Episode #364: First steps to reduce Insurance, Build a strong and thriving fee for Service Practice

Intro: This is the Less Insurance Dependence podcast show with my good friend Gary Takacs and myself, Naren Arulrajah.

Intro: We appreciate your listenership, your time, and most of all, we appreciate your intention to reduce insurance dependence in your practice. Our goal is to provide information that will help you successfully reduce insurance dependence and convert your practice into a thriving and profitable dental practice that provides you with personal, professional, and financial satisfaction.

Lester De Alwis: Welcome to another episode of the Less Insurance Dependence podcast, your trusted source for insights, strategies, and expert advice to help dental professionals take control of their practices and careers. I am Lester De Alwis, your co-host, and today we are diving into the topic — a very unique topic — and that is Breaking Free from PPOs: A Practice Management Roadmap with Sandy Baird. At Less Insurance Dependence, our mission is simple: to help dentists reduce their reliance on insurance and build profitable, patient-centered, and fulfilling practices.

Before we dive in, a quick message from our sponsor for this podcast. Ekwa Marketing is offering a complimentary marketing strategy meeting, where their experts will show you how to attract high-quality new patients, rank #1 on Google locally, and grow your patient flow.

So if you’ve ever wondered about knowing where your online visibility stands, you can go ahead and book a complimentary strategy session at: lessinsurancedependence.com/marketing-strategy-meeting

Sandy Baird: Tracking and analyzing their data — that’s the most important. They’ve got to know how much they’re writing off, mm-hmm, for each plan. They need to know what percentage they’re writing off, how much money they’re writing off. And I will tell you that the number one financial leak in any dental practice is what they pay to their PPOs. It’s a marketing cost, and it’s very expensive — very expensive. It can be as much as 30 to 40% of your production. So this is a very worthy goal: to become less dependent on these insurance companies, because they are costing you a lot of money.

So you’ve got to start tracking your data, and then you’ve got to start analyzing it. Like I said — the percentage you’re writing off for each plan, the amount of production you’re creating with each plan, how many patients are with each plan, what your new patient average is, how many new patients are you getting in?

Are you going to be able — you are going to lose some patients. You may not lose them all when you drop a plan, but you’re gonna lose some. Is your new patient flow going to be able to fill in?

Now, the trick — the wonderful part about this — is when you lose two insurance PPO patients, you only have to replace them with one non-PPO patient. Mm-hmm. So that’s kind of a rough ratio, but it’s pretty close. But you’ve got to have that new patient flow to be able.

Now, you also need to look at your schedule. If you’ve got a lot of holes in your schedule that you cannot fill, you cannot afford to drop your PPOs yet. You have to build your practice up to the maximum point where, when you drop that PPO, you have the new patient flow and the time to get the new patients in, in order to make up for that difference.

And I will tell you — I’ve done this for a number of dentists, and each time, they are actually producing more after they drop PPO than less. So if you’ve got the numbers, and you’re analyzing them, and you’re following them, and you can prove — and you know in your mind — that you can afford to lose a number of patients, yes, then I think you should definitely start doing it.

And I guess the other questions will cover some of the other stuff I want to tell, so let’s go ahead and go to the—

Lester De Alwis: Question. So basically the first step is tracking your numbers, right?

Sandy Baird: Absolutely. Okay? Absolutely. You’ve got to have the hard data. You’ve got to have the hard evidence.

Lester De Alwis: That’s a great starting point, Sandy, and I love that you emphasize that — you know, that difference when you start tracking the numbers. Now, how can dentists effectively analyze their insurance participation and decide which plans to keep or drop based on patient volume and profitability?

Sandy Baird: Well, the answer to that is basically mining software. You have to use mining software in some form or fashion. Hmm. And there are basically three different forms it comes in.

There’s the proprietorship mining, which is something that you as a dentist cannot buy — that consultants use or, um, accountants use or, you know, an analyst uses — that a dentist cannot buy. And I have — I use a proprietorship data mining software because it gets the figures, all the figures I need. Because you have to — one or two figures are not gonna tell you anything. You have to get the big picture.

