As small business owners, your practice revenue and personal income have been greatly affected this year due to COVID-19 closures. You may have experienced a time when it was difficult or impossible to pay the rent or mortgage and perhaps you temporarily laid-off most of your employees.
We all know that recessions happen and now we’re painfully aware that a virus can devastate our businesses. Independent dental practices already struggle to remain competitive with corporate offices and the pressure to participate in PPOs – and now this…
But what if you had other revenue in addition to your in-chair production?
Until recently, a practice’s revenue was based solely upon the production it could generate while treating patients. However, an in-house dental savings plan with recurring revenue will now generate practice income on a predictable schedule, whether the dentist is working in the office or not. Practices with successful plans had thousands of dollars in extra revenue this Spring even though offices were closed.
Think of it as the Costco or Netflix business model for dentists.
Dental savings plans, also referred to as membership or loyalty plans, allow dentists to create a program in their offices that is an alternative to dental insurance. Plans generally have an annual or monthly membership fee and additional discounts on other services. Often, the membership fee will cover all or part of preventive services.
The most important component of a dental savings plan is that over time it creates a growing, predictable revenue stream for practice, especially if the plan processes the annual or monthly enrollments automatically. This not only allows practices to weather fluctuations in monthly collections, but it also creates a valuable asset which increases the value of your practice.
It’s Better Than Participating In-Network With a PPO.
Although implementing a dental saving plan is not a new concept, it has recently become a trend among dental practices. A plan is better for a practice than participating in-network with an insurance company. Here are some of the benefits:
- Dentists choose the discounts offered.
- Insurance companies cant interfere with treatment decisions or reject claims.
- Plans have no waiting period, missing tooth clause, or deductible.
- There is no insurance to verify or claims to submit.
- Plan memberships are non-transferable to another practice, which minimizes the chance of patients leaving the office.
In-house membership plans with automatic re-enrollments grow your practice.
In addition to recurring revenue, dental savings plans benefit dental offices in the following ways:
- New Patient Generation
Uninsured patients have a compelling reason to choose an office that offers a plan, which likely results in less out-of-pocket expenses for the treatments they receive.
- Competitive Advantage in the Community
Any practice with a dental savings plan has a competitive advantage over any practice within the same community that does not have one. Statistics indicate that more Americans than ever will be without dental insurance in the following decade. These patients will be looking for dental offices that will provide them an attractive alternative to insurance.
- Higher Treatment Plan Acceptance
Research shows that a patient who participates in an in-house plan spends two or three times more on her dental care as opposed to patients that are not members in a plan. Offering a plan in your office will provide value to your uninsured patients and they will be more likely to move forward with recommended treatment.
Over 2,000 practices offer an in-house plan for their patients. Now is the time for your practice to prepare for the future and create a plan.