by Robert Maccario, MBA
Electing to transition your practice to an independent business model is a business decision, not an emotional one. Too many dentists jump enthusiastically on the insurance-free bandwagon and end up committing economic suicide. Emotion — especially enthusiasm — has its place in business. But without sound tools and education to guide that enthusiasm, calculated risks devolve into outright gambles.
As a businessperson, you should carefully plan both your timing and tactics to be consistent with the economic health of your practice. Think evolution, not revolution. Let's examine a 10-step process that will firmly plant your feet on the path to independence.
1 Start thinking and acting like an entrepreneur and independent business. Develop the business skills and knowledge to run your practice as a stand-alone business, independent from any single referral source (i.e. insurance companies.)
Ensure your thoughts and actions highlight the value of your care and services — not the value of insurance. Stop using insurance jargon. You aren't a "non-participating" practitioner — you are an independent business. When you discuss fees, refer to them as your standard professional fees, not "UCR."
2 Apply financial rather than emotional criteria. See insurance companies as they are: referral sources no different from the yellow pages, direct mail, or a Web page. Make your business decisions about them as you would any other referral source: by using a sound business analysis. This is a business decision, and should not be based on emotion.
• What percent of revenue do they represent, and what percent of appointments do they represent?
• How will profitability be affected if you drop a referral source?
• How much are your contracted fees with this referral source inhibiting your ability to charge what your care is really worth?
• How much would you have to raise fees to offset the loss in profitability without this referral source?
3 Initiate an external marketing program.
Develop your own brand identity in the marketplace. Make sure your image is consistent. Your printed material, facility, and team should present a cohesive front.
Start this process at least six to nine months prior to dropping the insurance company as a referral source. Realize that your marketing efforts will take time and that you can reinforce them with a variety of marketing vehicles.
4 Adopt customer service systems. Retain your patients by raising the value of your care and services beyond the value of the insurance premium. Remember, insurance companies want you to look and act like a commodity, while their network continues to be the unique draw to consumers. Commodities are purchased on price, and uniqueness is purchased on value. You need to amplify your unique selling proposition (USP) to your patients/guests. Offer services like VIP checkout and other amenities that guests expect from a quality service organization. Use patient financing as a marketing tool. Make options available that are affordable for any credit-worthy patient.
5 Create team commitment by addressing their concerns and objections and by teaching the team how to address patient concerns and objections. At a staff meeting, answer your team's questions about the move to an independent business mind-set first. They are your internal customers; if your team is skeptical, your external patient/guest customers will not be convinced. It can be a huge mistake to put a staff member on the front line with patients if that person does not believe that this evolution is in the patients' best interest.
Another big mistake that practices can make is to talk about "the change." Remember — most of us don't like change. Reframe your approach to emphasize that you are staying the same. Tell your patients, "The insurance company is changing, not us! We have the same commitment to your care and well- being that you have come to trust over the years, and we will not violate your trust.
The insurance company is changing by not keeping up with the standards that we have used to build your trust." Position the insurance company as the change agent. Your practice is staying the same and keeping a consistent focus on quality care.
Your patients will have three main objections. You and your team need to be acquainted with these issues, both to avoid any awkward feelings and to help your patients understand.
"I don't know how to do the paperwork."
You will still need to assist your patients in filling out forms, but that doesn't mean you have to wait for your money. More and more practices are paid prior to care, with the insurance check going directly to the patient. Help them set up their personal line of credit with your "outside billing service." (Don't mention credit card companies or finance companies — call them your "outside billing service.")
"I want the best coverage."
Your staff and your patients want optimum coverage for the quality of care you are committed to providing. Use such phrases as, "Our experience has shown the insurance companies are much more responsive to the premium payer (patient/guardian) than the payee (dental office).
We have seen patients receive reimbursements faster, and, in many cases, get better coverage when the check goes directly to them." What rational patient can argue this logic? The person who is sending the check for the premium is going to have much more leverage with the insurance company than the dental office's accounts payable staff.
"How quickly will I be paid?
This question can be answered much like question No. 2. Give them the information to call the insurance company and tell them, "Should you have any questions or concerns about your coverage or payment, please call this number (the insurance company) for the most immediate response." It makes no sense for the patient to call you, so you can call the insurance company and then call the patient back.
