The Advantages of Dental Membership Plans.
Not long ago, I received a call from a longtime patient. He explained that his daughter, “Amber” (who lived away at college), needed some dental treatments. Amber’s dentist told her she needed to have five cavities filled. Amber agreed to have three cavities filled and went back to the dentist for treatment. Amber said that the dentist seemed in a rush to get the job done, and as a result, she was in a lot of pain. Amber’s dad called me up and asked, “What can be done?” His daughter didn’t have dental insurance anymore but needed treatment and wanted to get out of pain.
I knew immediately how to help. Three years ago, my practice, LêDowns Dentistry in Denver, CO, instituted an in-office dental membership plan. Now we offer the plan to everyone in our office. It’s particularly beneficial for patients who aren’t satisfied with their dental insurance or who are unable to get dental insurance. When Amber’s dad heard that the dental membership plan would cost about $19.99 a month, he quickly said, “Sign her up!”
LêDowns Dentistry implemented a dental membership plan after experiencing frustration with the limitations of dental insurance companies and disputations over payment. In many cases, insurance companies stall on payments, and dentists must take time to appeal payment for treatments that were initially denied.
Insurance debates are frustrating for patients as well as dentists because patients often assume they have good coverage, but the plan’s fine print may suggest otherwise. I’ve learned that insurance companies are not as concerned about their patients’ health as much as they are concerned about collecting premiums.
Therefore, we started an in-office dental membership plan as a way to help our patients get quality dental care, and as an alternative to the frustrations of dental insurance.
Dental membership plans are sometimes called “In-Office” or “In-House Savings Plans.” At LêDowns Dentistry, we simply call it The LêDowns Dental Plan. For our patients, it’s a little bit like a warehouse club membership. To join, patients pay a membership fee. Ours costs $240 a year, which equates to a little over $19.99 a month. Payment is required in full, up front, and we don’t accept monthly payments.
The membership fee includes two hygiene appointments, X-rays (including a Panorex, if needed), prophylactic exams, an oral cancer screening, and an additional cost savings off some additional treatments. With membership, patients can get preventative work done twice a year.
With our dental membership plan, the additional cost savings for patients is 15 percent off our usual and customary fee for fillings, crowns, root canals, and dentures. We don’t call it a discount plan because doing so cheapens the work. Calling it a “cash savings” is an important distinction, and we’re more than happy to reduce the normal fees by 15 percent because it’s a better price than the 20 to 30 percent discount that dental insurance usually requires.
We exempt some treatments from the 15 percent cost savings. For example, we don’t extend the cost savings for implants, Invisalign®, or full arch and full mouth reconstructions. We exclude those treatments because a lot more work is involved in such complex cases. The exemptions are clearly defined for the patient before he or she signs up for membership.
Note: To help defray the costs of full mouth rehabilitation cases, we always offer our patients the option to pre-pay, and by pre-paying they receive a 5 percent cash savings. This cash savings is offered to all patients, regardless of membership in The LêDowns Dental Plan. We offer this for patients who choose complex dentistry because if we financed the treatment through third-party sources, we would pay the third-party company a 10 percent fee. I’d rather offer the patient a 5 percent savings and then he or she can go to third-party sources to figure out how to fit it into their budget.
If a patient changes his or her mind after signing up, we offer a 30-day time period for a refund. After 30 days, the patient is in our system and part of the plan. The membership benefits are clearly defined and written down so that patients know exactly what they get and they can refer to it later on.
If, for whatever reason, a patient leaves the plan and decides later on to return, we offer a reinstatement fee. It’s a one-time fee of 50 percent of the original membership fee, just to get the patient back on the plan.
It’s important to remember that The LêDowns Dental Plan is not an insurance plan—it’s an in-office membership plan. Calling it an insurance plan makes it subject to different laws and regulations. Any dentist can establish a membership-type plan, although the laws and regulations can vary from state to state. In some states, an insurance commissioner may regulate the plan, but in other states it is categorized as a discount plan. In some areas, you are required to register your program with a state agency. It’s important to check state and local regulations and consider asking an attorney to review the plan.
