Adopting “Un-Insurance” – A Dental Practice’s Patient Benefit Plan
Dentist Examining Little Boys Teeth — Image by © Royalty-Free/Corbis[/caption]I’ve come to know one of our dental practice clients fairly well over the last 4 years. Dr. R. was one of the clients that my partner used as the “deciding factor” in our merger of client responsibilities, in that if I could work well with him and his specific needs, I would pass the test to manage the entire client base. Spending time at a Bruins game during tax season also did not hurt in getting to know him. Now we talk all the time, as Dr. R. wants to get my opinion on anything financial, whether practice-related or of a personal nature. It’s a good feeling to be trusted to impart my wisdom, and he values the discussions we have. I always thought our conversations were slightly one-sided with my listening then providing the advice.
Part of our discussions relate to marketing to both current and prospective patients. The goal in any professional practice, whether in dentistry, veterinary or human medicine, is to (a) get patients in the door who need your care and (b) are willing to pay for that care. Entire industries are in place to help secure both fundamental concepts to your practice’s financial success, but sometimes the fit is not right. New patients may come from the web or referral sites, but their dental insurance plans may have high deductibles, those with poor credit may not qualify for CareCredit, or credit card and CareCredit balances may be fully utilized. Whatever the story, you suddenly find out the patient’s financial limitations to your proposed treatment plans. Or your practice staff may be under the spell of “financial hesitancy”, what Bete Johnson, CareCredit’s Director of Business Development, says occurs with empathetic and caring dental professionals who may put themselves in the economic shoes of patients and possibly derail a practice’s generic financial policy already in place.
Here is where Dr. R. came up with a mini game-changer for his practice. He was listening to a convention’s practice management speaker one afternoon, and asked a probing question at the break. “Can’t I just set up my own insurance plan for patients?”
The rest is history. What Dr. R. did was to create on his own Patient Benefit Plan, not really an insurance plan. For an annual prepayment of $500 ($400 for patients up to age 13), patients receive annual preventative treatment consisting of 2 examinations, 2 cleanings, 2 flouride applications up to age 13, and 4 bitewing x-rays. There is also a 10% discount on additional preventative treatment, fillings, endodontics, oral surgery, crowns, bridges, periodontics and implants. A 15% discount is applied to treatments exceeding $4,000, and a 20% discount is applied to treatments exceeding $10,000.
You may be asking yourself “What is the big deal?” The wisdom is in how the Benefit Plan has managed client treatment plans. Patients are now prepaying one year in advance for basic prophylaxis services to be provided at least six months out from the initial treatment date, hence hygiene appointments (and more importantly, your dental hygienist staff) are booked with patients that will be in a chair waiting for an examination. If more extensive care is warranted based on your hygenist’s thorough oral exam and your follow-up, the patient is in your office, not your competitor’s dental office down the street, and has a thorough understanding of what your benefit plan covers so they can more likely proceed with more extensive treatment options. And 100 patients who have subscribed to a Benefit Plan contribute $50,000 to gross collections each year, a substantial annuity in a start-up or growing practice. Think about what 500 subscribers would mean to the average $1 million practice.
Had the Benefit Plan not been in place, a competing practice with such a plan may indeed have reeled in the new patient, or a recommended treatment plan may not have been implemented due to the uncertainty and cost of treatment. With your own Benefit Plan in place, each party to dental care knows what will be covered and to what extent, without regard to waiting periods, pre-existing conditions, calendar year limits, or waiting periods. A patient can sign up on Day 1 and obtain $18,000 of dental care with all the hoopla that they deserve!
Practices may be concerned about what they are giving away with built-in plan discounts, not what they are receiving. We would rather have the glass be examined and labelled as “half-full”, not “half-empty”. A patient Benefit Plan is a win-win for both parties.
Mark J. McGaunn, CPA/PFS, CFP® leads the veterinary/dental/financial planning divisions at McGaunn & Schwadron, CPA’s, LLC and can be reached via firstname.lastname@example.org or (781) 489-6651.