But then a lot of our software — Eaglesoft, Dentrix, Open Dental — they have built into their software some mining data that will go in there. And some are better than the others. Some can be very confusing. They can give you a list: "Okay, this is what you charged your patient, this is what the PPO plan paid, and this is what you wrote off," and these are — and it can be very confusing sometimes, mm-hmm. So you have to do some calculations on that. But some software, like I said, do it better than others.

And there are some software that do not have this ability. Their reports do not have the ability to analyze this — the dependency on PPOs — all the data from PPOs.

Now, the third way to do this is to purchase it. You can purchase, as a dentist, by subscription.

There are companies out there — a number of companies — and more and more companies are getting involved in this. And there are quite a few of them. But the problem is — the problem I find is — because they’re independent, mm-hmm, they have to be licensed by the software they’re mining.

So, for instance, a lot of the independent plans that you buy on a subscription, mm-hmm, will only mine Eaglesoft and Open Dental, okay? Because none of the other dental software are giving them permission to do that. Hmm. And you have to — and that’s part of what you pay for in subscriptions every month.

So if you’re using a software that is not supported by these subscriptions, then you have to manually go in there and do the reports. And if your software doesn’t do the reports properly, you are going to have a very hard time figuring out your statistics.

So, um, that’s kind of the trick there, but that’s the only way you can do it — without having to sit there and manually count, “Okay, how many patients are in MetLife? How many pa—” I mean, no dentist is going to do that.

Lester De Alwis: Yeah.

Sandy Baird: And no consultant wants to do that either. Yeah. So — and it’s not consistent. You need that system to be done the same way each time. So that’s how they can analyze it.

But then, when they get that data, mm-hmm, the important thing is they need to look at the numbers I told you to and pick the — if you think your practice is ready to take these steps, yeah — is to drop the plan. Do it in stages. Don’t do it all at once. Do it in stages.

And so you look at the plan with the least number of patients in it — which usually is the lowest production — and you drop that one.

Now, I will tell you, you have to be patient with dropping insurance. This does not happen overnight. It’s like pulling teeth, so to say, off it. The insurances don’t want you to drop the PPOs.

Lester De Alwis: Exactly.

Sandy Baird: Mm-hmm. They’re resisting it. And they will draw it out for months and months, and then all of a sudden they’ll spring it on you and say, “Okay, yeah, we dropped it last week.”

Sandy Baird: And that puts you in a pretty bad position. Yeah. So you’ve got to think ahead. You’ve got to think ahead and be prepared for that.

Now, some of them are much easier than others, mm-hmm. Some can do it really pretty promptly, but most of them cannot. And of course, you are not going to pick a plan that has 30% of your patients in it to drop first — I mean, that would be suicide. Yeah. So I think everybody can pretty much figure that out.

Lester De Alwis: Yeah. Um, I think that makes perfect sense. And I think, like you said, data really tells the story. Now, when reducing insurance participation, what are the most effective strategies for communicating with patients and retaining them during the transition?

Sandy Baird: Don’t wait till the last minute to tell them. Don’t do that. That’s one way to get rid of a patient — “Why didn’t you tell me? I would’ve changed my appointment,” or “What are you talking about?” No. You have to let them know ahead of time. And you have to let them know by multiple methods.

You have to make personal phone calls from the office. So, in other words — okay, let’s say you’re going to drop Cigna, just to give you an example. Okay? You run the report that tells you every patient that is covered by Cigna. Somebody at the front desk starts making calls, and most of the time, the person will not pick up. Hmm. So they need to have some scripting and training on exactly how to say:

“Mrs. Jones, I wanted to call and talk to you about your insurance plan. This is an important topic that I need to talk to you about as soon as possible, so please call me back.”

