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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.
Dentist2Dentist
Transitioning Away from Insurance for Greater Profitability
Unlock the secrets to thriving in the dental industry with insights from Garrett Caldwell, the visionary CEO of the Pacific Aesthetic Continuum and CORE Dental Laboratory. Discover how dentists of all generations can navigate the evolving landscape of practice management while balancing lifestyle aspirations and business objectives. We speak candidly about the shifting priorities of professionals at various career stages, from those considering retirement to newcomers exploring practice ownership, all amid the challenges of natural disasters and economic unpredictabilities.
Imagine crafting a dental practice that not only supports your financial goals but also enhances your quality of life. We break down the process of creating a robust business blueprint, emphasizing the meticulous planning needed to achieve success. From understanding overheads and setting revenue targets to implementing skill stacking strategies, we offer actionable steps for expanding your range of procedures and boosting hourly revenue. This journey is about empowering dentists to reach financial stability while achieving the elusive work-life balance.
Explore the transformative journey of transitioning to an insurance-free dental practice and the financial and emotional considerations it entails. We share firsthand experiences and guidance on the benefits and challenges of moving away from insurance contracts, advocating for the modernization of practices with technology and strong marketing strategies. As we discuss the impact of inflation and stagnant insurance reimbursements, we highlight the potential for practices to thrive by adopting fee-for-service models and reducing reliance on large team structures. Join us in envisioning a future where practices can achieve profitability and sustainability, buoyed by innovation and strategic foresight.
Well, I'm really excited about this information that we're bringing to you. It's probably going to be a multi-part interview that we're doing. This will be part one and I anticipate there'll be a part two, and this is some great information. If you are feeling a little stressed about your practice, not sure what to do with your practice, this information is going to be for you. So stand by. All right, everybody, good to see you back again.
Speaker 1:This is a YouTube that kind of morphed from the podcast that we were doing for the Pacific Aesthetic Continuum. So again today we have Garrett Caldwell, ceo of both the Pacific Aesthetic Continuum, which is kind of the teaching arm of CORE Dental Laboratory, and CORE is based out of California, sacramento area of California. So if you're close by, stop by. Anyway, today what we're going to do is we're going to go through with Garrett and you know if you've heard these recordings before you know Garrett and I talk about the business of dentistry and this is really kind of focused more on the business side than the clinical side. Today what we want to do is Garrett's going to give us some more definite next steps, at least four good next phases in your practice development. So, garrett, welcome, nice to have you on again.
Speaker 2:Hi Mike.
Speaker 1:Is this Happy New Year Is this our first podcast.
Speaker 2:Happy New Year podcast. Yeah this is Happy New Year, you're not supposed to say that after the 7th of January?
Speaker 1:Yeah, yeah, well, so if you are, well, it could be. This could be January 2nd or 3rd, all right, but the year is 2025. I tell you, this year is off to a crazy start. We're based out of California. You may not be in California, but, as you know, we've had those fires in Southern California.
Speaker 1:So, again, we feel really bad for everybody who's had to go through that and our wishes go out that everything is good for everybody down there. It's just one of those things. You could not predict that something like that could happen. And then we have the fires that have happened in northern california in the past, but now we had fires that happened in what monterey, now san diego. So california is a is a hot state right now and, yeah, it's kind of hard, but we're going to look as 2025 as being a positive year, a positive year for change. I think our practice. We've got some big targets that we see for this year Not small, 10% growth, but we're looking to kind of 10x that. So we're excited about 2025. And later on we can discuss how that's going.
Speaker 2:Well, the results are yet to come in, right, Mike? Exciting stuff though'll, we'll give everybody a little teaser once there's a lot of exciting stuff happening at miyazaki temple this year, yeah but this year's turned out pretty well.
Speaker 1:You know it's funny. The first week in january I just figured, okay, well, it'll be slow. So we took the whole first week of january off and right now we're we're way ahead of where we were. Uh year year, january of 2024. So that's a good sign? I don't know. So, going back to one of the comments we talked about before, you can look at the general economy and sometimes you wake up and you look at your phone and there's nothing but bleak news. And I don't really worry about that because my business is small enough that I can kind of control the environment and the micro economy around that practice. So I think that's what we look and that's why I think it's so important that we go through what you're talking about today, because with your information I can influence that micro environment even more.
