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Dentist2Dentist
Join Dr. Mike Miyasaki as he talks dentist to dentist about the trends, products, and clinical applications in dentistry today.
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Transforming Dental Practice Profitability: Reducing Insurance Dependency with Garrett Caldwell and Stephanie Burrow
What if you could redefine your dental practice's profitability by reducing insurance dependency? Join us as we explore this revolutionary concept with Garrett Caldwell, CEO of CORD Dental Laboratory and the Pacific Aesthetic Continuum, and Stephanie Burrow, CFO of both entities. We'll kick off by tracing the evolution of dental insurance and underscoring why it's crucial to run dental practices like businesses. Discover 10 critical steps for decreasing reliance on insurance, starting with enhancing clinical skills and effectively communicating their value to your patients.
Next, we dive into the financial strategy of dropping insurance contracts and redirecting those funds toward marketing to attract new patients. Imagine replacing a $20,000 insurance write-off with a $5,000 marketing spend that yields a significant return on investment. Proper preparation is key, and we'll outline a six-month plan for patient communication to ensure a seamless transition. Clear, confident explanations to patients about these changes are essential for maintaining quality care and trust, and practicing scripts with your team will help manage expectations effectively.
Finally, we'll cover the vital steps for moving to a model where patients pay upfront, from determining a robust financial policy to offering multiple payment options. Learn about the importance of effective case presentations, scheduling, and monitoring key metrics to ensure your practice thrives with fewer patient visits. By securing true UCR fees, you can achieve similar or even greater profitability with reduced stress and operational costs. With real-world examples and strategies, this episode is packed with actionable insights to help your dental practice successfully navigate the transition away from insurance dependency.
Welcome everybody today to another podcast from the PAC. I'm excited We've got two guests and myself. So we have Garrett Caldwell, again CEO of CORD Dental Laboratory up in Roseville, california, right by me in Sacramento, and also CEO of the Pacific Aesthetic Continuum, the provider of continued education really focused on comprehensive dentistry, but restored with aesthetic restorations, and so that's what ties the pack in with the core. Then we have Stephanie Burrow, who's also here and we've introduced Stephanie before and she's kind of the CFO of all of Garrett's enterprises, at Core Dental Laboratory and with the PAC, so she knows the numbers. I just fix teeth, and Garrett kind of tells us all what to do. So those are the guests that we have today.
Speaker 1:What we're really excited about today, though, is this is kind of part three of a longer presentation or podcast that we've kind of divided up into three parts, so part one and two. One was kind of a recap of what dental insurance has been like during my career over 37 years, and then last time we had a little bit more discussion of how we're handling the business side, and that's one of the big things that Garrett and Stephanie have been talking to us about is that we have to manage our dental practices like a dental business, especially in today's environment. And then what I want to do during this part three is really go through 10 steps that I think you should consider if you are considering taking your practice that may be insurance dependent and you want to decrease that dependence on insurance. So I've kind of got the 10 steps that I would consider. Everybody's situation is a little bit different, so take these as advisory. If you would like during a later time to talk to Garrett and Stephanie about maybe looking at practice, looking at the feasibility of being able to drop some insurance contracts, for all the insurance contracts, they'd be happy to do that. As we mentioned in previous podcasts, this is podcast number 13. So you can go back and listen to the previous ones. They've done this for other doctors and especially if you're a member of either the PAC or if you're using Core Dental Lab, they'd be glad to do that for you. So I'm just going to jump right in the 10 steps that I would recommend that you consider if you're going to consider dropping your practice's dependence on insurance.
Speaker 1:Number one is going back to what we've talked about during many of our podcasts is continually build the value, your value, your clinical skills so that the services you provide to your patients are looked at as higher value. What I mean by that is, sometimes I talk to doctors and they'll come up and they'll say you know what, we want to drop insurance. And I'll say, okay, well, tell me about your practice. And they'll tell me well, all I do is fillings and crowns. I don't do anything else besides that kind of bread and butter dentistry. And I tell them well, you're going to have a hard time dropping insurance. They'll go. Why is that? Well, because one, you're doing the bread and butter stuff, one you know the profit bill in those have really been squeezed out by the insurance companies. But everybody does fillings and crowns, and one of the first things you learn to do in dental school is fillings and crowns.
Speaker 1:And so now, if you're going to drop insurance, and let's say again, we've taken the round figures when we do these conversations let's say your crown's a thousand dollars and you take an insurance company that has taken that thousand down to 700 because of the contractual fee. And now what you and so your patients are used to paying you $700. And if they go to the dentist, no-transcript. But you're going to drop the contract. And so, let's say, your UCR you're going to take from $1,000 to $1,100. Well, if the patient looks at the services you provide and you provide the same services as the office next door but you're $1,100 and they're $700, then a lot of the patients that you have that are your friends that you would think would never leave. You are going to go to the $700 office, right?