Hmm. So, things like that — you have to train them in certain ways. But if you try to drop them all at one time, the front desk would be slammed. There’s no way you can do it.

Lester De Alwis: Overwhelming.

Sandy Baird: But no — and then you need to send texts. And then, if you want to, you can choose — mail is not a bad— hard copy mail is not a bad option, because you have a lot more room to explain why you’re doing this. Yeah. Because you don’t have a lot of attention span — more than room — in a voicemail. You’ve just got to really encourage them to call you back.

“You have an appointment coming up. I have some very important information to talk to you about that.”

So it’s — that’s really the first thing you can do to keep your patient volume and profitability up where it is: do it, stage it, start with the lowest count, and do that mining software — get that information. Mm-hmm.

But mainly, it’s communication and customer service. You’ve got to prepare your team — and we’re going to talk about that in a few minutes — yes, you have to prepare your team way ahead of time. You’ve got to make sure your team understands the why.

Lester De Alwis: Yeah.

Sandy Baird: Yeah. So let’s go on.

Lester De Alwis: Exactly. So it’s amazing, like, how you mentioned how much patient trust can impact a smooth transition when it comes to this. Absolutely. And now, what role does the dental team play in successfully managing a transition away from PPOs? And how can leaders prepare their staff to handle patient questions and maintain morale?

Sandy Baird: Your staff can make it a breeze.

Lester De Alwis: Mm-hmm. Hmm.

Sandy Baird: If they think it’s wrong that you’re dropping insurance plans — if you haven’t spent time training them, and/or somebody hasn’t spent time training them, talking to them about the advantages to them, yeah, the team members — and not to the doctor’s pocketbook — and the advantages to the patients, then it’s going to backfire on you.

You are not going to retain those patients, because the front desk person who says, “I don’t know why he’s dropping this plan. I mean, I don’t think it’s fair to you at all…” — what kind of response is that patient going to have?

So the dental team is key. And you have to start way ahead — way ahead of time — talking to them, meeting with them. Of course, you’re doing your team meetings every month. You don’t want to miss those, ever. Mm-hmm. But take advantage of explaining what limitations insurance has put on them.

Sandy Baird: I mean, for insurance — I mean, for example, PPOs encourage dentists to act in certain ways.

Lester De Alwis: Yeah.

Sandy Baird: What I mean is it forces dentists — because of the large write-offs — I’ve seen write-offs as much as 50%, mm-hmm, on a regular basis, because they’re, you know, writing off $500,000 a year at least, maybe a, you know, a million a year depending on the size of their practice to insurance. It forces dentists to think quantity over quality.

Lester De Alwis: Yeah.

Sandy Baird: They have to get more patients in because they are not getting their full fees.

Lester De Alwis: Exactly.

Sandy Baird: It also encourages them to buy lower quality materials, lower quality technology.

Lester De Alwis: Hmm.

Sandy Baird: Because they can’t afford it — because they’re giving so much to the insurance company.

It also tries to — PPOs try to illustrate to the patient that the dentist is overcharging them.

Lester De Alwis: Yeah. You see that. Yeah.

Sandy Baird: Yes. I mean, and it also encourages the dentist to think that they can’t recommend treatment that’s not covered by their PPO. It makes them start treating the PPO and not the patients.

Lester De Alwis: Yeah.

Sandy Baird: So it also causes a lot of headaches for the front desk — the front desk people, the insurance, the financial team. They waste thousands of hours on managing…

Talk about the advantage to the team — the fewer headaches. Talk about how you can spend more time with the patients because it’s not quantity over quality anymore.

So I think these are the kinds of things you have to really talk to the team about. Talk to them about that and let them — I mean, see what the advantages would be for them, the patients, and the practice by dropping this.

Because a lot of your employees are dependent on insurance in different ways in their lives.

Lester De Alwis: Yeah.

Sandy Baird: And they’ve been taught that. A lot of people have been taught, “If you don’t have insurance — dental insurance — you can’t go to the dentist.”

