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Episode 177: Look at Your PPO Adjustments as a Marketing Expense

March 03, 2022
In this episode, Gary and Naren discuss why you should consider your PPO adjustments as a marketing expense and master digital marketing.
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In general, PPO adjustments are not written-off as an expense because you are not writing a check to the insurance company. Hence, dentists must learn to look at their insurance adjustments as a marketing expense and know how much they spend on the insurance plan. In this episode, Gary discusses why insurance adjustments should be written off as a marketing expense and provides valuable tips on mastering the power of digital marketing to replace this expense.

Episode Timestamps

  • 00:00:51 – Intro to the episode
  • 00:01:11 – Quick announcement
  • 00:03:07 – PPO insurance adjustments from an accounting perspective
  • 00:03:28 – Looking at insurance adjustments as a marketing expense
  • 00:06:53 – Importance of having own digital marketing plan
  • 00:08:11 – PPO write-off calculator
  • 00:11:18 – 4 steps which will put you on path to master Digital Marketing

G: Welcome to another episode of the Less Insurance Dependence podcast, the official podcast of RIDA – reducing insurance dependence academy. Hey, we have a great episode for you today. It is titled look at your PPO adjustments as a marketing expense. Hey, before we get into that topic, a quick announcement to make. Coming up at the end of March, about a month from the time that this episode is published, we have our very first thriving dentist MBA live stream workshop of 2022, and that is coming up – it is a 9-hour course spread out over 3 evenings, it will be March 29th 30th and 31st. 7 to 10 pm Eastern time, again on the 29th, 30th, and 31st of March. In the thriving dentist, MBA live stream workshop, I cover the 10 elements of a thriving practice; as I am presenting this honest to God, guys, I feel like I am a kid in a Candy store because I feel like each element is the most important! When we go through each one of the 10 elements. If you are interested in registering, very affordable CE, you will actually get 9 hours of CE; very affordable, you can register at thriving dentist.com/MBA. I hope to see you there; it can be information that you will be able to immediately apply in your practice, although it is live stream – we do limit attendance, and we limit attendance because of the fact that I run it more like a workshop than a lecture. So you can go to the website, take a look if other seats are available, and I would encourage you to come join us. I think you can make a massive difference in your practice.

N: Gary, when you first talked about you know PPO adjustments as a marketing expense, you know a light bulb went off, and the funny thing is like most dentists, I never looked at it that way because it is not a line item on your profit and loss statement I have seen profit and loss statements and income statements in various practices, but it is never mentioned as a marketing expense, in other words, the write off from the PPO plan but when you started talking – 

G: For a minute – accounting perspective Naren, it is not treated as an expense because you are not actually writing a cheque to the insurance company, but you might as well! Because they acutely just take it right off the top! 

N: Yeah, it is like a payroll tax, right? It’s just taken off the top; you don’t even see it.

G: You don’t even see it, and because of that, I team dentists to look at their insurance adjustments as a marketing expense, and let me be very clear I don’t want to assume anything; an insurance adjustment is a difference between your usual fee and your contracted fee –that difference is in adjustments or in lay terms a write off – you are forced to write that off, now here is the part that can be challenging for dentist Naren, there are 2 ways that a dentist can enter his or her fees, into their practice management software and both are accepted in accounting concepts. One way would be to enter your usual fee, your UCR fee. So enter those fees into your practice management software, and then when you get the EOB from the insurance company, you enter what you actually got paid, and it would create an adjustment category, and then you could actually run a report and determine how much money you are actually writing off every year – but interestingly enough from data – I knew that only 10 percent of the dentists in the country, use that format. Only 10 percent, the other 90 percent of the dentists enter their contracted fees into their practice management software, and when they enter the contracted fees and by the way all 3 major practice management software programs, dentistry Eagle soft and open dental encourages you to enter your contracted fees, and it is not insidious that they encourage you to do that, because it makes it easier to track collections – because then it is one to one, you enter your contracted fee, and so you never know what you are actually writing off, so because of that I prefer the former way of doing it – where you enter your usual, customary fee.