Speaker 1:But if you provide crowns, but when you do your crowns you provide the crowns that are highly aesthetic. You use a lab like core, and then you take that crown and with that crown you're going to be improving your patient's occlusion because you know how to look at occlusion. So now you've taken that crown and you've added value to that crown, so you're going to get a more aesthetic crown. You're going to get a better fitting crown. You're going to have a better bite when you're done or whatever it all is encompassing and you've communicated that to the patients so they value what you're going to provide them. Well, now you've taken that $1,100 crown and really the patient feels like they're getting a $1,500 crown for $1,100. So what you need to do is you need to build your skills and you have to communicate those skills with your patients so they understand that it's of value for them to stay with you in your practice. So that's step number one.
Speaker 1:Step number two now, now that you've got the skills and your patients feel like you're worth, perhaps a premium is really to go back to what Garrett and Stephanie have talked about to us before is collect and analyze your practice data to figure out what the impact if you're going to part with an insurance company what is the potential financial impact that could have on your practice? Dr Griffin, during our podcast, said you know, maybe go back and see if you get credentialing or maybe see if you can negotiate your fees with the insurance companies before you drop the insurance company. So you want to figure out what the financial impact may or may not be and then go back and figure out okay, is there a way that maybe you could stay with that insurance but maybe get a higher fee from that insurance company or the insurance companies that you're looking for and we talked about this during the previous two parts of this is that you have to look at the risk and reward. For some, the risk is very low and I mentioned it before, as I go and lecture around the country and I talk to doctors and for us in California to drop one of the big, well-known insurance companies, it's a big know for us to uh in california to drop one of the big, well-known insurance companies. It's a big risk for us. But when I use that same name throughout the country the doctors just kind of go well, that's no big thing and I'll go. Why is that? And they go well that they only make up five percent of our practice, whereas in california I was saying before it made up over 65 of my practice.
Speaker 1:So you have to look at some of you are very insurance dependent. Some of you are not insurance dependent and if you're just a little bit insurance dependent, maybe making the change doesn't have a great value or reward. So we all have to figure that out. And then once we do that analysis, then we figure out should you and can you? So if all you're doing is crowns and fillings and to drop insurance could endanger the financial health of your practice, then it's something to you know.
Speaker 1:To I wouldn't say don't plan on dropping an insurance, but I would think about going back to step one, increase your skills and then do the analysis again and if you feel like the patients will really value what really value the services you provide. Then make the change. Number three, I think, is a big thing because now you've acquired the skills, you've looked at your practice, you decided, hopefully, that making this change is gonna be a good thing. And what I would encourage you to do is talk to your team about this change and how you're planning to make the change and the why and the how. You know sometimes I remember I went back to the team because if your team says we can't drop insurance, because if we drop insurance we're going to be charging the patients too much or we're not going to survive, you got to change that thinking right, because if they don't believe you can drop insurance, then they're going to make this whole transition really difficult. They have to be convinced that, one, you can make this change and, two, that's going to be better for your patients.
Speaker 1:So one of the things that we discuss and many of us discuss this already with our team is you know what we're getting squeezed? All the cost of doing business, the cost of all of you living out there and we mentioned before buying McDonald's meals is getting tougher and tougher, and what I need to do is, I need to make changes in my practice so we can survive. And so, in order to make these changes, this is what the steps are A, b and C. The benefits to the patients are they're gonna get better care because we're gonna be the ones delivering their care. We're gonna not have to schedule 20 patients a day. We can get away with scheduling maybe half of that, so we're going to be able to spend more time. If I spend more time with that patient, we're going to have better relationships with that patient and we can provide better care. I mean, unless you're spending you know, uber extra time doing every restoration. We know that if you have to rush through it, that's not always a good thing. So, hey, we can spend the time we need, we can appoint that proper time and if the team, hopefully, is on board and you've addressed all the issues that they have and the benefits for the patients, then what you do is everybody has to commit to a date. You know, if it's August 1st of 2024, that in eight months we're going to be insurance independent. You have to set a date and kind of work backwards from there. And why set a date out six to eight months? Well, I'll talk about that.
Speaker 1:The number four is, if you don't have it, what I would do before you start talking to patients about all this, is set up a membership plan. A membership plan is basically where your patients prepay, so you know they might pay again the dollar amounts could all differ, but they might pay $900. And for $900, they get three cleanings and they get 10% off any restorative work they have to have during that year. And what that does? It creates a way to retain those patients because if they prepaid things, one, they're most likely not going to leave you and then, two, by prepaying, their costs actually go down. And so if they envision your fees going up a little bit, but then they can save because they get 10% off all the restorative. So now that $1,400 crown, they get $140 off of that procedure. They look at that as a savings. And again, the chance of you ending an insurance contract and the fee getting bumped up to the patients it's there, and so if they have a way to kind of mitigate that at an expense, it doesn't seem as a shocker.
