There’s been several notices lately of changes in the dental insurance industry. This summer news came that WDS (Delta of Washington) instituted fee schedule decreases to dentists with little notice given. Last week Delta of Idaho announced similar decreases and Delta of California has frozen fees. Additionally, Delta of California has changed their policy so that a dentist can no longer sign up as a Premier Provider only, new providers must also accept the PPO plan with the corresponding lower fee schedule. Typically a Premier fee schedule is approximately 20% higher than a PPO fee schedule so the impact is alarming. The next question is how soon it will take for Delta to stop offering Premier policies to patients? When that happens, how will that affect dentists who are currently in-network only at the Premier level? While it may seem that these changes are affecting only dentists who accept Delta in a limited number of states, the reality is that these changes are likely to move across the country with Delta and are being watched closely by other insurance companies in the industry. If Delta can drop fees 5-15% it appears logical that other companies will follow suit, it’s just a matter of time. How does this affect a typical practice and what should dentists be taking into consideration right now in an attempt to be proactive to these changes? First, be sure your fee schedules are as high as you can get them and that you are not leaving any money on the table. Do this as soon as possible because if Delta proves that they can drop fees I expect fee schedule negotiations with other companies to be harder to come by. Just yesterday my partner, Lisa, was discussing a very low fee schedule one of our clients has with an insurance company rep, noting that it was substantially lower in this particular market than other companies. The rep’s response was “I know! We are still signing up doctors though so we don’t need to increase fees”. When we see fee schedules at 45-50%+ write-offs and dentists are still going in-network more than out-of-network means the leverage dentists had in a better economy is unfortunately gone. We have heard directly from the reps of another major insurance company that similar changes are following and will begin being instituted very shortly in various parts of the country. For newer dentists signing up for a plan for the first time it’s critical that you get the highest fee schedule available in the beginning, not the first offer. Any potential future increases (or decreases) will be based off your current fee schedule and if you start out taking a low ball offer you will never make it back up. Second, consider all ways you can diversify your patient base now before insurance companies force you to. Some practices that thrive on PPO involvement may not see the same need to shift their buiness model but the average solo practice dentist will – ask the dentists in Washington and you’ll get an earful. Currently about 50% of the population does not have dental insurance so creative ways to appeal to the non-insured I believe are worth addressing. I, along with many of my other consultant peers, recommend Quality Dental Plan that is owned by dentist Dan Marut as a turn key option for offering an in-office plan to those who are looking for help with their dental costs but don’t have a traditional insurance option. Let’s be honest, traditional insurance is a horrible deal anyway but a surprising number of potential patients still perceive they can’t afford to see a dentist without insurance so this is a nice alternative to offer. The beauty of this plan is that Dan has created all the marketing and implementation materials so it can be started quickly and easily. Another way to diversify is expanding the procedures you offer to services that are not tied to dental insurance. Elective procedures such as implants and short term ortho are the buzz right now as well as sleep apnea and Botox in some areas. This yet another reason to be involved in your state’s legislation if you are in a state that still forces you to charge PPO fees for non-covered or maxxed out services. Third is to be realistic about debt levels. While I’m not an alarmist I do think the next two years will be telling about how much the insurance companies will be able to cut fees before the economy hopefully begins to rebound and the pendulum shifts again. At that point however, traditional insurance benefits may not rebound and permanent changes in how dentists participate may have arrived. There will be some dentists who will expand and continue to grow regardless of the economy or changes in the insurance industry. I do believe that the vast majority will feel some degree of effects coming and that a degree of caution would be wise in terms of how much debt a practice adds on in the near future. The more financial freedom a dentist has the easier it will be to walk away from insurance downgrades. As evidenced by the unexpected nature of the WDS changes, it’s exceptionally difficult to make those changes when an entire state of dentists are given this kind of news all at once. Those not on the immediate west coast still have a degree of time to position themselves for these changes and it would be wise to do it sooner rather than later. Fourth is to educate your patients. Their employer’s human resources staff does not care what you think of their dental insurance contracts however they are there to listen to employee feedback. Patients need to realize that if they advocate with their employer for plans that allow them to see their choice of dentists with reasonable coverage that they will have more options down the road. The best time to do that is before fee schedule decreases happen. We’re working with several practices right now where dentists are 5-10 years away from retirement and want to know whether they should go in- network with more plans or fewer plans to not only fill chair time now but also to position themselves well for the sale of their practice upon retirement. For these dentists it’s important to make decisions that are good in the long term of retirement planning as well as the short term and can mean tough choices about associates, staff, overhead and capacity issues. I’d be curious about choices other offices are making to position themselves well in light of upcoming changes and any relevant information that WDS and Idaho dentists have in addition to the input on the current “Delta Detnal Lowering Reimbursement in Washington” thread on DentalTown that’s a must read.

