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The Future of Dentistry
Be Careful Out There…
It's Starting To Get UGLY!
By Jim & Suzanne Du Molin
Financial & Management Planners For America's Dentist
There are several disturbing trends that are beginning to gather momentum in the dental arena. For years, we have talked about the coming of managed care and how to position your practice to deal with this threat to traditional indemnity and fee-for-service dentistry. Reality is managed care is here today and it’s mutating rapidly into some pretty ugly forms.
The Traditional Managed Care Rationale
Traditionally, doctors have accepted managed care programs only when they have unused operatory time and their fixed expenses are already being covered by fee-for-service dentistry. They have enrolled in programs with a PPO fee schedule or a capitation/co-payment schedule that have paid them more than the variable costs associated with treatment delivery (about 22%).
The difference between the variable costs and the reimbursement (Example: 50% reimbursement minus 22% variable cost = 27%) goes to the bottom line as additional profit. This is additional profit that would not have been realized if the chair time had gone unused. Further, the additional managed care patient flow generates more referral opportunities for the practice.The Problems
The problems for the dentist occur in three areas. First is when the doctor signs up for a bad managed care program, i.e., one with a compensation schedule that doesn’t adequately compensate him for the types of procedures he or she normally diagnoses and performs on patients. If you are diagnosing four quads of root planing and your cap program doesn’t cover it, you have a serious problem unless your hygienist normally has nothing else to do with her time.
The second problem occurs when the doctor or staff are unable to promote and gain patient acceptance for upgraded or optional treatments that would be clinically superior, or better meet the patient’s cosmetic needs, than the basic covered benefits.
The third problem occurs when the staff are unable to cope with the paperwork associated with managed care programs.The Solutions
Number One, don’t sign up for a program that, when taken in its totality, will not compensate you adequately for treating the patients in the style of dentistry you feel obligated to provide. To solve this problem, Suzanne and I, along with several top consultants, are developing a computer program that will automatically analyze the fee structure of the proposed managed care program and determine the potential profitability of the program in your practice based on your individual style of diagnosing and treating patients.
Hopefully, this program will be ready for testing by the end of the second quarter of 98. We will keep you informed.
Number two, maximizing case acceptance for superior treatment is critical for both the patient’s care and your profitability. Without a doubt, the number one resource for case presentation training, regardless of the managed care issue, is Walter Hailey’s Dental Boot Kamp. Call 1-800-888-5102. Mention my name and ask for a discount. The worst they can do is laugh and say "Jim who?"
Number three, how to train your staff in the systems for dealing with these programs is best left to the experts in this area. One is a specialist in systems for the blended managed care / fee-for-service practice. The other is the nation’s top consultant representing dentists in contract negotiations with insurance companies. Call us. We’ll review your situation and determine the best course of action.Our Goal Is To Avoid Managed Care by Keeping Your Chairs Filled!
It has taken us three years to develop the resources and expertise to deal with the managed care wave that is sweeping the country. Let’s be clear, Suzanne and I are not pro managed care! We are pro profit. Our goal is to avoid managed care by keeping your operatory chairs filled with full fee-for-service patients. If the demographics of your market can’t support that, we will deal with managed care in a rational and business-like manner or suggest you move to a market that will better support your style of dentistry.
The "Hang Tough Strategy"
Many doctors have expressed the attitude that "If we all hang tough, and no one signs up for any of these managed care programs, we can beat the insurance companies". This strategy has worked effectively in some areas… until recently.
Basically, the insurance companies have said, "OK doctors, if you don’t want to play our game, by our rules, we will just bypass you entirely by setting up our own facilities, staffing it with our own doctors, and service our own patients directly." This is called the "Staff Model". We have seen this approach start to move into high gear in the western states in the last 18 months.
You might say, "Who would go to such a practice? Not my patients." The reality is that the insurance companies have been training patients to go where they tell them to for the last ten years. If Mr. Average American will pick a coronary bypass surgeon off a list of approved HMO physicians, he won’t hesitate to select a dentist from a list of in-house doctors when he wants his teeth cleaned.Your Next Door Neighbor May Have Already Sold Out!