Speaker 2:Well, you know, we're going to talk about today what we've been talking about, and I think we're going to talk about today what we've been talking about and I think we're going to. If you take a look in the rearview mirror at some of the speakers we've had in the last six months, we've been fantastic. All of them, All of them successful in their own right, All of them have a lot of wisdom and I think Mike, you and I talked about. You know, what should we talk about today? We talked about the business of dentistry, Because it's not a dental practice anymore, there's been a.
Speaker 2:I guess there's two segments. If we're going to try to break it down simply, there is a 10 year doctor, somebody who's been practicing for 25, maybe 18, 17, 18 to 25 to 30 years, and what they're maybe looking at now looking forward, transitioning the practice, retirement or just transitioning a practice into something different for their senior years, because they've already settled themselves financially. And then the big contingent, which is the new docs coming in, that may be graduates all the way up to their first five to seven years, and what they're looking for, and a lot of them are now entering into potentially owning their own practice and having a completely different set of decisions to make than the second group had. That I talked about.
Speaker 2:So, I talked to you, mike, about lifestyle goals, lifestyle defining the lifestyle that the younger docs are really important to them. Now We've been interviewing a lot of the doctors we work with at the laboratory. Mike and I have been interviewing doctors and for the younger doctors, the reality is is that time is very, very important to them, personal time we our lifestyle goal when we were younger was graduate and go to work.
Speaker 2:And the lifestyle was eight to five or eight to six, five or six days a week and work as hard as you can. For 20 years, maybe have a family, raise a family, but work was our lifestyle and that's completely different for the younger generation now of doctors coming out. Lifestyle is very important to them. So I'd like to talk about a little bit about both of those choices. Some some, I think move back and forth. Some of those decisions may be are are options for both, but I think there are two distinctive goals that both groups have to think about.
Speaker 2:So, for us today. We're going to talk about, I guess, that younger generation first, maybe the docs that are coming out of dental school and have been talking to us about what's important to them. And what's important to them, I think, is what's really important about what we've been talking about, which is the business of dentistry as opposed to the dental practice, because if you practice anything, that in of itself means you're going to take a lot of time to get to where you're going.
Speaker 2:We talked about the 10,000 hour principle. Where's the tipping point of becoming really good at what you do? Do you have that kind of time to invest 10,000 hours, 10 years of your life, to become really good at dentistry, or do you have to accelerate that? And so for us now in dentistry, mike and I think both agree that business it's a dental business now, not so much a dental practice. And although it's a practice and it's professional, we have to operate it as a business, would operate it as a ceo, would operate a business.
Speaker 2:So first we'll talk about defining. I guess what's the most important thing to figure out and from what we've talked about, mike and I want you to jump in here is that you know the younger docs need to define what their lifestyle goal is right now. How much time do they want to practice? How much time do they want for their social life and for enjoying their free time? And maybe for the senior doctors, how do they see themselves practicing for the last part of their career and do they want to incorporate some of these strategies possibly into their last years? That's number one. So one of you I'm going to, I'll shoot it over to you what do you think about lifestyle goals and what's been your, what's been your observation? Now you're, you're. You're kind of that older doc that's changing. You're living more of a lifestyle based practice, but now you're flipping over to full-time work again.
Speaker 1:So tell me what you're thinking yeah, no, you know, I think think lifestyle is is really important and I think there are general generational differences if we over generalize. But you know, really quick, I talked about before where, when I got out of dental school, I worked four 10-hour days. So I thought, well, that was great, I got my 40 hours in. Because when we back in the day, we thought every work week was 40 hours, so it was a 40-hour work week in four days. I thought, well, that's great, I get three days off. But what you learn is dentistry, 10 hours a day, is very taxing on your body. So fortunately I was like 25 years old and I did that into my early thirties and it was okay. You know, my body didn't give out. Today I'd probably give out, but then what I did was then I got out of that practice.