Although we created our plan to help patients who don’t have insurance, in many cases, it’s a better deal than what patients receive from their dental insurance coverage. Dental insurance is generally very limiting. It typically only accommodates two cleanings, a couple of fillings, and maybe one crown a year—if it’s “good” insurance. It usually doesn’t cover anything for catastrophic problems.
In situations where people need comprehensive restorative work, they are limited by what the insurance is willing to cover. A dental membership plan is a great option to help patients manage costs and get the care they need without feeling completely overwhelmed by the cost.
Fewer Patients Have Insurance
Since offering The LêDowns Dental Plan nearly three years ago, we have registered close to 400 enrollees in the plan, and we keep getting more. Several of these patients work for companies that have eliminated dental insurance benefits, putting the financial responsibility for dental health entirely on the patients. Fewer and fewer corporations are offering dental coverage as part of employee benefits.
Other patients enrolled in the plan after they discovered that their insurance plan was devoid of any real benefits. Some insurance plans are quite restrictive; patients can only go to dentists or practices that are on an “approved” corporate or Medicaid list. Therefore, it’s great for patients to have an alternative so that they can make their own choice regarding a dental provider and receive top-quality treatment.
I’ve received many calls about The LêDowns Dental Plan from patients who are retired and no longer have dental insurance, but want our practice to continue taking care of their dental health.
To accommodate the needs of all our patients, we offer The LêDowns Dental Plan to everyone, whether they have insurance coverage or not. We want everyone to know that if their dental insurance restricts their options, they can opt out of it in favor of our plan. However, we specify that patients can’t utilize both their insurance plan and The LêDowns Dental Plan. Patients must opt out of insurance if they join our plan.
In general, a good price point for a dental membership plan is at or under $300 per year. To determine pricing at your location, look at the income demographics in your area. The plan should be priced at a level that attracts new patients who do not have insurance.
It’s always a good idea to look at the local competition and see what they are charging for similar programs, and then price your membership plan competitively. But before offering any cash savings off your usual and customary fees, it’s a good idea to revisit your current fee structure. If you haven’t increased your fees in three or four years, consider re-evaluating those fees before implementing the cost-savings offerings to ensure that the pricing structure makes sense.
We came up with a membership fee of $240 per year by analyzing the price of two hygiene visits, periodic exams, and X-rays every other year. This gives me and my team the opportunity to keep an eye on our patients and recommend treatments as necessary.
We also offer a volume discount to bundle the plan. The $240 fee is for an individual, but we also offer a price of $450 for a couple. In addition, we offer a family price of $895 for four family members to join the plan (dependents up to 18 years old can be included). If a patient would like to arrange for more children to be included on the plan, we can work with them on pricing.
Some dental practices offer tiered membership plans—including “basic,” “plus,” and “premium” membership plans with levels of treatment covered at various discounts. But at LêDowns Dentistry, we prefer to keep the plan simple and straightforward with the same benefits for anyone on the plan.
In terms of accounting, the revenue collected from the membership fees should show up in the doctor’s revenue stream (not the hygienist’s). The fees are a tally of how many patients have enrolled and submitted revenue for the year.
Our philosophy is always about how we can help patients keep their teeth for a lifetime. With our plan, we consistently see patients twice a year and can recommend treatment based on what the patient needs rather than what insurance will cover.
Executing the Plan
As mentioned previously, the rules and regulations vary from state to state, and some states have no regulations about membership. It’s up to dentists to administer the plan fairly and make sure that patients are paying their membership fee on a yearly basis.
It takes a little bit of work to figure out how to manage the plan. We base our plan on the month the patient joins—if he or she joins in March, then their start day is March 1 and the following February we will send a notice reminding him or her that it’s time to renew their membership. We make a note next to the patient’s name so that when their name comes up in February, we send out a reminder to renew membership.
In our practice, the front office tracks the memberships and payments. We simply use an Excel spreadsheet to manage the plan. It keeps management of the plan easy. Dentists shouldn’t need to outsource management of this system if they keep it simple and straightforward to execute.