N: Right

G: But only 10 percent of the dentists do that, so most dentists actually have no idea what they are writing off. Is this making sense, Naren, as I explain now?

N: Yeah, absolutely, Gary. I think you know because it is a line item in their accounting, they don’t notice it – you know, they don’t realise it they don’t think about it – and yet it is their largest expense – it is their largest expense, I mean we have done the math with some people they answer three questions, and we have found people writing off 300, 400 even a million, even 300,000 400,000 even a million dollars every single year, eerie year and you explained it so brilliantly – like the only thing the insurance company does is give you knew patients, so what else is it if it’s not a marketing expense right?

G: So it is a marketing expense

N: They don’t run your practice; they don’t help you improve your technology; they don’t tell you, teach you how to do better – they don’t do anything except give you new patients! That is it – 

G: You are paying the insurance clammy to provide you patients, and does it make and today as we are recording this in early 2022, the average adjustment is between 45 and 50 percent, and that is the difference between your usual fee, and your contracted fees, it is actually between 45 and 50 percent Now does it make any sense? To pay the insurance claims 45 to 50 percent of your revenue, to provide you with new paints – in a single word – the answer is no! Absolutely not! It does not! Because you could instead pay a very small fraction of that and develop your own digital marketing plan to attract patients, you will not only save a ton of money, but you will also now attract people who are not choosing you, only because you are on their insurance platform and it has the added benefit for people choosing you for other reasons, so there are so many different benefits we will talk about that as well, so many different benefits – you know what might be useful Naren?

N: Gary, can I ask you a quick question? You said you could spend a fraction of the fees, right? How much do you spend at Life Smiles?

G: So, as a percentage right now, around one point 2 percent of my revenue. 1.2 percent of my revenue. Compared to- it depends what percentage of my practice is PPO, to determine how much you are actually spending, but what we normally see is practices that are involved with PPO plans have such a higher percentage of PPO patients, it is a high number – it is 70 percent, 80 percent, 85 percent, 90 percent – but imagine comparing, 45 percent paid to the insurance companies vs. 1.2 percent, which would you rather spend?

N: (Laughs)

G: Take as long as you like

N: Right!

G: Take as long as you like, but Naren, you helped me develop a PPO Write off calculator for the 90 percent of the dentists that don’t know what they are writing off; I will ask that to a potential client – hey, do you know how much you are writing off? No, I know it is a large amount, but I don’t know how much! And we simply enter in some very simple information that you designed a custom excel spreadsheet that does the heavy lifting when it comes to the math, and they can enter in some simple information and quickly discover exactly how much they are writing off every year, and that information is power. Without that information, you can’t really make a good decision so Naren, let’s put the link in the show notes to our insurance write of calculator so any of our listeners can go to that – 

N: Yes

G: They can click that, and then you can enter in simple information; by the way, if you don’t know the exact numbers, just use an educated guess; it will give you a ballpark figure, very simple information, and that information has helped, absolutely confidential and never shared we will simply send it back to you so you know how much you are writing off and now you can make an informed decision about participating with PPO plans because now you know how much it is actually costing you. So that would be the first step here is to find out how much it is costing you. Now I will tell our listeners when you get that email back from us – with the amount of how much you’re writing off, be sure that you are sitting down!

N: (Laughs)

G: Because you might be floored when you discover what that amount is. So be sure you are sitting down and brace yourself, and you are now about to find out what it is actually costing you. Without that information, you simply can’t make a good decision.

N: Right, yeah, because if you don’t know what you are actually spending on quote-unquote marketing as a form of write-off, then how do you make the decision on what to do and what not to do to make 2022 your best year and then build from that?