Speaker 1:I started my own practice and we were in what we call a space sharing arrangement and that's where I was sharing the office space with another clinician. So what we did is we broke our days up into six-hour days and so then I went from working four tens to four sixes and so I went from 40 hours a week to 24 hours a week. And you know. Back then I thought, wow, you know how am I going to work half, about half as much and still be able to provide for my family and everything like that? And what I learned was that 24 hours a week I was doing just as much as I did before at 40 hours a week.
Speaker 1:So in my evolution over all the years, I've worked four days a week, five days a week, three days a week, two days a week, and what I've always noticed is it doesn't really matter how many days a week I work. It seems like the revenue stays about the same. So that's a lifestyle choice, you know, because other things I love doing the clinical part and being in the office, whatever time it takes, so I can take care of the patients that I need to. But on the other hand, I've got a lot of other interests that you know I like to do too, so I need to parse a lot of time for that. So it is finding that balance. And so in talking to young dentists, two things that I can think about is one they'll come in and say well, can I work four days a week? I'm like well, I don't know if I'm busy enough in my practice for four days a week. But do you really want to work four days a week? You don't really have to work four days a week. And again, you know not to overgeneralize, but there's people that have families and I tell them, you know, you might be better off just working three days a week instead of four days a week and it may not impact your income and you'll have a better balance of life. Because I think that's one of the reasons why dentists have, you know, the supposed high divorce rate because we're exhausted, we get cranky, because we're working too hard.
Speaker 1:And the other thing is, when I taught to dentists, I lectured this last weekend for the AGD, and the AGD is a great group because the doctors at the AGD meetings are really focused on acquiring education to further their practices and get their hours, so they get mastership and fellowship. But I was telling some of the young docs I said the problem with you and we've mentioned this before and I don't mean a problem with them but the problem with their thinking is that they're thinking how much am I going to make per hour and I go. So you know they're thinking an hourly wage. You know I'm going to go work for a senior doctor and I'm going to think about is you know how much revenue can I generate? And then, off that revenue, what will I get paid? Because I get a lot of young doctors that come in and they'll be interested in an associate position and they'll ask well, how much are you going to pay me? And I tell them I go. That's the worst question to ask, because I can't tell you. The question you should be telling me, or answering for me, is how much value will you bring to the practice? How much revenue do you think you can create within the practice? And then then from that, I can tell you how much I could pay you, because if you're, you know, if you're going to produce fifteen hundred dollars a day, I can't give you thirty percent of that because you know the practice isn't gonna make any income having you here, whereas if you're doing $10,000 a day and you want 30%, well, I can give you 30%, 35% and still, you know, be good for both of us, win-win. And so I absolutely agree.
Speaker 1:I think today it's a smart thing to figure out how you want to lead your life and you're calling it lifestyle. So you have this lifestyle goal to lead your life and you call it lifestyle. So you have this lifestyle goal and I tell the end dentist, if you want to be happy, I think in your career you have to design your life. So I think you're absolutely on the right track. That first step, because if you don't design your life, someone else is going to do it for you and they're going to make a fortune off of your life.
Speaker 1:So if you go work for an entity that's paying you hourly and maybe it's not the best hourly, but they work you to death you're making them a lot of money and your lifestyle is kind of shot. So what I totally agree with what you're saying is develop your goals and then design the business to achieve those goals. And in dentistry you can do that, because there's no one way of practicing dentistry. All of us have a slightly different practice and that's what you know. In my practice we do the things that I enjoy doing, the things that I think I'm better at doing and those things that I'm not feeling comfortable about. You know I could let somebody else do those parts of our profession. So I think you're obviously right sit down, figure out what that lifestyle is and then figure out how to get there yeah.