Speaker 1:Number five is and I mentioned this before is your insurance plan? Is your marketer right? So in our area we get somebody calls up and says hey, I just got this job. The job has insurance through company ABC. I went to ABC's website and you're the one the doctor closest to me or I like your reviews, so I want to come in. When you're no longer with an insurance company, guess what? They don't market for you anymore. They take your name off of their list of doctors so you don't get those patients coming in.
Speaker 1:But I mentioned during the last podcast, part two of this is that, let's say, you're working with insurance company ABC and they're the biggest insurance company that you work with and at the end of the month you do your financials and because you work with ABC, you write down from UCR $20,000 of revenue. That's just the difference between the UCR and that contracted insurance fee. So you're writing off $20,000. So you go to a company and say, okay, I want to up my marketing because a lot of us have a website but we're not doing much as far as SEO maximization and maybe we're not posting a lot of social media, we're not running any kind of ads. I mean, there's different things that you can do. So if you bump up your marketing and say $5,000, which for a lot of practices would seem like a lot of money, but now you don't have to write off that $20,000. That's actually a good thing. So you know, if your insurance company is saying 20 new patients to your practice a month and then your marketing does the same, sends you $20,000, and it costs you $5,000 to get those $20,000, and you're not writing off $20,000, that's a win for you. So go back, look at your website, look at the social media that describes the services that you offer and figure out if there's marketing that you can do to make you sound a little bit more special than the insurance practice that's next door. And again, we're all colleagues. We just have to describe what we do. We're not better than the person, but we offer maybe more services, and so I think that's the ethical way to do this. So we've made it through steps one through five. I know we've gone through it fairly quickly. We can go back and answer more questions. We'll have a discussion with Garrett and Stephanie online.
Speaker 1:But now that you're prepared to do so, now we have to actually I mentioned before set the date and actually go through the preparation of doing this properly. It before set the date and actually go through the preparation of doing this properly. Because what happens is I've had colleagues and they'll tell me hey, what are you doing now? And I go. Well, you know, we dropped insurance. We've done it twice and last time we dropped it about five years ago. And they'll go. You know I want to do that. So they'll ask you know, how are you doing? Well, you know everything's going great. You know we love not being contracted with the insurance companies and the next time I meet them, they go. I did what you did. I go. What are you talking about? They go. I just went back after I talked to you and I dropped insurance. I go no, you're not supposed to do that. So you go through steps one, through five that I just talked about.
Speaker 1:But now the real work begins. And what's step six? Well, now, step six is we have to script out what we're going to tell our patients. So we did not send a letter to our patients saying, hey, we're going to drop all of our insurance contracts and this is what to expect. You know, nothing's changed Like the things that we talked about before. We did not send a letter out.
Speaker 1:What we did is we said we're going to talk to the patients for the next six months. Why six months? Because we figured that's one cycle of hygiene, right? We figured that's one cycle of hygiene, right? So every time they came in for the hygiene visit in the morning we'd go through our schedule and say, okay, we need to talk to patients A through Z. So we set that up in our morning huddle. We would have the conversation with the patients. You know we just want to let you know that we are no longer going to be contracted with your insurance company and we would put that note in their chart so we would know that next time they come in we don't have to have that discussion again. Because we have the discussions, because we know we don't want to bug them about it and we don't really want to make it seem like a big thing, but we wanted to inform them that probably next time they come in we're not going to have a contract.
Speaker 1:So the way it's going to work is whatever's appropriate for that patient's insurance With one of the big insurance companies that we work with. There's no longer the assignment of benefits, which means now we're going to have to collect up front and then the insurance company is going to send you the check for the reimbursement. It's no longer going to come to our office where we kind of adjust your account and then call you for the extra. So those are some of the changes that we had to go through. So we had to explain to the patients why we were making this change, that the current relationship with the insurance companies the reimbursement going down is making it harder, but we want to provide them with the very best quality of service we can with the best materials we can. So we find that again, we're not going to increase our UCR but we're going to just get our regular fee. So you just have to kind of go through that and if you sit there and you have a script prepared and you practice it with your team.
Speaker 1:I mentioned it before, but when we went through this it felt super uncomfortable. I mean, you know patients are so used to just paying you their insurance information and paying you very little for their services and now you're asking for everything up front. You know it's a big change and so what we did is we just kind of had our scripts. We went through the scripts because if you, if the patient, asks you a question like why are you guys making this change? And you start stammering well well, well, you know, and the patients feel like you're doing it for your benefit, whereas if you just come back and say you know this is what's going on and you get them on your side, then they kind of see you know your side and the reason why you're doing it. And a lot of our patients said you know, you're right, we understand what's going on, especially now because there's so many articles in newspapers on the news about how insurance companies are making billions of dollars and yet they're getting their benefits denied. You know they've got a tooth that needs a crown and you reauthorize it for them and it gets denied and you show them the picture of the big cracks and the big filling and everything that's going on, and so a lot of the patients are kind of picking up on that. So we need the patient on our side as we go and move on to step seven.
