By Cedric Jackson
Dental practices are constantly looking for ways to increase revenue while serving patients. As a result, some have turned to subscription-based membership services. Dentists can customize the plans to meet the needs of the practice and the patients, leading to potentially successful outcomes for both. However, dental practices also face challenges when implementing and administering these plans.
We'll go over the benefits and drawbacks in determining if you'd like to administer a subscription-based membership plan for your dental practice.
Benefits of Subscription-Based Membership Plans
First, let's explore the benefits these plans provide. These benefits make subscription-based membership services an attractive option for dental practices throughout the country.
Set Your Own Rates
When more dental practices started accepting insurance in the 1970s, dentists saw it as a way of increasing revenue and patient visits. However, they didn't anticipate the oppressive dental fee schedule cutting into profit margins.
As the decades have passed, the fee schedule has made it increasingly difficult for dental practices to make money. It's not unusual for PPOs to force dentists to reduce fees anywhere from 50 percent per procedure, causing professionals to work long hours and perform more procedures to hit profit goals. To be successful, dentists have to go at a rapid pace, creating the risk of burnout.
With a subscription-based membership service, dentists set the cost. They charge the fees upfront on a monthly or annual basis, ensuring that they receive compensation for the plan. Many dentists find that their revenue increases dramatically after adopting these plans. In fact, some practices report a 30 to 50 percent increase in profits than when working with PPOs alone.
However, it's important to remember that subscription-based memberships don't alter network contracts by which dentists may be bound. Be sure to check whether charging a rate other than the network fee schedule to an insured patient is consistent with your obligations under any agreements you may have with an insurance carrier.
Reach More Uninsured Patients
People who don't have dental insurance are unlikely to visit the dentist. Many patients actually overestimate how much dental care would cost, some by as much as 100 percent, which is why they avoid dental appointments altogether. While the uninsured are wary of high procedure costs, an estimated 80 percent are open to subscription-based membership plans.
Some of those patients are already in your system. They come to your practice for dental emergencies but do not handle preventative care. Also, they might push off emergency care to the point that they risk losing a tooth. By offering a dental subscription plan, you can help them take care of their oral health while also ensuring a constant stream of revenue for your practice.
Increase Preventative Care for the Insured
Surprisingly, even the insured are hesitant to go to the dentist as often as needed. Even though they have insurance policies, they still worry about co-pays and deductibles. Thus, they pay for the policy as a whole but don't use it because of the high costs associated with dental visits.
By offering a subscription-based membership plan, you can alleviate these concerns and provide the care your patients want and need. Remember to confirm there are no legal impediments for patients to have both.
Improve Practice Efficiency
Dental practices that take insurance spend countless hours negotiating fees, submitting paperwork, and talking to insurance companies. When you set up your own membership plan, you cut out the middleman. Your practice can spend its time caring for patients instead of cutting through red tape or attempting to get reimbursed.
Improve Patient Loyalty
A subscription-based membership service can also improve your customer loyalty. Let's consider the ways that insurance companies can hinder the relationship between the dentist and the patient. Dentists are often stuck between insurance companies and patients, shouldering the blame when insurance companies deny treatment or make false statements, such as claiming the practice is overcharging for services.
Also, it doesn't pay for the customer to be loyal. If a dental practice finds itself out of network, the patient has no choice but to find another provider. By removing the insurance company, practices can connect with patients and increase loyalty.
Subscription-based membership services can help build loyalty with the uninsured. These services show that you are concerned about those without dental insurance and realize their concern over financing dental care. By offering a plan, a solution is provided, and patients remember and repay this through loyalty.
Drawbacks of Subscription-Based Membership Services
While subscription-based membership services provide some worthy benefits, there are also drawbacks to consider. Some of the issues are only temporary, while others are long-lasting.
Discounted Rates Can Lead to a Loss of Revenue
While dental practices have reported a growth in revenue after implementing subscription-based dental services, it's worth noting that some experience a drop in short-term revenue. Initially, the program could bring in less per visit than billing the insurance. However, patient retention and the competitive advantage could increase revenue down the road.
Challenges Implementing and Managing the Plan
Implementing and managing the plan can be a challenge. First, software is required to administer the plan, which can be expensive. Then a third party will be needed to manage the plan for you, or your staff will have that added responsibility. This can be another burden on staff members that reduces efficiency.
Compliance Is Challenging
Another concern has to do with the legalities of subscription-based membership plans. Some states view these plans as insurance, meaning you have to be mindful of the regulations. Thus, you should not set up a plan without consulting with an attorney first. You will also need to run period compliance checks to ensure that you and your staff are compliant with all local and state laws.
Is a Subscription-Based Membership Service the Right Choice?
Subscription-based membership services can help you make more money in the long term, but the obstacles can also impede success. While numerous practices overcome the challenges and enjoy success, others flounder due to compliance issues, management problems, or short-term drops in revenue. Thus, it's essential to consider your situation to see if you can afford a short-term reduction in profits while staying on top of compliance and management. Then, if you have the resources, you can create a plan and enjoy the benefits down the road.
Author: Cedric Jackson specializes in helping dental practices increase revenue and build patient loyalty. This includes researching ideas such as subscription-based membership services for dental offices.