8 Important Considerations For Anticipating Your Membership Plan Growth

By Try PlanForward February 1, 2021 5 min read

Easily one of the questions we get asked the most is, “What is the average growth rate for new membership plans?”

We know you want to run quick math in your head. You want to figure out how much revenue you could possibly make if you start a plan.  However, that’s a loaded question. And one that is difficult to answer directly. Especially when a brand new patient calls and asks, “How much does it cost to get my teeth cleaned?”  

Let me explain what I mean…

When patients ask that question, your mind starts swirling and you think, where should I start? I know what it’s like, I was there!

  • Do you have any current x-rays?  Well, what’s current?  Are they good x-rays?
  • How long has it been since you’ve been to the dentist?  
  • Have you ever been diagnosed with periodontal disease?  
  • And our favorite question, do you have insurance?  
  • Are we in or out-of-network?  Ok, let me track down your insurance information, figure it out, and get back with you.  

Only after all of that, can I give you a better estimate of the cost.  By this point, we’ve overwhelmed the patient and they’re gone.  That’s probably a little dramatic. But it really is difficult to tell someone quickly and directly how much something costs when you have no information on them.
This is very similar to how drastically different membership plan growth rates can be.  The direct indirect answer is…it depends.  It depends on a number of factors.  Let’s dive in.
The biggest indicators that predict how quickly a membership plan will grow right out of the gate are:

  1. What percentage of your active patient base is currently uninsured?
  2. How many PPO’s do you participate in?
  3. On average, how many patients do you see in one week?
  4. How many dentists do you have?
  5. When was your practice established?
  6. What is your patient age demographic?
  7. How strong is your administrative team?
  8. How is your plan structured and priced?

All of these things impact membership plan participation. They are also good indicators of how you might expect your plant to grow.

What percentage of your active patient base is currently uninsured?

Practices that have a higher percentage of active, uninsured patients, naturally have a bigger pool of potential membership patients. That’s not to say that practices with a lower percentage won’t eventually grow quickly, but it might start off slower.  As time goes by and your plan grows, marketing will begin to push new uninsured patients through the door. If you are lucky and do it right, word of mouth referrals can grow your business as well. Practices that tend to grow faster usually have a 40-50% uninsured patient base.

How many PPO’s do you participate in?

This sort of relates to the point above.  Heavy PPO practices tend to have fewer uninsured patients because they source most of their patients from network participation.  They are listed on many insurance companies’ websites as in-network, so the large majority of patients tend to be insured.  They simply don’t have as many opportunities to offer the membership plan so the plans grow slower.  However, there is a caveat.  There are many practices who are heavy PPO but also have patients who are part of the gig economy.  Think restaurant staff and ride share drivers. If you fall into this category, you could expect your plan to grow very fast.

On average, how many patients do you see in one week?

Volume will make an impact. If you’re open three days a week, you can’t see the same amount of patients as someone who’s open seven days a week.  These are very different practices, with different models and probably different business goals.  The first office does less in production but is probably very profitable.  The second type of practice probably has high production but the profit margin isn’t quite as high.  One model is not better than the other. But a membership plan will grow faster with a higher number of patients per week.  

How many dentists do you have?

It was surprising to me how much the number of dentists predicts how quickly a membership plan will grow.  According to our data, practices with two or more dentists grow, three times faster than practices with only one dentists.  It doesn’t matter if there are two or ten dentists, those practices see more patients and are open more hours.

When was your practice established?

Practices open for more than 15 years usually grow membership plans at faster rates than a new practice.  It doesn’t matter if the practicing dentists started the practice. Even if they acquired a practice that was started decades ago. There is usually a wider age range of patients, strong loyalty and lots of word-of-mouth referrals and fewer PPO’s.

What is your patient age demographic?

The number one patient demographic that membership plans benefit is the retiree population.  No matter where you’re located in the country, retirees don’t have a great option for dental benefits.  The plans that are offered are mediocre at best. They still leave the patients with out-of-pocket expenses and sub-par preventive coverage.  Practices with a lot of 55-65 year old’s, have a large number of patients that need a membership plan offering.  The plans are easy, transparent, convenient, and comprehensive.  When they are available the moment they lose insurance, it’s a no-brainer.  Who else are benefitting from membership plans? The gig-economy and 26 year old’s aging off their parent’s insurance. And folks who go through life events like job changes or divorce.  

How strong is your administrative team?

The secret sauce to a vibrant membership plan is the working men/women behind the desk. A strong administrative team running the front end of the practice will make even the most complicated plan grow.  When trying to figure out how well your plan will grow, consider these questions: How comfortable are they talking numbers and finances with patients? How well do they understand insurance and what’s being offered in the market?  Are they bought into your plan being the best option for your patients? Can they easily manage the plan?  Are they confident when giving patients the plan details?  If the answer is no to any of these, your plan could hit a bottleneck even if it’s a perfectly structured plan.

How is your plan structured and priced?

Speaking of plan structure, this can be the biggest factor in whether or not your patients say yes or run for the hills.  Do your patients always save money by joining your plan? If not, or if you’re not quite sure how much they are saving or how it is calculated, then it may create hesitation on their end.  Do you offer a monthly payment option?  I don’t know about you, but I would much rather pay $120 per month for my family of four than $1,440 once per year.  Offering a monthly option not only helps you grow monthly recurring revenue, but it also helps families or people on a limited or fixed income more easily accept your plan.  Do you have lots of exclusions, fine print, or different plan packages that make their brains work on overdrive?  Keeping the plan as simple as possible, with clearly stated terms is the best way to help your patients say, That’s it? Sign me up! 

Related Articles

Subscribe to our newsletter.

Learn how Plan Forward can help you leverage a membership plan Reach out to our team of dental experts