G: Now there is kind of an emotional way to look at this too – that might help some of our listeners, and that is – those write-offs are simply aligning the pockets of the fat cat executives at the insurance company and their board of directors. 

N: Yes 

G: And to sit down and give you a reference – the CEOS annual salaries are millions and millions of dollars. 

N: It is 10s of millions in some cases.

G: In some cases – Sygna recently raised their CEO from 19.2 million dollars a year to 67 million dollars a year, so when you want to think about it coming from an emotional perspective, think about those write-offs that you have to endure as going right into the pocket of the fat cat executives at the insurance companies. I think that might make you motivated to want to make some changes.

N: Absolutely!

G: Yeah, so let’s talk about replacing it then. What do you replace it with? Well, we replace it by mastering digital marketing, just follow my lead and do what we did – replace it with mastering digital marketing, and I want to go through a little primer in this episode on 4 things that you can do that will put you on the path to mastering digital marketing.

N: Gary-

G: Let’s recognize Naren that digital marketing today is all about one word – 

N: (Laughs)

G: And that word is Google. It is about mastering Google, you know I always ask my audiences what the number one search engine in the world is, and everyone says Google, and then I say what the number 2 search engine is, and I get answers that a thrown, Bing, other different search engines and I said – no, no, no it is actually YouTube, which is owned by – drum roll please – Google, right back to Google.

N: Right

G: So Google dominates that landscape, so mastering digital marketing is really about learning how to play the Google game, and the great news is you know Naren I have to say – when I became the practice owner in 2007, I felt like marketing back then was this dark voodoo science. That was just a big mystery – 

N: Right.

G: And Paul and I would do things in the practice that would fall under our marketing category, and then it is kind of like throwing stuff against the wall and see what sticks, and it was honestly frustrating Naren because I like to operate more in a scientific role, but today – fast forward that was 07, fast forward now 15 years, 2022 and I feel like it is very much a science, and it is a science that anybody can figure out – not easy I mean if you ask Google, you know how do I get ranked on page one of the Google search they won’t tell you – that is their ranking algorithm, is their secret sauce but they do give us plenty of guidelines on how to present your information in such a way that it will allow you to be found on page one of a Google search. A very simple definition of whether your website is working or not – a very simple definition is, does your website appear on page one when someone from your community is searching for a dentist – you know if I look at websites that are a combination Naren of form and function. Form and function – Form is how it looks, and form is completely subjective. What looks good to one person does not look good to someone else. Even the colours, the fonts, the mix of texts vs. graphics – all of that is a matter of your own perspective and so very subjective.

N: Right

G: When we get to function – a website works if you show up on page one when someone in your how it looks to be objective in terms of how it works, and today in 2022, I honestly feel like it is the science anyone can master – I feel like I can put my hand on a picket if I want to trim the hose higher or lower – I can put my hand on the marketing picket, and I can dial it up, or I can dial it back, based on what our needs are of the practice and so can you. So let’s go through 4 – criteria 4 the fundamentals of mastering digital marketing. I will go through this fairly quickly number 1 reviews. Reviews are very important in the eyes and mind of Google. Your Google reviews are very important – so there are 3 parts of the review process that Gogol is interested in. Number 1 is the sheer number of reviews you have, Google reviews – the more, the better, the more reviews you have, the better. Secondly, they are interested in the velocity of those reviews and how quickly new reviews are coming in – Google has told us that if you are a practice that has reviews coming in on a regular basis, you will have a higher ranking. In the ranking algorithm and number 3 is the character of the reviews – meaning how they are written, so a patient can simply give you a 5-star review and not write any words, and that is a useful review – because it is another 5-star review or sometimes a patient might write a review that has 2 words – great office. Well, certainly that would be useful! But not nearly as useful as a long-form narrative review – what we like to playfully call a love letter review. A love letter review is where a patient writes imagine this – 3 4 5 sentences about everything they love about the office. All those words have become part of the search now.