Speaker 1:So step seven is we talked about this before too is determine your financial policy, and Gary asked me this in part two about you know when the patient comes in and you ask them for a hundred percent of the fee and in the past they didn't pay anything Then you know two or three weeks later, after the EOB, the explanation of benefits came through and you determined that you did a thousand dollar procedure and you made you know, I don't know $900. And so the patient had to make up the hundreds. So you'd call them up and say, hey, we just want to call you up for that, that extra hundred. You know they, they would gladly give you the extra hundred. When you then now ask them for a thousand dollars up front, you know it's a little bit of a bigger thing and, as Garrett was asking, how do you handle that?
Speaker 1:So when we started that, we had five different options that we'd offer the patients. You know you can pay up front and maybe you offer them a discount if they pay up front. For some of our patients we were trying to encourage them to go to third party because we were trying not to finance them internally. So we'd recommend maybe a third party financing type of situation hey, it's $1,000, but hey, we can get you on this credit company and you can pay 12 months over 12 months interest free, that type of thing. In some cases, if there are longstanding patients and we really understood that this was going to be a big change for them we might say, okay, pay us half now, and then half a month later maybe we'd split up into three payments.
Speaker 1:But we had a lot of different scenarios where we could help patients with handling the financial well I'll call it a burden, but kind of the larger commitment that they now had up front. So we had all of our scenarios kind of figured out. So when the patient went up to the front and we said, okay, we need to collect up front now, we had different scenarios we could offer them to make it less of an issue. What you need to do too now is to, because they really have to understand the value that you bring to them. You have to have your case presentation skills, I think, down and scheduling, because now scheduling becomes a bigger part. You know again, you want to offer convenience. You don't want them to have to wait six months, you want to get them going right away.
Speaker 1:So we went through that period where we answer the patient's questions about well, we announced that we were going to drop insurance. We answered the patient's questions they had about why would you do that? How is it going to affect me? That's the biggest part is how is it going to affect me and that How's it going to affect me? That's the biggest part, is how's it going to affect me. And then we as a team figured out how we'd explain the financial policy to the patients. So we got through all that. Then we determined, okay, what insurance companies did we have to inform about our intentions to discontinue the contract.
Speaker 1:And we had to figure out the exact date, because a lot of them will say, from the time they receive the letter from you that you want to discontinue your contract, they'll give you maybe 45, 90 days or whatever. They'll send you a letter back saying, as of this date, you'll no longer be contracted. And then what do they do? They start sending letters to all their subscribers to let them know that, hey, the practice you've been going to is no longer going to be contracted. With our insurance you could save money if you go to another place, you know. And so they will do the best that they can to keep the business that they have from the patients that are seeing you, their subscribers. They'll do the best that they can to retain their customers, just like we're doing the best we can to retain our patients.
Speaker 1:You know, I look at it, I go. It's just a game. You know we all have to prepare for this. And that's why I say, if you don't prepare and you just all of a sudden tell your patients, hey, you know, I've dropped your insurance company, I'm no longer contracted with them, and you don't have all their buy-in and your team's not really well informed, it just has a tendency to kind of fall apart. And that's why I think these 10 steps are super uber critical. So now you've figured out okay, when do you have to inform whatever insurance company that you're gonna discontinue insurance with? Now you know how many days ahead you have to inform them and then you will drop the insurance contract on those days.
Speaker 1:Now I think step nine is really important. What you have to do is you are entering kind of a new type of business. Your business is really going to grow on the services and the quality of service and the service that you provide to your patients. Right, you're no longer building your practice based on price. We're not going to be the lowest price practice. We may not even be the most convenient now, because now you've got to pay up front. There's a lot of things that are going on, so you have to keep the practice going.
Speaker 1:So what I say is monitor your collections, monitor your new patients that are coming in, monitor how many patients are departing the best you can, and then scheduling and I mentioned this in a previous podcast is there's going to be a difference between activity and profitability. So if you're seeing 30 patients a day in the doctor's schedule and now all of a sudden that drops down to 10 patients a day, you know a third of what you were doing before. But we talked about the math. If you're able to get your true UCR, you will make as much, or perhaps more, seeing those 10 patients than you were seeing doing the 30. Your stress is going to be less. Your cost of variable goods, all the sundries that goes into setting that operatory up for a patient all those costs will drop down and I think you'll live longer. So maybe you have to work longer to save up more because you're going to live longer, but that could be a good thing.