Speaker 2:so so you, you said a lot there and you're talking so and for some folks they're going to grasp everything you said. You know my production versus my net, my net operating income versus what I can actually take out of the practice. If you're an associate, that's a little challenging because you may not understand the economics of the dentist you're working for or working with and, frankly, the dentist you're working for, there's a good chance that they may not know what their economics are, that they're just following a lead from tradition, which is where I guess the next segue to the next part of this is. So you know, really sitting down and taking a minute to write down what your goals are, what you want to do with your life. Do I want to surf? Do I want to be in Bali? I have a doctor who goes to Bali every year, year for two and a half months. He lives in hawaii, he practices in hawaii, he surfs every afternoon and then, for two and a half months, he closes the practice and he's in a surf camp in bali. He's in his 70s now and still surfing every day, and he designed his practice to accommodate that. So the next first thing you need to do is figure out what that is, and that's going to change, of course. But to start off, I think it's worth writing those goals down and this is how I want to practice.
Speaker 2:Regardless if you're an associate or have your own dental practice, your plan is to go into your own dental practice. The next step is developing a business blueprint. That's number two on my list. So what is a business blueprint? A business blueprint is nothing more than you want to build that White House on Elm Street and everybody wants to have a successful practice and have time in their life. But you have to, to the best of your ability, start defining as much detail as possible and then, if you need help, you can hire an architect. If you have to, to the best of your ability, start defining as much detail as possible and then, if you need help, you can hire an architect. If you need help, you can get some consulting and we'll talk about that, those options for doctors as well.
Speaker 2:But the business blueprint is going to take into consideration your lifestyle choice, what you want to do, how many hours you want to work, where you want to be I want to be in Aspen at these times of the year. They're going to help you define your overheads, your expenses. They're going to help you to find your revenues that you're going to need to cover those overheads and expenses. They're going to help you define, of course, the time that you're going to need to spend in the practice to achieve those revenues so you can take those that time off. Most importantly, they're going to create you're going to create a budget and then you're going to determine marketing. Now, those are, those are a lot of financial mechanisms that you're going to have to figure out as part of your demo business to support your lifestyle.
Speaker 2:Uh, but the next part of it's going to be and, mike, you talk about this a lot, so before I go there, so we're going to go there, so we're going to understand how we want to live our life, what kind of money that's going to take to do that, how much time we're going to need. And then, if we have a dental practice, we're going to have to turn to our economic side of us and say, hey, what do I need to produce every day? How am I going to produce that, what are my overheads? And really understand the business overheads and really understand the economics of your business to be able to apply it to that lifestyle. So that's the next part of it. So I'll stop right there and we'll talk about business blueprint. I want to push it back to you, mike. So how do you plan that in your practice?
Speaker 1:Yeah, no, I think absolutely. Once again, I recommend that everybody follow what you just suggested, and you know it goes back to an example that's often given about doing this business planning. None of us ever do it, and so when you look about how we go about planning a vacation so I just planned a trip for my wife we went to Napa for our birthday last weekend. We joined up with some of our cousins and I mapped it all out. You know, this is what time we're going to join up, this is where we're going to stay, this is the activities, the wineries we're going to go to, this is the car I'm going to use to get everybody around. And I spent like a whole day putting that trip together. When you think about it, I don't think I've ever spent a whole day figuring out my business plan right. So we spend more time planning trips than we do our business, and our business is what's going to fund all the trips. So we have to remember to really do that.
Speaker 1:And going back to this whole thing, because I think what doctors will do is they'll sit there and go. Well, I want to make a million dollars. I'm just today. It's probably not a lot, but let's say, a million dollars in collections in my practice a year and I want to keep the staff or my team numbers minimal. So usually you know we'll talk about later is if you could go fee for service, that might help. But you want to be as efficient as you can with those funds. Well, so many doctors will sit there and say, okay, I want to make a million dollars in collections. This is how many hours I have to work in a year. Man, that's like I have to do $1,000 an hour. Well, I can't do $1,000 an hour because if I do three fillings in an hour I make $400, right, it depends on the reimbursement that they get. So how do they get to the point where they can go from doing $400 an hour to doing $1,000 an hour so they can hit their goal? Well, that's going to be through education. So one of the things I was emphasizing this last weekend at the AGD is I call it skill stacking. That's where you can just do a filling, or you could do a filling and at the same time you could do a root canal. You could do a root canal, or you could do a filling and at the same time you could do a root canal. You could do a root canal, or you could do a root canal in the crown in one visit, or you could do an extraction and do the implant. Or if you don't do the extraction, what happens is let's just take that as an example If you have a patient with a broken down tooth and you can't restore it, so you're talking about bridge, nothing removable, or an implant.