N: Yeah

G: And Google tells us that those reviews are worth more! Not all reviews are created equal! Those reviews are worth more. So there are 3 things that you can do to play the review – criteria that will help you rank higher in Google, 

N: And Google looks at 200 factors they make changes to the algorithm, 3000 times – and Google reviews are a key part of it – at least 10 percent of the algorithm is based on Goggle reviews, and the other point I want to mention is this is kind of the secret sauce as to why Google is worth 2 trillion dollars. 90 percent of the web pages on the internet get 0 traffic from Google. 0 which means the top 4 percent get more than 90 percent of the traffic, so if you can be in the top 4 percent when it comes to doing all the things that Google wants you to do – you are going to get such a large amount of free traffic, free patients, you don’t need PPO anymore, and you can send a fraction like Gary said.

G: A small fraction!

N: Yes

G: Well, we talked bot one of those 4 criteria that is going to get you in that 4 percent, let’s talk about the other 3 – next would be I am going to get a little nerdy with you stick with me on this – I am going to use an Acronym – NAP management. NAP management – NAP is an acronym in Google that stands for Name Address Phone. Now what that simply refers to the way your practice is represented across the various directories, on the internet – and Google wants your name, address, and phone to be represented consistently across the directories, down to punctuation – down to the way it is punctuated because if your practice is represented consistently – Google is going to see you in one massive listing as opposed to a bunch of different listing as they see you in a different practice. So we have to have a consistent way your practice is represented, for example, Life Smiles – our practice, we like to spell it all in one word – LifeSmiles no space in between we are on shade boulevard we like to abbreviate Boulevard – BLVD. Now it doesn’t matter whether you spell out boulevard or not or doesn’t matter if you spell out life smiles in one or 2 words; what matters is being represented consistently across the directories, and you EKWA, my digital marketing agency does. You have a team that scrubs the internet to find these different profiles of our practice, where you will make – it is editable these profiles are editable – your team will go in and then change them to the consistent way that we will like to be represented so that Google sees us and you know in a much stronger light, so NAP – name address phone management. Let me go to the 3rd one – original content – this is the killer of so many offices. 

Google penalises duplicate content. If the content on your website is on other websites across the internet, regardless of where they are located, you will not get on page one of a Google search now; how is a duplicate – how does duplicate content happen? It happens many ways, but there are 2 predominant ways – one way is the company that wrote your website basically uses a template format. They may give you an exclusive for your zip code, but they are going to use the same content with dozens or hundreds of practices all over the internet, and then your website has duplicate content. Another way that it happens is a bit more insidious – and that is dentists will be wanting to build themselves a website – they will go online they will find content that they like on other dentists’ websites – and they simply cut and paste ad make it their own, and again if that happens you get penalised. It is not just the person copying that gets penalised; it is the person they are copying from 0 that gets penalised because now it is duplicate content, so you have to have original content; otherwise, you are not going to get on page one. Naren – Lila Stone, your marketing director, shared with me when she does marketing strategy meetings with potential clients, shared with me that about 70 percent of the time, she finds duplicate content, and the dentist did not know why he or she was not getting on page one and now we know one of the reasons why for sure. 

Now let me go to the 4th point, 4th metric on how to kind of master digital marketing in the eyes of Google, and that is through search engine optimization – SEO, we use the acronym SEO and the metrics associated with SEO. So it really comes down to, in a very simple sense, how many keywords and phrases do your practice have listed on page 1 of a Google search? How many keywords and phrases? Relative to dentistry relative to the type of dentistry you like to do – are you ranking on page one of a Google search? Well, if you put those 4 details together, master reviews – have consistent NAP magnet, have original content, and pay attention not your search engine optimization – keywords and phrases and then look at the Google analytics related to those, if you do that consistently you will be well on your path to mastering digital marketing and replacing the massive amount of money you are heading into the insurance companies with a much less expensive source of new patients and perhaps even qualitatively a better new source of patients because these patients arrived at your practice without the insurance baggage and the insurance mindset that they have if they find you because you are part of a PPO plan –