Speaker 1:You do want to monitor your collections. It's not your production. I don't care if I produce a million dollars a month. If I only collect 100,000 of that, I'm still dead right. But if I produce 100,000 and I collect 100 or 105,000, then things are good, we can keep our practice going.
Speaker 1:The new patient numbers in most cases, I believe, will probably go down a little bit and that's why you have to make sure that the patients that come in have kind of an increased value and departing patients. You know, it's just interesting. You try to monitor that as close as you can. But again, some of the patients that really like you, they won't tell you they're not going to come back, they just won't come back. You know some won't even ask for their records, because you know how that goes. Sometimes a new patient comes in your office and they go, well, but don't contact my old office, right, because they don't want to offend their friendly dentist over there. So you do the best you can but it's not really for maybe a year or two down the road where you go. Yeah, we haven't seen, you know, mrs Smith for a long time and you know she used to come in every six months and we haven't seen Mrs Smith for two years. You know she's probably gone.
Speaker 1:What I told the team was is, when we make this change, there will be patients that will feel more comfortable or they have to, for financial reasons, stick with a dentist that takes their insurance and so we'll never hold that against them. I mean, I respect they have to do what's best for them. So I told the team I go whenever a patient says that they need to leave our practice. So if a patient calls up and says, hey, I need my record sent because you guys no longer take my insurance, hey, that's fine, we'll help make that transition as easy as possible. But if you ever decide you'd like to come back, you're always welcome here, like we're. You know we're not going to hold it against you. So I always made sure that my team knew that we understand why you may be leaving. We'll always welcome you back because we've always, you know, we've enjoyed taking care of you and we hope hope we see you again.
Speaker 1:And that's what you see is you will see patients come back, even two, three, now even five years later. And I think one of the reasons why is a lot of the patients I've seen this year that have come back. Many of them said I didn't know I could come back and see you and I go. What do you mean? You didn't think you'd come back and see us. Well, you know, when you discontinued your contract with my insurance company. I thought I had to go somewhere else because, remember, what the insurance companies are telling the patients is basically that right that you should think about going to another dentist because your dentist is no longer contracted with our company and you could save money. And you know, we've got another dentist down the street. So they, you know, again the lay person might think, oh, I can't go see Dr Mike anymore because I don't have insurance, right. So it's a game that you have to understand.
Speaker 1:And then number six is after about six months, like we didn't adjust our fees, we just went from having a contracted fees to now we are regular UCR, so that was kind of like our fee increase. Well, six months later, you don't have to wait for the insurance companies to say, hey, send us your new revised fees and we'll see if we accept them. Right Now what you can do is anytime you want you can raise your fees, you can adjust them, and I mentioned before we don't try to go sky high or anything like that. But as for the last three years, as inflation has been going up what like 6% to 9% we have gradually raised our fees just to kind of keep up, and I've watched our numbers just to make sure that basically our profit has stayed the same. We're not trying to make more money, but you may elect to do that so you can adjust your fees accordingly. But we've just been trying to keep our practice revenue kind of level actually because we understand this has been a tough time after COVID.
Speaker 1:But a practice that is 100% or highly dependent on insurance may see that their reimbursements have significantly gone down, and that's a big part. Garrett's saying number 10 is number six, not six yeah. So as you adjust your fees and get past all these 10 steps, what I want you to understand is now you can enjoy your career as a non-restricted provider, somebody that wants to provide their patients to the very best not what insurance says you can do and you're going to be a provider who will maximize your patient's insurance and your relationship now is clear, because now your relationship is to the patient, to provide them with the very best you can provide them with. And then your patients or their HR has a relationship now with the insurance, but we no longer have a direct relationship with the insurance, and so it just helps to take that cloud out of the way.
Speaker 1:I guess you know if you're in a relationship and you had a very good friend and that friend said hey, you know, if I said I want to date that person over there, and my friend said, okay, well, I'll be the middleman. Well, so you know, we tell that middleman something good to tell that other person. And we don't know if that other person gets the message or not. Or maybe the middleman has an ulterior motive they want to date that person. So you know, they say, oh, yeah, I'll tell the person that, that you really liked them. And they go back and say, well, he hates you. You never know what's going on with the communication in between.
Speaker 1:And so now, all of a sudden, it's just like okay, you know, um, mrs Jones, this is what I see, this is what I recommend and this is what the fee will be right. And if Mrs Jones says, well, what will my insurance cover? Well, you know, with a lot of insurance companies well, not with a lot of them, but with the major insurance company we worked with we could no longer call the insurance company and ask them because they would not tell us. And so we just tell the patient you know what, mrs Smith, you've got ABC insurance and they will not allow us to call them anymore so we can kind of give you a ballpark figure. So it just kind of takes that all out of the picture and just kind of makes it so the patient and I we have the relationship and we don't worry so much about the finances, and so you know, it just makes dentistry, I think, a lot more fun.