Instruct patients to call the insurance company directly so they can experience first-hand the rudeness and lack of attention dental offices have tolerated for years. When patients complain about the level of service the insurance company is providing, agree with them and state, "I understand how you feel. If I paid this premium and experienced such poor service, I would make sure the person at your company who contracted this insurance program knows how bad it is." Finish with a polite smile.
As a team, write these and other benefit statements about why your practice's evolution is in patients' best interest. Write your scripts based on the five patient motivators, easily remembered with the acronym PATCH — pain/fear, appearance, time, cost, and health/function. For example, if cost is the patient's concern, you can say, "We have found that handling the paperwork this way keeps our administrative costs down and our fees more competitive for the quality of care we provide." If they are good, paying patients/guests, they will want your fees to be more competitive for the best quality. If they are poor payers, do you care if they move to another practice? Keep in mind these scripts are always consistent with sound communication skills supported by outstanding customer service and clinical excellence.
6 Write a letter to patients. Keep in mind how to present your evolution: It's the insurance company that is changing — not your practice! Anchor your patients with trust and your solid relationship. Should they still decide to leave, make sure they know they will be welcomed back.
For example, the letter might start out with something like this:
Because of our long-standing relationship with you, our valued patient, and in consideration of the trust you have put in us over the years, we are writing to let you know in advance that we are changing our contractual status with XYZ Dental Insurance.
For practices like ours, staying at the forefront of clinical excellence, patient care, and service is the basis for our success. We will not waiver in our commitment to you of providing the best clinical care and the most current dental services available. But please be assured, we are severing only our contract with XYZ insurance company, not our relationship with you, our valued patient.
Use your benefit statements to write your letter to the patients, but do not send it! Wait until after you have tested and refined these statements.
7 Test the scripts.
Test the scripts/benefit statements you created in Step 5 over the next few months with your patients. Talk to one another about how they are working. Your intent should be to let patients know that you are "severing our contract with the insurance company, not our relationship with our valued patients." Remember, it's evolution — not revolution.
8 Send letters.
Now you can send your patients the letter. When they receive it, if you've done your job right, they should be saying, "Oh, I knew they were going to do this." By this time, your patients should have had a personal explanation of your practice's commitment to their care. If they receive this letter and respond with surprise, you have not communicated your position clearly, and they will probably request their charts.
At this time, also send your termination letter to the referral source (insurance carrier).
9 Make telephone calls to scheduled patients. Review your schedule to identify patients involved with the referral source you have dropped. Call those patients to confirm their appointments. Some patients may think they cannot continue coming to your practice, so reiterate that you are looking forward to seeing them and that they are still very welcome in your practice. Review your financial arrangements with these patients. You may have to honor the contracted fee with the insurance company or get a signed financial arrangement with your "standard professional fees." At this time, accepting the contracted fee as a tool to ease the conversion to your fees should be a minor cost — consider it tuition. But do not let this opportunity to discuss your fees slip by.
10 Double your efforts on quality of care and customer service. Go back and review the quality of your care and service — you are now competing in the world of discretionary dollars. You are on your way to becoming an independent business and enjoying your patients/guests — not someone else's subscriber.
Is it right for everyone?
Is this the only approach to success in dentistry? Is the independent business model for everyone? No — there's no one "right" answer, nor is there one best format, structure, or business model for everyone. Your success will depend more on your strong vision of the future, having the right tools, and knowing when to use them.
Each business model naturally requires you to employ different tools — just like patient care. As a dentist, you have a broad range of skills. You execute a specific, unique treatment plan for each patient based on your professional expertise for the patient's long-term well being.
Your approach depends on your interpretation of the patient's overall condition, health care needs, and desired outcome. Your business practice is no different from your dental practice.
Think of your practice as a set of Legos. You can arrange the building blocks in many different shapes, and they will be successful as long as they are built on solid concepts.
Success can lead to failure
We know what isn't going to work long-term: An antiquated practice model. Yet the majority of dental practices still use historical management models, which are out of date because they are based on someone else's understanding of what your patient care and profitability strategy should be. They put you at risk clinically and economically.
Many of these models have a history of success, but the environment had a different set of values. In the new, competitive environment of independent businesses, continuing to work the insurance-based care model is a pathway to failure.
The new practice model
If you are going to take advantage of this opportunity to reclaim your business, rekindle your passion, and recapture your future, these old models and paradigms must be discarded.
The new practice model will be based on your practice's ability to influence customer perceptions and expectations. Converting your patients from insurance subscribers into guests will unlock the full potential of you, your practice, and your dental team.
