notes. So, anyone listening, scroll down the show notes. you can get access to Eric and and his team and what they're doing. I think it's so awesome. Eric, I like I want to bring you on again and keep talking about this like in an ongoing series. I think this is such an awesome topic that you brought to the table here today. Um, you know, so I really appreciate you coming on and hanging out

with me for a little bit on the show. Uh, any any last thoughts or advice you have to our listeners? This is kind of one thing I just want all buyers out there to hear. Whether you work with me or not, when you're buying a practice, the most important thing you're buying is goodwill. >> Okay? >> So, everything you're focused on is maintaining that goodwill with the selling doctor and with the team and the patients that are there. Just remember that. >> Yeah. Fantastic advice. >>

Awesome. So many good golden nuggets for you today, Eric. Uh, with that said, I hope everyone just has a rocking day. Light.