Speaker 1:So if you don't do extractions, the patient comes in, you diagnose it, Then you have to refer the patient out for the extraction, and maybe that surgeon's in a graft and then the patient comes back and then maybe you have to refer that patient out to have the implant placed, Maybe the same surgeon or somebody else. So now the patient's gone, Now you're off his twice and then they come back Once it's healed up. Now you do the crown on the implant. But the patients had to go to different offices and because they went to different offices, you lost the revenue produced during those visits. Whereas if you had that same patient and we do this often is we extract that tooth, so we take the tooth out in our office, we put the implant in while the patient's numbed up, because we have the socket now to put the implant into, and then we let that heal up and then we'll put the crown on. So not only is it a win-win for the patient because they get it done in one visit they didn't have to leave the office and have multiple visits elsewhere but it's a win-win for the practice because we're providing that care directly to our patients who trust us and we get to do everything in-house with a minimal number of visits.
Speaker 1:So I think you have to look at the life goal plan, Then you have to sit down and blueprint it out. So now you're putting it actually on paper, You're working out all the formulas. This is what I want to produce, this is what I do per hour. And then you'll be befuddled Well, how do I get there? Well then, that's where the education comes in. So we talk about you can spend three hours doing a bridge or a crown or two, or you could spend those three hours and do ten units for aesthetics or something else, and so now that's a 3x of your time on what you can produce in in that amount of time. So again, it's just the education, the confidence that you gain as you do more of these classes. And so again, during our PAC courses. That's what we try to emphasize. We try to get the doctors to understand okay, now you've got the skills, but now you've got to go back with your plan and implement how you're going to use those skills. And you know, it's everything down to standard operating procedures.
Speaker 1:When the patient calls, what's the front desk say? What's the hygienist say? If the patient comes in for a hygiene visit to just get the patients to, I tell people it's to form a gap. The patients don't know that you do ortho or maybe clear trays in your practice. But the hygienist says hey, you know, these teeth are really crowded, it's really hard to floss, your gums are really red and your breath's really bad because you've got so much calculus forms. It's not your fault, it's just the teeth are so crowded. Well, have you ever thought about straightening the teeth to make it easier to clean your teeth? And the patient's like no, I never thought about that, Never really hooked those things up. So now we've created a gap where the patient now realizes there's a service you can provide in your practice. It's not a sales pitch, it's just telling the patient hey, have you ever thought about this? Because this is a problem that you have identified bad breath, inflamed gums, chronic inflammation not good for the patient. Okay, here's a solution.
Speaker 1:And now the doctor comes in and says yeah, you know, looking at your mouth it looks like you are a candidate for ortho braces or clear trays and almost everybody can do clear trays. And now you know, the revenue's gone up. But it's a win-win because it's good for the practice. But the patient wants that service, they value that service and you know again, we've mentioned it before and I was mentioning it this weekend I said, you know, sometimes you get, you go to a dollar store and you buy a pen and for a dollar you know it's a pen. But when you get it home I noticed this when I go to dollar stores and you try to use the pen, it doesn't really roll very well.
Speaker 1:The ink kind of blotches as it comes out through the ballpoint pen, and so I spent a dollar and I just get so frustrated using that pen. I usually just throw it away versus I could go and I could get a fancier pen. I probably have one in the drawer here and it's got, you know, mahogany on the outside and it's got polished chrome on the for a clip. And man, when you, when you get that ink out and you start writing a signature, it's like your hands gliding over the paper and that pen's a hundred bucks. But you know you look at that and go, wow, that's a great pen. You know a hundred bucks was cheap.