 

N: Absolutely, Gary, couple of points that I want to add is – you and I did n extensive 2 part podcast on the thriving dentist show where we talk about a few other things that Google looks at, and I was just looking it up – it was thriving dentist episode 514 and 515 we put a link to that – 

G: We did those back to back; what we did there was so much content on mastering digital marketing that we broke those down, and that is – thank you, Naren, that is a great thing to do for our LID podcast listeners. Let’s put those links in the show notes – and then again, you can click on those; they are free. If I have to whet your appetite on wanting to learn more about marketing, you are going to get that appetite satiated by listening to those 2 podcasts. 

N: The other 2 resources we can share as a marketing strategy meeting Gary – perhaps you can talk about your experience and what it is, or we can explain it and-

G: Yeah, I did it 5 years ago when I was changing agencies, and I was looking at using EKWA – your agency Naren, and a marketing strategy meeting was with Lila Stone, your director of marketing 0 she will spend about 6 hours actually doing research and preparation for that meeting, and she will share everything she finds, and she will show you how you look in the eyes and mind of Google – very valuable information. She will run that check to let you know whether you have duplicate content or not – she has an app h can use to deter in whether you have got – now it is worth it to do the marketing strategy meeting to learn whether you have duplicate content, but you are going to learn 20 other things on top of that – you will earn a zillion other things, but maybe now you will learn one of the things is like a sledgehammer hitting me over the head and why you are not on a page on- very- and you do that as a courtesy to any of our listeners at no cost so let us put a link there, and so we have 4 links on this episode, one is the insurance write off calculator – now we have got 2 more links on the 

podcast episodes on the thriving dentist show about mastering digital marketing part 1 and mastering digital marketing part 2, and then we are going to share a link to the marketing strategy meeting so you can schedule a marketing strategy meeting with Lila Stone – 

N: That is EKWA.com/msm – 

G: So that is EKWA.com/msm, shorthand for marketing strategy meeting. Well, hey, let’s put a ribbon on this one, but from this moment on, I want every one of our listeners to think of your PPO adjustments as a marketing expense! Once you start seeing it that way, the entire world is going to look different for you, and you are going to want to take action to successfully drop PPO plans – hey, on that note, thank you for being part of the less insurance dependence community we appreciate each and every one of you – we look forward to connecting with you next week on another less insurance dependence podcast episode. 

Resources


Gary Takacs

Gary Takacs One of Gary's most significant achievements as a dental practice management coach is transforming his own practice, LifeSmiles, from one that was infected with PPO plans, no effective marketing strategy, and an overhead of 80% to a very successful dental practice that is currently one of the top-performing practices in the US.

With over 2,200 coaching clients, Gary has first-hand experience transforming insurance-dependent practices into thriving and profitable practices.

Through his Personalized Coaching Program, Gary shares access to the systems, strategies, processes, and experience gained over 41 years of coaching dentists and transforming over 2200 practices worldwide.

Learn More:: www.thrivingdentist.com/coaching/
Connect with Gary Takacs on Linkedin

Naren Arulrajah

Naren ArulrajahAs CEO of Ekwa Marketing, Naren has over a decade of experience working with dental practices and helping them attract the ideal type of patients to their practices. It is his goal to help dentists do more of the type of dentistry they love with the help and support of effective digital marketing.

Ekwa’s "Done-For-You" Digital Marketing model blends fundamental persuasion principles with an all-in-one Digital Marketing solution to help your ideal patients find you and choose you for reasons other than being on their insurance plan.

If you’re interested in finding out if Ekwa is the right fit for you and your practice, book a Free Marketing Strategy Meeting with Ekwa’s Marketing Director, Lila Stone.

Book Free Marketing Strategy Meeting: www.lessinsurancedependence.com/marketing-strategy-meeting/

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