Phasing Out of Dental PPOs: The New Era for Dental Practices

Written by Jordon Comstock

An article from PPO Advisors discusses the trend of dental practices moving out of network with PPOs due to the unsustainable financial losses from low reimbursement rates, which can significantly impact practice revenue (PPO Advisors). BoomCloud's PPO loss calculator provides insights into how much revenue dental practices lose by remaining in PPO contracts, emphasizing the substantial financial impact of these lower reimbursement rates (BoomCloud). DrBicuspid.com also explains how negotiating better PPO dental fee schedules is crucial but challenging, highlighting the significant income losses practices face under current PPO contracts (DrBicuspid).

To combat these losses, many dental practices are adopting innovative strategies, including the introduction of dental membership plans. These plans offer patients an alternative to traditional dental insurance, providing them with access to preventive care and discounts on other treatments for a monthly or annual fee. This not only helps retain patients but also ensures a steady cash flow for the practice.

Implementing dental membership plans helps practices generate predictable, recurring revenue, reduce dependence on PPOs, and increase patient loyalty by offering more transparent and accessible care options (BoomCloud). Unitas Dental supports this approach, noting that dental membership plans can help practices maintain financial stability while providing attractive alternatives to traditional insurance, thus fostering better patient retention and satisfaction (Unitas Dental).

Implementing Dental Membership Plans

Dental membership plans are becoming a popular solution for practices looking to reduce their dependence on PPOs. By offering these plans, practices can provide patients with an affordable and straightforward way to receive the dental care they need. The benefits of these plans are multifaceted:

    
• Steady Revenue Stream: Membership plans generate consistent monthly or annual revenue, which can stabilize the financial performance of the practice.
    
• Improved Patient Loyalty: Patients who enroll in membership plans are more likely to stay with the practice and adhere to regular check-ups and treatments.
    
• Enhanced Patient Care: With membership plans, patients are more likely to seek preventive care, leading to better overall oral health outcomes.

Marketing and Communication Strategies

To successfully transition away from PPOs and promote membership plans, dental practices must employ effective marketing and communication strategies. Here are some approaches that have proven successful:

    
• Digital Marketing: Utilize social media platforms, email campaigns, and the practice’s website to inform patients about the benefits of the new membership plans.
    
• In-Office Promotions: Display information about the membership plans in the office and discuss the benefits with patients during their visits.
    
• Community Engagement: Participate in community events and local health fairs to raise awareness about the membership plans.

How BoomCloud Can Help

BoomCloud offers a comprehensive platform designed to help dental practices create, manage, and grow their membership plans. By using BoomCloud, practices can:

    
• Easily set up and customize membership plans tailored to their patient base.
    
• Manage member enrollment, billing, and renewals seamlessly.
    
• Access powerful analytics and reporting tools to track the performance of their plans and make data-driven decisions.
    
• Integrate with existing practice management software to streamline operations.

BoomCloud's user-friendly interface and robust features make it an invaluable tool for practices looking to move away from PPOs and enhance their financial stability.

Spreading the Word with Weave

Once a dental practice has established a membership plan with the help of BoomCloud, it’s crucial to effectively communicate this offering to both current and potential patients. Weave, a communication platform for dental practices, can play a pivotal role in this process. Here’s how Weave can help:

    
• Active Patient Communication: Use Weave’s automated messaging system to inform active patients about the new membership plans, highlighting the benefits and cost savings.
    
• Re-engage Inactive Patients: Reach out to inactive patients through targeted messages, encouraging them to return to the practice and consider joining the membership plan.
    
• Attract Uninsured Patients: Promote the membership plans to uninsured patients, offering them a viable alternative to traditional dental insurance.

Case Study: Wood River Dental's Successful Transition to a Membership-Based Model

Background

Wood River Dental, a thriving dental practice, faced significant revenue losses due to the constraints of Preferred Provider Organization (PPO) contracts. With annual revenues around $2.0 million, the practice was losing approximately 40% of its potential income—an estimated $800,000—due to the lower reimbursement rates mandated by PPOs. To counteract this loss, Wood River Dental decided to implement a dental membership plan (Boomcloud).

The Strategy

Wood River Dental introduced a membership plan at $50 per month, targeting both insured and uninsured patients. This plan offered patients access to preventive care and discounts on other treatments, providing an affordable alternative to traditional dental insurance. The practice used several key strategies to attract and retain members:

    
• Referral Marketing: Wood River Dental leveraged referral marketing to attract uninsured patients. They incentivized existing patients to refer friends and family by offering discounts on future services or additional benefits within the membership plan.
    
• Communication Software: To effectively spread the word about the new membership plan, Wood River Dental utilized advanced communication software. This included automated messaging systems to inform active patients, targeted messages to re-engage inactive patients, and promotional campaigns aimed at attracting uninsured individuals.
    
• BoomCloud Platform: Wood River Dental partnered with BoomCloud to manage and scale their membership program. BoomCloud’s platform allowed the practice to easily set up and customize their membership plans, manage member enrollment, billing, and renewals seamlessly, and access powerful analytics and reporting tools to track the performance of their plans.

Results

Within a short period, Wood River Dental signed up 715 active membership patients. The impact of this success was profound:

    
• Monthly Recurring Revenue (MRR): With 715 patients each paying $50 per month, Wood River Dental generated a total monthly recurring revenue of $35,750.
    
• Annual Recurring Revenue (ARR): On an annual basis, this amounted to a staggering $429,000 in recurring revenue.

Impact on Wood River Dental

The implementation of the membership plan had a transformative effect on Wood River Dental:

    
• Revenue Stabilization: The steady monthly income from membership fees provided a reliable cash flow, significantly mitigating the revenue volatility caused by PPO contracts.
    
• Patient Loyalty and Retention: Membership patients demonstrated higher loyalty and were more likely to adhere to regular check-ups and treatments, leading to better oral health outcomes and a more predictable patient schedule.
    
• Operational Efficiency: Using BoomCloud’s integrated platform streamlined administrative tasks, allowing the practice to focus more on patient care and less on managing billing and renewals.

Reflection: How Could This Impact Your Practice?

If your practice is struggling with the financial constraints imposed by PPOs, consider the following questions:

    
• Revenue Potential: How much additional revenue could your practice generate by implementing a membership plan similar to Wood River Dental’s?
    
• Patient Engagement: Would a membership plan help improve patient retention and loyalty in your practice?
    
• Operational Efficiency: How could a platform like BoomCloud simplify the management of your membership program, freeing up more time for patient care?

By exploring these questions, you can begin to envision the potential benefits of transitioning to a membership-based model. Wood River Dental’s success demonstrates that with the right strategies and tools, practices can overcome the financial challenges of PPOs and create a more sustainable and patient-centric business model.

Conclusion

Phasing out of dental PPOs is a challenging but necessary step for many dental practices aiming to regain financial control and improve patient care. By implementing dental membership plans, leveraging platforms like BoomCloud, and utilizing effective communication tools such as Weave, practices can successfully navigate this transition. These strategies not only mitigate the revenue loss associated with PPOs but also foster stronger patient relationships and promote better oral health outcomes.

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