Speaker 1:I meet a lot of dentists now that that are undergoing or they're under the thumb of the insurance and they all wish they could drop insurance. But they just don't know how to drop insurance. And so that's why we we provided this kind of this three-part series about, um, the insurance, the considerations and today kind of the 10 steps I'd recommend if you want to, uh, decrease your dependence on insurance. Hopefully, drop them all. But some of us you know again that reward, risk reward some of you might have insurance company that's fairly good, you know, maybe pays 80, 90% of you UCR and they're very small part of your practice. So hey, you might just keep them. They could be a marketing arm. So with that, I just wanted to kind of go through that quickly, not to draw it out, but I will bring Garrett and Stephanie back in and I know you guys could fire questions at me, or if you guys have any bullet points to add on to that, go for it.
Speaker 3:Mike, great job. Hey, we brought this up in our last podcast, but I think doctors thank you, this is, I agree with everything you said it's super interesting and doctors that are listening, we just want, we just want, they just want the meat and potatoes normally Right, and so I think this was really helpful to give those 10 steps, and we have several of our doctors that are that we work with at the laboratory and in our teaching group that have gone through this process now, uh, successfully actually. Uh, a couple couple questions that I think might be interesting is what percentage of acids last time? But what percentage did you lose of your existing patients when you made the change?
Speaker 3:Now you've gone through it a little bit long, yeah, yeah, like I was telling, you.
Speaker 1:I don't know exactly Cause, like I was saying, a lot of patients you know they're they don't want to say all jump ship, all at the same time, and it happens over time. Like some patients, what I saw was that they were kind of confused as we were getting into this and they would come for the six months after we dropped insurance and they might come 12 months after that but then they might, you know, drop off. So I would say, just looking at our patient numbers, I think I said before between 30 and 35%, but it's just like a gut feeling. I'm not quite sure. And now you know, what mixes it up a little bit is, you know they do come back, and so I don't know what the true net number is, but I would say, just because it sounds good. You know, we were 65% with one company and I would say so 65% of our practice was with this one insurance company. We dropped that insurance company. I would say, you know, maybe we lost half of those. So it'd be somewhere around 30 to 35%.
Speaker 3:So to add on to that, mike, a patient comes in. You said that they might have come back once, or possibly even twice, and then gone away. Was there any uncomfortable communication the second or possibly third time regarding them having to pay the fee? Because you mentioned that you spent a significant amount of energy communicating ahead of time, both by electronic means, letter and in the office, telling them that there was going to be a change. Did you have patients come back and forget that and then realize they had to pay? Was there any? No, I think. What?
Speaker 1:happens is those are the patients that want to stay. But you know, when you read the reports that you know most families in America if they're hit with a $400 emergency, they can't afford that $400 bill. And I think that those are the patients that they're kind of affected, like that. You know where they want to stay. They I kind of feel like they're fighting to stay with you. But you know, the reality is is that they may not have the extra funds and because they're paying for everything up front, like even their profis, they come in. So if they get an exam and FMX and you know whatever services, it could be three to $400. And so that's, you know that's can be a burden on on some families and that's why I told the team I said you know, if we, if we lose a patient, you know we're not going to take it personally because we understand that finances, especially after COVID, cause we dropped this right before COVID and then we get hit by the shutdown, everything like that that that had a big impact on on everyone's finances.
Speaker 3:So you're saying so. Let me clarify. So you're saying that the patients may have come back the next time, fully understanding they're going to pay, but then realized, wow, that was tough on me to do, yeah, and then the next time may drop out. But there was no. There was no surprise or confusion from the patients on their following appointment.
Speaker 1:No, I don't think so. Yeah.
Speaker 3:Okay on their following appointment. No, I don't think so. I don't think so. Yeah, okay, got it, got it, okay, that's interesting. And then we talked about your numbers. Uh, it's been how long now since you have done the transition?
Speaker 1:Uh, I think it's been five years. I think I think we started it and, well, we started the transition probably in 2018. And then remember that that six to eight months leading up to that, so by time we did it, it was like 2019.
Speaker 3:Okay, so number eight or number nine was? You have to understand your numbers, so I'm going to ask you about your numbers and see your gross sales, regardless of production. We don't we don't care about production, we care about. We care about net dollars in your pocket. But it's been five years now. Have you exceeded your gross production insurance free now and if so, when? How long did it take to do that, if you recall?
