Training & Support for Dental Business Excellence



Dental Memberships: How Did We Get Here and Should My Practice Have One?

What you’ll learn…

  • What is a dental membership
  • Why should my practice consider offering dental membership to patients
  • How do I create a dental membership program for my practice

In recent years, dental membership plans have been a buzz word and a very desirable option for dental offices across the country. This phenomenon has left a lasting mark in the industry for a variety of reasons. The two main industries largely responsible for membership formation are insurance carriers and dental service organizations. Let’s first review the impact that these two business types have had on the formation of dental memberships.

Dental “insurance” is a multi-billion dollar industry that has become ever savvy in its profitability. Dental carriers tout lower reimbursements for patient affordability, which in turn lowers reimbursement from said company. This coupled with a very limited dental benefit for services each year, makes for a beautiful and astronomical revenue stream for any dental insurance carrier.

Dental insurance carriers, especially those that have a large share of each dental market, are in a position of power and are setting dental reimbursement at record low levels. Most are not even allowing for negotiation of fee reimbursement any longer.  While lower cost dental care sounds fantastic for members of these plans, it often creates a hefty expense for dental professionals across the country. This is especially true for the solo practitioner that struggles to compete in their market and support the cost of doing business. To make matters more difficult, the days of a dental insurance carrier providing an equal exchange of patient referrals to your location for participation in their plans is long gone. In Fact some insurance carriers have started to diversify and open dental practices through other lines of business. This leaves many business owners wondering what the benefits of participating with their now direct competition is?

Most patients are searching for their next office through various online search methods and social media recommendations. Online advertising channels and other mailers often appeal to the dental shopper that either does not have dental benefits, or wants to enjoy the coupon for free whitening or a reduced cost crown. All of these offers are great ways to market to new patients and dental shoppers. The business model that holds this particular expertise is the DSO.

DSO or Dental Service Organizations are large groups of offices either fully or partially owned by private equity firms, dentists, and/or business organizations looking to benefit from the cash cow that is the dental industry. DSOs typically have large marketing budgets and an uncanny ability to create campaigns that attract new patients and dental shoppers. In addition to the large marketing budgets, DSOs have the ability to leverage economies of scale to negotiate insurance reimbursement and supply costs on a level with which the single practitioner can simply not compete. The DSO model was one of the first dental practice types to create in-house dental plans or dental memberships.

This brings us to the birth of such memberships, the former discount plans, and how or why your practice should consider using this model.

Discount dental plans or programs have been under fire in a number of states either via customer complaint or due to regulations with each state’s insurance commissioner. Every state has different rules governing dental plans or discount plans and whether an office can market something as a plan, if they are not an insurance carrier or have a broker directly at the office.

Lengthy insurance participation compliance contracts coupled with many state rules governing dental plans can leave one’s head spinning about what to do with uninsured patients and creating long term value. The birth of the dental membership is a fabulous and more compliant option for most parties. The reason is that memberships do not have the word “plan” in them. Patients pay a set amount per month or year to become a member of a practice, and receive services at a reduced price for their membership. It is always good practice to check with your dental board and insurance commissioner regarding any practice of discount plans or membership to ensure you are in compliance with your state business laws and insurance practices.

More than 50% of Americans do not have a traditional dental plan and are confused about waiting periods, maximums and how their dental benefits compare to a traditional medical plan. Memberships are a clear option. This alternative  allows an office to stay compliant with their current insurance contracts by setting membership fees and prices for services above their insurance contracted fees. This also creates loyalty from the patient who has to visit your practice for their membership benefits, thus preventing competitive shopping for services. Additionally, membership fees are like passive income, you can charge a set amount for providing services in the future and pre-collect on those services which provides a stream of regular recurring revenue. You can even market your membership plans to other small businesses that do not have plans for their employees. This will help offset the cost of their dental care and create a strong community partnership while increasing your active patient base.

There are a number of dental membership companies out there that provide software and even payment services direct to your members. This saves you time from reinventing the wheel and allows for use of legal forms and brochure templates to launch a membership easily and effectively.

I personally have researched a number of membership software providers and created membership plans and brochures for offices to use. Here are a few tips on how to get started if you are thinking about creating a membership plan for your practice:

  1. Start by doing research on dental pricing. Check places like ehealthinsurance to get quotes on what an individual or family premium would cost for dental benefits. This will give you a good idea of what each family will pay per year just for the benefits, and will help you structure your monthly membership fee to compete.
  2. Check your highest insurance contracted fees and set your own membership fees in compliance with the insurance plan, not providing a greater discount to your membership participants.
  3. Run an uninsured patient report in your dental software to understand your unique insurance climate and how you can bring more value to your patients in the future.
  4. Send out a survey on the office social media page or by email. Ask patients to indicate if they would be interested in your membership plans or having discounted services that would allow for elimination of their insurance plan. Get an idea of what your patients want.

Keep in mind that once your program is implemented, it will take time to grow. You will want to continue with your usual form of advertising if not increase or change your efforts to include your new office membership. Remember not to run out and cancel all insurance contracts. The goal is to serve as many patients as possible, while building and improving your practice. Continue providing comprehensive care and building a program that will eventually reduce insurance dependency and slowly change your plan participation and reimbursement for all services.

Are you are eager to learn more and get started on implementing a new membership program in your office? I have attached Steps for Creating a Dental Membership to share with your team and colleagues. If you have additional questions, Praxes Dental will soon be launching a course, Creating a Dental Membership A-Z.  In the meantime, send an email or reach out by phone with questions.