Speaker 1:So that's why I sell the doctors too. It's not the price, it's not the fee that you associate with the service, but it's the value that the patient feels they're getting. And you know we go through it every day. Like, why do you go to Starbucks to get a coffee and it costs you $4.50 versus like myself, I take a scoop of instant coffee. It probably costs me 25 cents and we get coffee. But does a Starbucks coffee make me feel better? Yeah, but I need to protect my revenue, so I go with the instant coffee. So sorry to make it so long, but I think that's the important part.
Speaker 2:So that's a great segue. I agree with what you're saying, mike. So defining the lifestyle sitting down and doing a budget of time and productivity what revenue that's going to bring in? Balance that against your fixed expenses?
Speaker 2:your team your staff have to be paid well, they have have to be happy see what's left over and see if that's going to be enough to meet your lifestyle goal. But then next, finally culminating into applying, uh, the best model, or what you always talk about is. What you've been talking about is best best practices, but what differentiates you from the rest of the dentists is also probably what's going to allow you to get to that lifestyle goal. So my number three is culminating is after budget number two, after budget number three. Culminating and applying best model or best practices of restorative services and possibly specialties you call it stacking that will allow you to offer or differentiate yourself to your patients, thereby creating more revenue.
Speaker 2:So, instead of sending that person out to get the extraction, coming back checking them OK, sending them out to get the implant. What's going to differentiate you as a dentist is they can do it all in one visit, right at your practice. Folks are going to talk about you as a doctor. They're happy to pay that. That revenue stays in your practice. And now, instead of one X, you have four X or five X. You have a $20,000 morning instead of a $1,500 morning. That creates time.
Speaker 2:So for our lifestyle, doctors, I think it's really important to understand that what you're going to offer, that's going to differentiate you and be able to help you meet those goals. So, yeah, I agree, and what I guess the word for me is differentiate. You know you have to. You can't be practicing traditional dental, school dentistry and then think you're going to work 24 hours and have enough money to take one week a month off. Now you might not care about the money. And have enough money to take one week a month off, now you might not care about the money. Maybe you jump in your van and take off, and it's not all about money. But things are expensive now, especially in California, as we know, and everywhere in the United States.
Speaker 2:I know our president's going to be working on that, but at the end of the day, overheads, if you're practicing other than being an associate, if your plan is to be independent, most doctors are going to want you to be there. I'm assuming you're asking your associate to be there three days a week, and if that associate says to you, yeah, but dr mike, I'm going to work monday and tuesday, but once a month I'm going to take two weeks off, it's probably not going to work for you as a business. So my assumption is that most of these doctors at some point are going to plan to become independent or have something that differentiates them so much as an associate that is valuable for a doctor to have them in the practice two days a week. That's all. So I think that's great. So that's the first three. So now let's stop for just a minute and let's talk about the more senior docs. Let's talk about docs like you that have been practicing for 35 years and you have only 20 years left to go yeah, yeah, I wish it was only 35 years
Speaker 2:you have 35, so you have 20 years left to go. So here's a question that you recently answered and some of the doctors that we do consulting for we'll talk about the consulting in a minute but some of the doctors that we try to help with, some of the doctors that we do consulting for we'll talk about the consulting in a minute but some of the doctors that we try to help with some of the resources. So you talk about stacking, so I'll take a segue on that. So the laboratory, our laboratory, produces dental restorations. We do interior aesthetics and we do interior esthetics really well. We offer education, we do that well. But one of the things that we try to do is offer something that we do already to our clients, which is offer financial services, help planning, budgeting planning, which is something that we do every single day, and I just want the doctors to know that are listening to this. If some of this is confusing and you just need some help, we do offer that assistance.
Speaker 1:So I hope you like this interview so far and if you do and you want more information, like this interview so far, and if you do and you want more information, reach out to the pacorg the pacorg to learn more.
Speaker 2:Mike and I. Mike, you just transitioned your practice I'll say recently from from insurance-based to independent. We have several other doctors that we work with closely over the last couple of years making the decision should I stick on insurance? You know, hopefully you're not capitation, but if you're with Delta or with another Premier and and you're in that, how is that going to affect my, my revenue of my freedom? Is that going to create more time or less time? What's the impact? There's a big fear on that.
