Weighing the Benefits of Dental Insurance Options

Strategic decision making sounds more like a term reserved for large corporate ventures or key battlefield maneuvers, but it’s just as appropriate when dental practices contemplate insurance options.

For example, does it make sense for your practice to sign on with a PPO plan? Or is fee-for-service the better alternative?

AKT CPAs and Business Consultants is ranked as one of the top 100 accounting firms nationwide. Megan Urban, dental services manager, and Doug Fettig, CPA, dental business manager, frequently help dental practices navigate plan participation and other reimbursement issues. They agree on the importance of dentists understanding the business of their practice when selecting insurance options.

“Depending on where you are and what type of practice you have, what is your overhead?” Urban asks, rhetorically. “You’re losing money if you’re taking on a patient that causes you not to be able to meet your breakeven point and make any kind of profit. It’s giving away dentistry.”

Myriad of Considerations

Urban explains that there are certain states and areas of the US that are saturated with PPOs. As such, dentists often develop a sense that they need to participate in that PPO in order to “play in that area.” It’s a strategy particularly employed by younger dentists who take on a few PPOs in order to obtain new patients.

“We like to call it getting some butts in the chair,” Urban says.

But at some point, as relationships with patients develop, Urban and Fettig work with these dentists to help them determine if it makes sense to drop a particular PPO. And in doing so, how does that change the landscape?

“You can’t just drop [a PPO] and expect things to go on their merry way,” Urban explains. “There are some important considerations to successfully dropping a PPO.”

It starts with running the numbers. What if you drop a PPO and lose 50% of your patients? Of the 50% who stay, will that percentage go up or down? Dentists, Fettig says, need to examine their breakeven point—that point on the ledger where they are breaking even for the month or the year. How will adding or losing a patient impact the bottom line?

“Each dentist has his or her own breakeven point,” Fettig says. “With a PPO client, dentists need to consider whether they’ve reached their breakeven point.”

Going Fee-for-Service

Dentists who decide to remain fee-for-service often focus on what Urban refers to as the new patient experience. In other words, what happens the minute the patients phone the office? How are they treated?

“We all want to go where we like the people and the atmosphere,” Urban says.

That means going above and beyond to establish that rapport with the patient. But also providing the best quality material and the highest technology. That way, if the practice does drop a PPO, it might not lose any of its patients because the patients are happy to pay slightly more to go to that dentist.

“Dentists that we find that can be non-PPO, they’re picking up their patients and their practice in a holistic manner from the moment they walk up to that office,” Fettig says. “And they’re thinking about that entire patient experience.”

In addition, many dentists offer their patients the opportunity to sign up for financing options like CareCredit, a healthcare credit card that allows patients to pay off elective dental treatments over a period of time with no interest.

“Studies show that every year more patients get procedures done because of being able to use Care Credit,” Urban says. “That said, it doesn’t mean every option they offer is one every dentist wants to take, depending on the interest or how much they pay. But yeah, they have some really, really great options out there.”

The Bottom Line

Urban says that over the last 10 to 15 years some dental practices have begun offering patients an opportunity to join wellness plans. There might be an initial, up-front payment of $200, or a monthly payment that covers periodic exams and x-rays. Patients may then be offered a 10% discount on all other treatments.

“We’ve seen those become a little more popular,” she says. “But the trick is finding a way to easily maintain and monitor it so that it doesn’t become a big expense problem. And make sure patients don’t think it’s insurance. It’s just a discount plan.”

Enabling patients to avail themselves of different payment or insurance options can be extremely beneficial to practices. But Urban cautions that dentists need to examine each option closely to see which ones make sense, and which don’t.

“Because when it comes to PPOs, they’re not all created equal.”