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What is a Dental Membership Plan?

Over the years, this term has evolved to include everything from a discount plan, to a savings plan, as well as a membership plan. All were lumped together under the umbrella “dental membership plan.” Today, a dental membership plan does 2 things: creates cash flow and saves patients money. If it is not doing those things, then it’s lacking in terms of benefit or business impact.

Learn more about Dental Membership Plans here.

Is a membership plan synonymous with a discount plan?

No, they are very different. With a commercial discount plan, the patient pays a third party a one-time fee for access to a reduced fee schedule. An in-house discount plan typically works the same as the commercial plan, but the provider collects the one-time fee and offers discounts. All services for the patient are a la carte, but they get them at a reduced fee.

Are there different parts to a typical membership plan?

Yes, most of the time. There is the diagnostic/preventive “routine care” that is included in the set monthly/yearly member fee. The second part is the restorative discount that all members receive if they need treatment above and beyond preventive care. It is the “perk” for being a member.

How do membership plans differ from insurance plans?

With insurance, a third party collects premiums, determines eligibility, approves/denies treatment, and assumes the risk for things above the premium up to a certain “maximum.”

With a membership plan, the relationship is strictly between the patient and provider and is only valid at that location. The provider collects the membership fees directly and in exchange, provides routine preventive care. Each provider determines the services that are included for the set membership fee and what the restorative discount or offering will be.

What are the legal requirements for a membership plan to be compliant?

This depends on your state. States have different guidelines and regulations that should be considered when offering a membership plan. Typically, the terms of the plan have to be clearly defined and explained to the patient (i.e. what is the cost, what is included, how does the plan renew, how do you cancel, etc.) and it must be made known that it is not dental insurance. As always, talk with your attorney before deciding whether or not it is right for your practice.

What is the impact of the membership fee itself?

It creates predictable recurring revenue to your business that is independent of any third-party. Depending on your size, motivation to market your plan, existing uninsured patient base, etc. it could create a few thousand dollars a month to millions of dollars a year in predictable cash flow.

What are the Business Benefits of a Dental Membership Plan?

How does one evaluate the impact of these discounted fees on a practice?

If you increase your profit margin on your membership patients compared to other patients in your practice, then it’s actually an increase in fees, not a reduction. When looking at fee-for-service practices, look at net new revenue generated from the membership plan. For example, the patients who were uninsured and only coming in once every two years and paying full fees, are now paying for two cleanings every twelve months. That’s an increase in net revenue.

If you’re curious how your patients compare, do an audit of your current uninsured patient base. See how many of them are getting two cleanings in 12 months, year over year. Also, it’s difficult to quantify but another thing to consider is overall treatment acceptance. Are your membership patients accepting treatment because it’s discounted? Would they have actually moved forward with treatment if it was not or was the discount the final push?

The Value of Dental Membership Patients

Do membership plans ever have an annual maximum for utilization?

Ever is a big word! We wouldn’t recommend it. Do you want to cap your treatment acceptance? When all things are the same, dollar for dollar, the overhead/cost to manage membership patients vs. insured patients is significantly less.

What are strategies to implementing a plan in a practice?

The best strategy is to get your whole team on board. Make sure everyone is aware of the plan and believes in the value.  Create an MVP: a plan that is Manageable for the team, Valuable for the patient, and Profitable for the practice. When your team is confident in the process, the plan is valuable for the patient, and profitable for the business, it’s a no-brainer.

5 Ways to Effectively Grow a Profitable Dental Membership Program

How do you establish an appropriate level of fee discounts.

First, know where your fees align with the UCR rate in your area. Remember, membership pricing is all based on standard fees, or retail rates, not reimbursed rates. If your standard fees are not in a good spot, you want to make sure you fix that before you launch the plan. Make sure your patients are always saving money on preventive care when joining your plan. Also, be prepared to keep the price the same for at least a couple years, otherwise it feels like a bait and switch to the patient when they join and suddenly you increase the price. Most practices rarely increase the price of the membership plan.

Webinar: Pricing Profitable Plans

How would a typical first year roll out in a practice?

It takes a week or two to decide on the plan details, get your materials, train the team, get everyone on the same page. This timeline really depends on you and your team’s availability.

Next you will set a goal. It’s good to know about how many uninsured patients come in throughout a week or month, and make sure you’re talking to everyone about it. If you aren’t sure, we can help define a goal for you. Know your opportunities – know when uninsured patients are coming in, send them info ahead of time and let them enroll themselves prior to the appt. Your team is your number one tool to grow your plan. Incentivize your team to help grow the plan – buy lunch, gift cards, etc. for the person who signs up the most patients. After 12 months, run the numbers and make adjustments if necessary.

This is where your Plan Forward Client Success Manager comes in. They are here to help you strategize and come up with a game plan to help you grow your plan.

8 Important Considerations for Anticipating You Membership Plan Growth

What is necessary to manage a plan in an ongoing basis?

To be sustainable, the plan must be an MVP (manageable, valuable, profitable). Using a software and auto renewing plans is the only way to do this effectively. Think about it as a subscription. When you join a subscription, it requires a card on file and it auto-renews unless you stop it. That is what a membership plan should be. Using a management software is the best way to ensure your plan is a well oiled machine and is sustainable regardless of who is managing it within the practice.

What would passive, reliable, recurring revenue do for your business?