One of the most powerful phrases in the English language must be “It’s free!” When our cell phone plan comes with a streaming service, our car lease includes maintenance, or our meat subscription sweetens the deal with complimentary eggs, we get that awesome “it was free” feeling. In reality, we pay for each and every “bonus,” but the emotional high we experience with a bundle purchase and getting things for “free” changes the way we consume services. We rationalize a bundle purchase far differently than purchasing items a la carte, even when they are discounted.
In the case of dental membership plans, this real consumer behavior – to more highly value things perceived as being “free” – is incredibly powerful. The “it’s included” phenomenon is what turns plan members into practice loyalists who accept more treatment than patients with insurance or discount plans and reap the benefits of consistent visits to the dentist. Membership plans like those created with Plan Forward put the power in the hands of the practice to select which services are bundled so that patients want to take advantage of everything included.
The Three Pricing Models
Let’s talk about the elephant in the room: insurance. Despite being extensively adopted – two in four Americans have dental insurance – it’s a bane for both patients and practices. The complexity of navigating insurance coverage tends to leave people never quite feeling confident about what is included – even though the answer might be “a lot.” Insurance is a world of exceptions; despite paying a monthly fee, certain insured services may only be covered under specific circumstances, at certain locations, or at ill-defined intervals. The nature of insurance billing is opaque by design, meaning that patients are often unsure of whether they’ll get a bill after accepting services. Compare this to the transparency of a membership plan, which is created and managed by a practice and includes (for “free”) a specific set of services in exchange for a monthly fee. No surprises.
Historically, dental discount plans have been presented as an alternative for uninsured patients. While offering more transparency because patients are selecting services a la carte, the lack of the “it’s included” feeling means that patients traditionally accept less treatment and visit less frequently when compared to insured or membership plan patients. Patients on a discount plan still experience the anxiety of not knowing exactly what their visit to the dentist will cost, even if the services are discounted. So, while dental discount plans offer advantages over insurance by removing restrictions, maximums, waiting periods, annual limits, and denied claims, the model doesn’t encourage consistent and thorough treatment. As for practices, a dental discount plan means giving away free services and taking a hit to profitability, without the compelling potential of developing a long-term patient relationship.
That brings us to dental membership plans, the emerging favorite among patient-focused, growth-oriented dental practices. The transparency of what services are included in a dental membership plan is a huge advantage. First, patients know what package of services they have purchased and they are motivated to use their benefits – they want to make the most of their bundle. They’ve paid for them, including those x-rays! On top of this, despite the care being more affordable for patients, removing the insurance middleman allows providers to still be fairly and predictably compensated. A subscription to your practice also has the benefit of enabling a direct relationship between the practice and their patient, and consistency in the care provided. This, in turn, nurtures loyalty and a higher likelihood of accepting treatment that falls outside of the bundled membership services, when needed.
Setting a Plan Up for Success
As with any growth tactic, the execution of a membership plan will determine its success. “I would say every office needs to start a plan,” says Dr. Burneson, the Oregon dentist who today has grown his membership plan to more than 450 patients in just over 2 years. In 2021, however, he wasn’t seeing the results that he knew were possible.
He tried again with a new vendor by his side – Plan Forward – and relaunched his plan. “We began developing a plan that would add both ease of use and better profitability to the office,” said Dr. Burneson of turning his existing plan around so it will make money for years to come. “You have to work with people that understand this business. It’s a pretty good-sized learning curve, especially whenever it comes to technology, but I have a contact right there. She was there the entire time, making it easy for us.”
So, where does the difference lie between membership plans that succeed and those that fall short? We reviewed five practices from one of the leaders in dental membership plans, Plan Forward, to understand the actual business value of membership.
1. Successful Plans Generate Recurring Revenue – Strategically
As expected, compared with uninsured patients, members visit the dental practice more often. Depending on the practice’s starting point, visits for treatment increased by more than visits for hygiene, especially in the first year after a patient becomes a member. Members also visit more frequently for periodontal cleanings and maintenance than uninsured patients. Says Dr. James Burneson, the advocate for membership plans with a practice in Oregon, “The value of membership patients is really great because these are the patients that actually have an innate reason to return to keep their health at a higher level.”
2. Successful Plans Utilize Patient Insights
Aside from predictable recurring income, membership plans can also provide practices with valuable insights about their patients which they can use to optimize how they package and market their plans. For practices with multiple locations, custom membership plans can be tweaked for a unique set of services and a fee schedule for each practice, group, or region that makes the most sense.
3. Successful Plans Collect Upfront
Practices collect the membership fees upfront or monthly over the course of the annual contract, depending on the practice’s preferences. And with Plan Forward, the practice collects gross next-day deposits. With an average of 250 members and a $400 Annual Hygiene Plan, that’s $100,000 collected upfront. What would you do with all that extra cash?
4. Successful Plans Connect with Insured Patients, Too
The intention behind a membership plan is to not only attract uninsured patients, but show your current insured patient base that there’s a better alternative. So it’s really important to factor in what insurance typically covers and what it costs your patients so your in-house membership plan is an attractive alternative. Aside from cost alone, you can also show patients that insurance is not always looking out for their best interest. Their healthcare decisions should be a personal conversation between you and them.
By bundling up necessary dental services in a model that challenges the limitations of insurance, membership plans have the power to help dental practices change course in their success. “Plan Forward creates relationship-based patients instead of transaction-based patients, and that’s killer,” says Dr. Burneson. It’s time that the power of “it’s included” is used to help consumers live better lives. With dental membership plans from Plan Forward, more patients can affordably access quality dental care regardless of their insurance status, and more practices can take control of their profitability and production. That’s a bundle of benefits we can all get behind.