Speaker 1:Yeah, no, we are above where we were gross production wise when we were with insurance versus without. So, yeah, we are above. You know the net is better because we're seeing fewer patients. But again, you know, part of it's the we're doing larger cases, and so what I found was is it was harder to do larger cases and when I say larger cases it's not all just aesthetic cases, but like doing implants and things like that it was harder to do implants and root canals in a general practice when you're seeing a lot of patients, whereas today, because we've got larger blocks of time open, I can have two hours in place to extract teeth and put implants in, or I can do root canals, and so we're doing procedures that are, I guess, higher revenue producing and I can spend the time with the patients and it's just more enjoyable to do those types of procedures because we have the schedule that will allow us to do that.
Speaker 1:So there's this whole transformation that occurs. Your practice changes. I think the quality of the patients changes, because now these patients really appreciate you and what you can do for them. You're doing the the higher, higher quality type of work. So so that went up our new, our new patients from insurance days to today is about the same, which is interesting. Our new patient numbers they did dip for a little bit and then we upped the marketing, because when I did this, I didn't do the marketing first. So we got out of the insurance contract, saw the dip in our new patient numbers and that's why I want you all to watch that and then we bumped up our marketing to compensate for that. So we saw that.
Speaker 3:So there's a formula that you used to teach at LVI you represented. I learned this when I was in my twenties and I live by the philosophy, but not always by the formula. But the philosophy fundamentally is you lose 10% of your clients, increase your fee by 10%, have a larger revenue and that take home. Do you remember that formula, mike? And roughly so doctors that are on board can understand, and it would be great to be able to provide that formulary to doctors if they want, by sending an email over to Stephanie and she can provide that formulary. Because I think I guess my point of this and I want you to answer the question is that if you really see how much you can lose but still have the same revenue, and then there was, how little impact losing 30% of your patients if you're not getting your UCR, if you're writing that off, may really be. I think it'd be surprising. So maybe you could answer that question.
Speaker 1:Yeah. So the study goes back, and I mentioned it before in this part two of the podcast was Eastman Kodak. They didn't make some great decisions, but in the early 1980s, the executives at Eastman Kodak were seeing that there was an increase in competition in their industry. So they wanted to see what the financial impact was going to be. So what they did because they had a monopoly on film, they were even in digital before anybody else was in digital it's just they did not make the shift in their industry, and that's so again, let me just say this before I go through the numbers is that our industry is changing.
Speaker 1:If you, if you, keep practicing the same way, you will get frustrated. And what I do is I look at these changes and go, wow, this is exciting. All I do is I look at these changes and go, wow, this is exciting. All I do is figure out how the industry is changing, modify my approach to dentistry and I'm going to be back in the game and having fun.
Speaker 1:So Kodak didn't do that.
Speaker 1:Fuji and some of the other film manufacturers were coming in at a lower price, and so what Kodak was trying to figure out is what were the effects of price increases and price decreases going to have on the profitability. You know, in line with a lot of dental practices, is that they figured that they could raise their fees by 10%, lose 30% of their customers and still have the same profit. So that's where that kind of comes into. You could raise your fees 10%, lose a third of the patients and still have the same revenue produced. So that's where, again, practices have to go through. They've got to figure out can they afford to make this change, what are the risks, what are the rewards and what's going to be the return. I think if they do that and they do it in an educated way, not just haphazardly saying I'm going to drop all the insurance companies today because I'm kind of tired of dealing with them, Just do it in a smart way. And if you do it in a smart way and you prepare for it, you can do it successfully.
Speaker 3:Yeah, and I think that's where Stephanie comes in. Steph, you're there, but I think you're there. You're back here, but there's Stephanie back, so we have Stephanie here and I think that's where it gets to be fun. I think it can be fun to experiment. It's like flying a flight simulator. You don't really have to get in the airplane, you can call Stephanie and she can run some simulations for you and tell you here's what you could lose. If you lose 10 or 20 or 30 or 40 percent, here's what you can do. And I also think that it doesn't just involve the dollars you can also look at. There's doctors that you know. I know doctors that have two staff members and practice three days a week and make more money now than they did when they had six staff members practicing five days a week. So what's fun about working with Stephanie is that you can play with these numbers and she can give you real analytics and real answers very easily to give you a target, correct, steph.
Speaker 2:Yeah, I mean, we've modeled this out with a couple of different practices and, yeah, I think, like Mike was saying, even if you're coming out, if your net dollars are the same, but you have less share time and less stress, I think that's exciting and, yeah, I'd love to do the spreadsheet part of that.
Speaker 3:Yeah. So for the doctors that are listening to the podcast, you can. You can reach Stephanie at S-B-U-R-R-I-L-L at thepacorg, p-a-corg, and ask Stephanie if she has some time to help and just go through these 10 steps with her and or her and I on the phone. And what's great about the PAC and about what we do at the Pacific Aesthetic Continuum with our clinical education is it's not just clinical education, it's also, I think, more contemporary. I think it involves the whole concept of your dental practice and your dental business. And that's what's great about being around like-minded people is that you have access to all this information before you pull the trigger.