As evidenced most recently by the significant fee decreases by Washington Dental (WDS Delta) on the west coast, insurance companies are continuing to charge higher premiums for fewer benefits and lower reimbursements.  Keep in mind that 50% of the population does not have dental insurance.  While most offices that are struggling for new patient flow begin to look at going in-network with PPOs as a solution, I recommend targeting the uninsured as another option.  Trends clearly show that insurance benefits are much more likely to decrease than increase in the future.   As dentists plan their long term goals consider ways that you can gradually decrease your dependence on insurance participation.  While I’d like to assume the WDS cuts are an isolated incident I think it’s far more likely that it’s just the beginning.   If your practice is heavily reliant on PPOs be sure to look beyond insurance to other alternatives to keep new patient flow up before you are faced with the hard choices the WDS dentists are dealing with now.

One of my very favorite dental resources to pass on is DentalTown.  If you are in the dental field and haven’t signed on, you are missing out on all kinds of continuing education, message boards, case presentation and advice from colleagues.  Founder Howard Farran designed DentalTown with the goal that no dentist would ever practice alone and he has created an environment where solo dentists can get feedback and interact with other dentists.  Whether you are a new grad or an experienced dentist, Dentaltown offers a peer group that can give input on various stages of dentistry including financial management, marketing, practice purchases, clinical expertise, new products, staff concerns and much more.  And, did I mention that it’s Free?  Whether you like to participate or just observe, this is a great place to find consolidated information and opinions about everything dental!

I was recently participating in a discussion about how to survive in a PPO world and the discussion came around to customer service.  What does that mean?  Sometimes dentists assume customer service means how well the patient’s dentistry turns out.  If the veneers are beautiful and the shots are painless that must mean you are providing good customer service right?  While dental care itself is obviously important, people often define customer service as a broad mix of services that extend far beyond clinical results.  Who are you trying to reach and are you appealing to them?  Elderly patients may be looking for a senior discount, convenient parking or a handicap accessible ramp.  Moms may be seeking an office where the entire family can be seen, after school or Saturday hours and may want to know if parents are allowed in the operatory during treatment.  Some patients will want to know if you offer a payment plan, if you have appointments over the lunch hour, if you see emergency visits the same day, if you accept American Express, if you participate with their insurance.  Some patients will return simply because you are nicer and more helpful than any other office they have ever been to.  What patients are looking is so broad that it’s important to recognize we can’t be all things to all people.  Insurance is one customer service issue.  Some patients will not come to your office if you are not on their list, others will look beyond the list if you meet their customer service needs in other areas that are more important to them.  Be sure your marketing dollars are focused on the type of patient you are trying to attract and will be a good fit with your practice philosophy.  Hire great staff and train them to answer the question “do you take my insurance?” correctly.  Whether your office takes PPOs or not, do not let insurance dictate new patient conversations.  Remember  estimates show that anywhere between 33-50% of the population does not even have dental insurance and those that do are often unaware of how their benefits work in detail.  Be sure your staff understands how to discuss the realities of insurance within the context of everything else you offer!