"Pearl of the Month" (Vol. 1, Issue 3)
Pertinent comments on the practice of fee-for-service dentistry.
by Michael Perry, D.D.S., President
What Does "Insurance Independent" Mean?
Does it mean your practice has nothing to do with insurance? When a new patient calls, would your telephone script be, "we're happy to provide the very best in dental care, but we don't deal with insurance companies?"
Does it mean you would be willing to help patients by filing claims on their behalf, but your terms would be: payment at the time of service and any insurance benefits are assigned directly to patients?
The definition I choose for my practice is more service oriented than either of these. My only condition for insurance independence is not to be contracted with any third party suppliers of patient benefits. To me a simple, but powerful idea. This sole guideline facilitates complete freedom to plan and provide treatment I feel is in my patients' interest and charge fees commensurate with my goals.
The lower volume of patients I treat creates a slower pace and the time needed to provide a high level of overall service. This includes helping patients with insurance processing and acceptance of assignment of benefits when possible.
Managed care contracts (of whatever type) limit dentists' charges for patient care in two ways: 1) limiting fees 2) limiting the procedures the dentist is able to charge the patient for. I find it is easy for dentists to overlook the latter. In a typical practice with a 75% overhead, a 12.5% reduction in charges translates to an earnings reduction of 50%. A 50% reduction means the dentist has to provide twice the volume of treatment in the same amount of time to gain the equivalent profit margin.
I have been insurance independent since 1999 and have coached numerous practices out of their insurance contracts. I have developed assessment techniques to determine if a practice is in a position to safely transition to insurance independence. In my experience, most are . . . some aren't. Even those that aren't, however, can usually develop a plan to position themselves for a transition within a few years.
In California, approximately 90% of dentists are contracted directly with Delta Dental. It is not unusual for 1/3 or more of the patients treated in a practice to have a Delta plan. With this in mind, it is prudent for a dentist to have a predictable strategy for engaging in a transition out of a contract with Delta. In my experience, use of a correct strategy and techniques limits the patient loss to 15% or less of the contracted patients. In a practice with 1/3 of the total patients having Delta insurance, the loss would be less than 5% of the total patient volume. The potential loss of earnings, however, is more than compensated for by the elimination of charge limitations.
If you wish to speak with some dentists whom I have coached through a transition to insurance indedpendence, please send me a request via e-mail.
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