Speaker 3:So, having Stephanie around to help run these numbers. Mike did a little bit of this, without following all of his 10 steps exactly, but of course he now has paid that tax and he's now sharing that with us. We've also had other practices, stephanie, that have just recently gone through the transition, that are immediately seeing increases in their revenue immediately and very little impact, even at 20% loss of patients. Patients are starting to return and they're having more time and we're talking 20 to 30% more revenue in that first six month period. So point is, we have several practices that have recently gone through this transition.
Speaker 3:They're within about a year now, correct, and nothing but coming up on a year and nothing but positive results for each of them. Correct, right, yeah, okay, great yeah, no, looking back yeah, so, mike, it's been five years. It feels like it's been a year or two. Yeah, I know, because you did this.
Speaker 1:Gone by fast. Well, it was a second time, so it was yeah. It's just like when you go back in you're working with the insurance companies, you know. Again, I know it can benefit patients, and we want to maximize the use of the benefits always but it just also feels like a burden, and when you're able to kind of get away from that, it's like a burden off your shoulders, which is kind of nice. So I think, going back, though, is you know you talk about the pack, and I think it's really important that you try to increase your skills so that, through the pack, you learn more about occlusion, you learn more about aesthetics, you learn more about restorative, you know predictability and you know the education is just really easy to get through the pack. I mean, there's not much cost involved at all. I think it changes your dentistry, and we talked about this. When you're around like-minded clinicians that have made these changes, it sure makes a lot easier than being with those that are just kind of staying with the flock.
Speaker 1:And you know, one of the things that I see is when we talk about aesthetics and things like that, there's a lot of courses coming out online that are, you know, talking about digital dentistry and everything like that, and I think one of the important things that I'll take this time to kind of mention is that I think it's digital dentistry is where we're going. What I've noticed is digital dentistry doesn't create the artistry of a smile. Like you know, hands do, or skilled technicians create, and so when you come and take, like our hands-on aesthetic course, you're learning all the ins and outs. It's not just a digital workflow, it's actually learning how to manipulate transitional line angles, how to manipulate color when you're doing your cementation or how to make the temporaries, and it's so much more than digital. So I encourage a lot of clinicians to come and take a live patient treatment course because there's a lot of things that will happen.
Speaker 1:That you've got the digital workflow that you may be working with, but as you're doing a prep or as you're doing a cementation, maybe a color is not quite right, or maybe a shape or contour is not quite right, or maybe the occlusion is not quite right. It right, or maybe a shape or contour is not quite right, or maybe the occlusion is not quite right. It looked good digitally, but it's just not the same in person and by taking a live course you learn how to get around all that. And so if you know how to handle all the hiccups that can occur, then it gives you much more confidence to do more of those types of cases, which then helps you get to this point where you can be less dependent on insurance. And so it's kind of the full circle. You know you've got to have the skills. Where do you get the skills?
Speaker 1:Well, I'd encourage everybody to look at the PAC or similar programs.
Speaker 1:Get the skills, hang out with clinicians that are maybe doing the type of work or have the type of practice you would like to be able to attain at some point, and then it just kind of rubs off and you are able to accomplish your goals.
Speaker 1:And so I'd really encourage people to not get swayed so much by everything that's digital. I was telling a colleague the other day it's kind of like, you know, when our kids learn how to do math today they can learn how to use the calculator or use their phone or use you know whatever. But if they don't have that phone and somebody asks them, can you divide this number by that number? If they don't know how to do that, or they don't know how to add anymore, you know they're stuck, and so I think it's really good to learn how to do things with the basic principles and then, on top of that, you layer on the digital and that's going to help you succeed. But you have to be able to share ideas, you have to be able to share experiences, and that's kind of the richness of the education that the PAC provides.
Speaker 3:Mike. I think that's great and I wanted to invite our Catapult Grow members, our laboratory members at Core Dental Lab, our PAC members at the Pacific Aesthetic Continuum and our DSO members that they can find all of these podcasts, and they can find podcast one and podcast two at our Catapult Grow landing page or they can log into the pack and they can find these podcasts there as well. And I think listening to the first and second podcast is great and I really appreciate it. I want to thank you for putting together these last three on these series, and especially the one through 10 today, because I think that gives everybody a good idea of of answering a lot of the questions that they that they have, and I encourage everybody to please feel free to give us a call If you have any questions regarding this.
Speaker 1:We're happy to help Well thank you guys for joining me, or Stephanie, thank you.
Speaker 3:Dr Mike, as always. Thank you, Stephanie.
Speaker 1:Yeah, thank you for joining us again.
Speaker 3:The best thing to do is to call Stephanie. She'll run the numbers for you. I think that's all right guys. Mike, thank you again so much, Great job. As always thanks for sharing the information. Thank you.
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