As with any new product or program, it’s important to invest some time and energy in marketing the plan to patients. We make sure that our membership plan is clearly identified on our dental practice website. We prefer to keep the information on our website fairly basic. It simply reads, “For patients without dental insurance, please contact our office and ask about The LêDowns Dental Plan.” This message lets patients know that we offer options for those without insurance. When they call to ask about the plan, a member of our team can explain the benefits to them.
In addition to our website, we post information about the plan in our office reception area and put blurbs about the plan in all of our flyers. We want all of our patients to be aware that the membership plan is available to them.
It’s important to train the staff on the benefits of the plan and the language to use when speaking with patients about the plan. At LêDowns Dentistry, we have a laminated sheet that highlights the details and benefits of the plan. Whenever a member of our front desk team is asked about the plan, they can show patients the sheet with the benefits of the plan clearly outlined.
It’s not just the front office staff that needs to be trained about membership plans, dental assistants and hygienists should be trained, too. If a patient asks questions about the plan during cleanings or treatment, the dental assistant or hygienist should be fully prepared to respond.
Benefits for Dentists
Since its inception, The LêDowns Dental Plan just keeps picking up steam! Now when patients come in and say they don’t have insurance, the front office can offer patients an alternative by inviting them to join the dental membership plan. Dental membership plans offer a myriad of benefits for dental offices. Here’s a list of some of the major benefits:
1. Patients schedule and keep hygiene visits. One of the biggest benefits of the plan is that it “locks” patients into the system for hygiene visits. Hygiene visits are a leading revenue generator in our practice because restorative work always comes out of hygiene visits. If the hygiene system is sputtering, then the dentist is not doing a lot of restorative work. The dental membership plan makes it easy for patients to come in for hygiene visits.
2. Patients schedule restorative care earlier. Having patients adhere to regular hygiene visits aligns with our philosophy of helping our patients keep their teeth for a lifetime. If we can stay consistent with a patient’s dental care, our chances of helping him or her keep their teeth increases because we can intervene earlier when signs and symptoms of dental issues are detected.
3. Membership plans benefit the bottom line. The dental membership plan has been good for our accounting and bookkeeping. In a dental practice, a typical goal is to collect 98 percent of what you produce in the practice. Most of the doctors who I talk to and mentor in continuing education classes collect in the high 80s to low 90s. And in some particularly bad instances, it may even be in the low 80s. That means there’s a lot of money that’s not going to be recouped. By contrast, last year we collected 102 percent of our production!
4. There is no waiting for pre-authorizations from insurance carriers. As most dentists are aware, insurance carriers put a cap on how much work you can do on patients, and they also restrict how much you can charge. With membership plans, the dentist sets the usual and customary fee, without any restrictions or limitations.
5. Maximums, deductibles, and pre-existing conditions are eliminated. The plan eliminates maximum caps on payments, deductibles, and limits on pre-existing conditions. Best of all, dentists don’t wait for insurance companies to approve payment for large treatments—which sometimes can take up to a year or more. With membership plans, dentists can do complex treatments when the patient is ready.
6. No rejected claims. With the dental membership plan, our office doesn’t have insurance claims rejected due to the insurance company playing a “time game.” Dental office team members sometimes have to submit a claim two or three times before receiving payment. With the membership plan, I consult with the patient, we agree on the proper treatment, and then we move forward with treatment. There’s no back and forth about what will be paid and when.
7. Dental membership plans eliminate the insurance middleman. Membership plans are a win-win proposition for patients and dental practices because when the insurance middleman is eliminated from the process, both the dentist and patient save money.
8. Dentists can choose the best products and materials. Dental insurance companies tend to pay for the least expensive materials by downcoding your procedures. With The LêDowns Dental Plan, we can use premium equipment, premium supplies, and a premium lab. The patient has a choice, too, and can get the best care available. The plan gives patients freedom to choose what they want to do for their restorative work, and the doctor can choose premium products and provide the best possible care.
So join the club and consider offering a dental membership plan for your patients! They are a great way to increase revenue in your practice while providing affordable and quality care for your patients.