You know that feeling of “breaking-free” from something that’s held you captive? Compare that experience to being set free from the “clutches” of dental insurance. It could be a reality when you get clarity on the question - what is a dental membership plan?
You’re already aware that the insurance industry has a strong investment in dentistry. The more dependent you are on providers the more bound you can feel - especially where revenue cycles are concerned.
Sources quoted in this Dental Economics article reveal the essence of the challenge you and your colleagues could be facing these days.
”According to the National Association of Dental Plans (NADP), about two-thirds of the US population receives dental coverage through commercial insurance. So it’s understandable why many doctors might feel trapped or pressured into accepting it, even with all the issues. A 2017 NADP report revealed about 77% of Americans had dental benefits in 2016, but a research study by the Health Policy Institute concluded that “a significant amount of adult beneficiaries—more than one out of three—do not use any of their dental benefits within the year.”
The burden of fee negotiations, PPO relationships, and more is time consuming. Plus there’s the impact on your patient relationships as their loyalty is at risk due to routine provider network changes.
An in-house membership plan provides a freeing opportunity for your dental practice.
What is a dental membership plan?
If you frequent Costco, Sam’s Club, or routinely purchase products via Amazon Prime you’re acquainted with the concept.
In much the same way, your patients can pay a monthly or annual fee to you as their dental provider. The fee entitles them to special benefits and discounts exclusive to your dental practice.
A dental membership plan enables you to:
- Focus on and deliver a high standard of patient care
- Eliminate the “middle-man” (insurance providers, etc) from your service delivery
- Avoid insurance claim delays and denials
And a core benefit of a dental membership plan can involve your revenue cycle starting with your practice’s cash flow.
- More predictable and recurring revenue
- Less waiting on payments from insurance companies
Now that you have more clarity about the basics of an in-house plan it’s a good time to consider implementing one.
How a dental membership plan could increase revenue and release you from the control of insurance providers
Less dependence on dental insurance plans
Dentistry has been under the thumb of the insurance model for years. Costs are routinely inflated, patient care is compromised, and dental practice management becomes more complicated.
Reducing or eliminating insurance dependence allows you the freedom to provide the care your patients need, an increase in service and quality of care options, and a revenue cycle boost via improved cash flow.
The insurance model is a basic “win” for the insurance companies. A dental membership plan model allows your patients and your practice to win.
Recurring revenue increases
Up and down cash flow cycles create the common “feast-or-famine” challenges associated with the business of dentistry. As you’re aware, schedule and production surges are countered by slower periods.
A dental membership plan provides:
- More income predictability
- Consistent patient fees that generate recurring revenue based on participation volume
- Practice stability and less management stress
Enhanced practice valuation
The more predictable cash flow of implementing a dental membership plan translates to an increase in your practice’s value.
”According to The Automatic Customer by John Warrillow, recurring revenue can increase your practice’s value by two-to-six times the annual recurring revenue. Instead of receiving a discounted valuation for your practice, the revenue stream can be multiplied.”
Dental practice stability in spite of demand cycles
The need for dentistry is consistent. But often patient and public demand for it is impacted by unforeseen or present circumstances - such as the COVID-19 pandemic.
While a dental membership plan cannot guarantee consistency, it will give patients an additional incentive to seek treatment without regard to cost issues. That also helps alleviate the stress you feel when dentistry demand is threatened.
Again, predictability provides a needed sense of stability when circumstances are beyond your control. Revenue cycles remain steady and fixed costs are covered.
Effective plan management helps grow the model
A dental membership model works. But it’s essential that you apply effective workflows to create and manage its growth. Software, systems, and routine workflows increase scalability.
For example, payment automation helps you and your patient. Collecting membership fees automatically enables you to maintain more consistency. And it gives your participating patients one less thing to add to their agenda.
Payment automation is a key step in effective plan management.
Membership helps increase participation
Essentially, a dental membership plan improves the likelihood that patients will seek and accept treatment. You could notice an increase in your case acceptance among plan participants.
Consumer data reveals that Amazon Prime members spending $99 per year on Prime access will spend $1,300 per year via the service.
An in-house plan can give your patients more incentive to accept treatment rather than postponing or avoiding it.
A potential recession-proofing alternative for your dental practice
Economic recessions are common. The potential of recurring revenue via a dental membership plan can provide another safeguard during downtimes.
Feast-or-famine will often follow a practice that gives too much attention to production that revolves around high-cost treatment. A model that has recurring revenue cycles and auto-renewable income streams, such as a dental membership plan, could experience better stability.
Again, an in-house membership plan and less insurance dependency can lead to…
- Consistent recurring revenue
- Increased patient production
- Solid financials
Consider a cloud-based solution and accurately measure your revenue cycles - even those generated by a dental membership plan.
You might find the cloud solution like Denticon to be a more efficient report gathering platform to monitor and drive your overall dental practice or dental organization’s performance.
Aside from its financial management capacity, the Denticon platform also provides:
- A predictable, monthly subscription rate
- Data hosted in the cloud that’s remotely and securely accessible
- Savings that compared with a “legacy” system can total an average of 40%
It makes sense to look below the surface and see the massive potential of upgrading to a cloud-based dental practice management solution with a more advanced revenue cycle management module.