by Stop hunting Fee-For-Service cases, and create a consistent harvest of profitable treatment
By Dental Menu
Hunting or Farming
Are you a hunter or a farmer? Hunters look for specific prey and use specialized techniques and tools to kill and eat. Hunters are constantly chasing and following their prey. Success can translate to a large meal but it’s less predictable and more sporadic versus farming. On the other hand, farmers plant seeds, cultivate and nourish fields, and raise animals within the confines of fences and pens. Their harvest is more planned and predictable.
What does this have to do with dentistry and membership plans? In a practice you can use specialized marketing and tools/techniques to hunt fee-for-service patients. These FFS cases are rewarding because the pay is better, and you don’t have insurance dictating treatment and getting in between you and the patient. However, it’s hard to build a practice around sporadic hunting because once the work is done, you must convince un-insured patients to return on a regular basis. You are constantly chasing and marketing (hunting) for these cases.
Insurance patients on the other hand follow a process that more resembles farming. They typically schedule 6-month recall visits because these services are included at no charge with their insurance plan. Your hygiene department is your farm. Patients that come through hygiene may or may not need treatment at that time, however you are forming relationships and educating and gaining trust, as you see them regularly for preventive visits. Eventually, these seeds will grow and there will be natural harvest from your hygiene farm as those patients need treatment.
Un-insured patients need to be coming through your hygiene department on a regular basis to ensure natural, predictable treatment. If most of the patients coming in regularly for hygiene are insurance patients, it will be difficult to grow and produce consistent FFS treatment.
The purpose of your membership plan should be to attract and retain FFS patients by having them come in on a consistent basis for recall (farming) and help patient’s accept treatment (hunting).
Discount Plan VS Membership Plan
What is the difference between a discount plan and a continuity (membership) plan? Examples of discount programs are Groupon or the fundraising cards you buy that have all the discounts to various places. You purchase a specific Groupon deal at a discount to get the best possible price. True membership plans resemble Netflix, Amazon Prime, or a Gym Membership. You pay each month to have access to certain benefits/ content.
Many of the dental membership plans we see are more of a discount style plan. They help case acceptance and are effective hunting tools to close treatment. If patients buy a set of services for a year and don’t renew until they come back to the office, you have a discount plan. Discounts are an important part of a membership plan, but your plan should do more than offer a discount that improves your case acceptance.
True membership (continuity) plans get un-insured patients into your hygiene farm on a consistent basis by offering access to preventive services at specified intervals. There isn’t a renewal period each year. Instead, the patient pays each month (or year) to have access to exams, cleanings, x-rays, and other services, (rewards, fluoride, botox, nitrous, etc.). They can access those services at the intervals specified as long as their membership is active. In this way you sign the patient up once and let the program roll.
For more information click here.
Pricing
Have you ever wondered if you are charging too much or too little for your plan? We have found it helpful to take the annual cost of your plan and use that as a budget for the included services. If you were accepting in-network fees with an insurance carrier, you would want to know what will be paid when services are provided. Treat your plan this same way. Set up a spreadsheet with included benefits (exams, cleanings, x-rays) and use the price of your plan as an annual budget.
Should you offer monthly payments or annual payments? We recommend offering both. We have found that monthly payments have higher acceptance and retention rates versus annual options. In the theme of creating a true continuity program monthly payments generate more profitability, and patients stay on plans longer, versus annual payments.
Administration and Accounting
Have you even wondered where to put membership payments and how they affect the ledger? There are two processes for handling membership payments with the patient ledger. The Standard method involves adjusting production and/or collections off to $0 when a patient receives included benefits. This is the most common method and may be a good solution for your practice.
However, many offices are experiencing difficulties and inaccuracies due to these write-offs. KPI’s (key performance indicators) are inaccurate, provider compensation can be affected, and a good office manager or accountant knows you should not be adjusting services to zero unless you didn’t collect the money. Revenue received should match services rendered and any discrepancies between the two would be a real adjustment. The Advanced method of reconciliation allows you to recognize revenue when services are received and eliminates any “fake” adjustments to your ledger.
For a more in-depth discussion on the two methods for reconciling your membership revenue click here.
Changing from hunting to farming with a true membership (continuity plan) will increase the profitability of your practice and reduce your dependance on dental insurance.
Paul Lowry is the CEO and co-founder of the Dental Menu. From 2008-2017 he helped offices with internal and external marketing. After experiencing the challenges of finding and retaining FFS patients, he co-founded Dental Menu in 2017. Dental Menu is a complete platform that allows dental providers to offer subscription plans directly to their patients.
Paul earned a bachelor’s degree in advertising and marketing from Brigham Young University and a master’s degree in Business Administration from Utah State University.