You know, I’ll say — somebody will say, “Oh, I haven’t been to the dentist in five years,” and I’ll say, “Oh really? Why?” “Well, my insurance dropped, and now I can’t go to the dentist.”

Lester De Alwis: Exactly. So, so basically…

Sandy Baird: Yes.

Lester De Alwis: Go ahead. The advantages way outweigh the disadvantages.

Sandy Baird: Exactly.

Lester De Alwis: Exactly. Yeah.

Sandy Baird: Exactly. And these employees — these team members — you have need to practice these scripts. You need to talk to them. So let’s talk about how we’re going to explain all this to the patient.

Yeah. How are we gonna justify this to the patient? How— first of all, you’ve got to build the trust and relationship with them.

Lester De Alwis: Yeah.

Sandy Baird: Those are the two things that have to come first — is that internal marketing, that relationship building and trust.

And then the patient— the team members — need to believe it’s the right thing. And then they need to be able to communicate that to the patient. And that takes training, practice, role-playing, scripting — until they’re comfortable enough and believe it themselves.

Lester De Alwis: Exactly. Amazing. Amazing. That’s an empowering message to anyone listening in to this episode today — and the energy that you bring in as well.

And the final question now — now imagine we come out of, come out of — like, break — we break free and successfully reduce insurance dependence. What are the next steps to strengthen profitability and maintain growth long term?

Sandy Baird: You’ve got to keep developing your practice. You’ve got to keep training — training yourself and your team — to build this trust, to build these relationships, to spend one-on-one… you know, really give patients your full attention.

Run on time — always. Do not break their trust. Don’t have any questions about finances — that needs to be all cleared up long before the treatment’s done. If they have surprises with finances, you’re breaking their trust. You’re breaking your relationship.

You’ve got to explain to them why you’re recommending this — why do you need this? It all comes down to communication and preparing the patient. Don’t surprise them when you’re doing clinical work. You know, say:

“Oh, I just want to tell you, Mrs. Baird, this is going to taste kind of nasty for a minute or two — not long, only a minute or two, ten seconds. So just — it’ll pass really quickly.”

But preparing them — patients don’t like surprises.

Lester De Alwis: Exactly.

Sandy Baird: And I think that’s — that you have to train your team to think ahead and prepare the patient ahead of time. Because they want something predictable.

They want to walk in and they want to have fun. I mean, everybody thinks going to the dentist is, “Oh God…” and it’s — no. You can make it fun. If you all enjoy your work and enjoy your patients, it will be fun for the patient too.

Lester De Alwis: Exactly. Exactly. Such practical — and I mean practical — strategies and actionable strategies you just mentioned today.

And a reminder that this journey is about consistency and confidence.

Sandy Baird: Yes.

Lester De Alwis: And as much as it’s about the numbers, it’s all about the confidence and the consistency.

So Sandy, thank you so much for joining us today and sharing your invaluable insights on how dentists can strategically and confidently move towards insurance dependence.

Sandy Baird: Thank you for having me. I thank you very much, Lester.

Lester De Alwis: So the key takeaway from today’s episode is that reducing insurance dependence doesn’t happen overnight. It’s a process built on patient trust, data, and a team that’s aligned with your practice mission.

And as always, this podcast is about taking action. So first off, if you want to attract high-quality patients and grow beyond PPOs, schedule a complimentary marketing strategy meeting with Ekwa Marketing at: lessinsurancedependence.com/marketing-strategy-meeting

Secondly, if you’re ready to create a thriving fee-for-service practice, and if you’re looking for mentorship with personalized coaching, book a coaching strategy meeting with Gary Takacs at:

thrivingdentist.com/csm

Now, both of these are complimentary resources and are designed to help you take meaningful steps toward the practice and the life you truly deserve.

Thank you for joining us today, and a big thank you again to Sandy Baird for sharing her expertise.

Until next time, keep moving towards a thriving, insurance-independent practice.