Speaker 2:So, for the docs that have been practicing for a while or for doctors that are just coming in, to make the decision to be independent of insurance is a big decision. I feel it's a big decision. That's right up there in front in the front row, maybe right next to do I join a DSO. Now, if you're a young doc without a practice or an associate, or just getting into a practice, you're probably not going to do a DSO, Although we have young doctors, some of them, that have four and five and six practices in their first five years of practicing. But let's just take that out for a minute and just assume that you're going to be practicing for a few years before you decide to enter a DSL.
Speaker 2:Really, the question becomes are you going to be insurance free and how does it impact your revenue? And I think that that's often misunderstood and I think that goes back to number two. You need to really be able to blueprint. If you're a doctor taking insurance, you need to understand how to sit down and say okay, how much am I discounting my fees and how many patients can I lose and make the same revenue that I'm making working that 40 hours? What are the impact on my practice going to be? And I think it would be very surprising for most doctors.
Speaker 2:Now I know you say it's not for everybody, senior or not, successful or not, leaving insurance, you always say, is not for every practice. So I do think it's important to talk to somebody about helping to analyze what your practice is, what your patients are, what the social aspects of your practice are, what the financial aspects of your practice are, and how do you determine those impacts. You determine it through offering advice to people who have gone through it and then to help offer their best suggestion on that. So you have transitioned recently and you do not accept insurance and we're.
Speaker 1:We accept insurance, we help our patients maximize, but we're a non-restricted provider you're a non-restricted provider, so you offer your, your patients, the ability.
Speaker 2:You'll help them build it out, but they get. You have a fee for service practice. You're full fee. You're not discounting any longer.
Speaker 1:Right.
Speaker 2:And you're not subject to a third-party set of rules or fees. So let's talk about that briefly. For you, it was the right decision, but there was a lot of fear and a lot of questions, and now you've gone through that and you have a lot of knowledge.
Speaker 2:Now you can look in the rearview mirror and help other folks. So tell me just a little bit about that process again and how that impacted your team, how that impacted your revenue. How much more time did it create if you chose to take the time based on lifestyle?
Speaker 1:Yeah. So you know, I talk to a lot of doctors now that have kind of gotten off all their insurance contracts and so I have a chance to talk to other clinicians and ask them how it's worked out. And everyone I talked to even this weekend I talked to many doctors that have just gotten off of insurance and they all have told me that you know they are so happy because they did that. There was really no way they were to survive if they had stayed with the restricted reimbursements that a lot of these companies are giving them. But you're obviously right Before and we had a whole podcast series talking about how you could decrease the dependency on insurance, because it's not something you just want to go out and do without being prepared, and you have and you have to prepare your patients, your team and yourself financially to be ready to do that. So when we I've I've let insurance go twice, the last time we did it was right before COVID, I think it was. 2019 is when we went. So about five years ago and before that I looked at the financials we had to kind of strengthen up the practice. It was an older practice. It wasn't electronic charts, there was no digital radiography, there was no technology. So I made the spend invested in that just to kind of set us apart, and it helped me do the type of dentistry that I wanted to do. And that type of dentistry has oftentimes been referred to as kind of remarkable type of dentistry. It's the dentistry that when patients leave, they're going to remark about to their family and friends oh you know, I just had this done, I had this done and it was, you know, convenient. So it's kind of that remarkable type of dentistry.
Speaker 1:But I was telling the doctors when you look at, you know, the past inflation that we've had during years, during the last four years, certain years we had like I think it was in what? 2021 or 2022, inflation was 9%. And if you look at 9% for just one year's period and during that time insurance reimbursement did not go up and for some doctors it actually went down. So if you were making 25%, let's say that you're overhead of 75%. You're making 25% and just inflation alone, not even including wage inflation and everything else, but just general inflation. If it went up, let's run 9%, 10%, just for round numbers. Now you've gone from a 25% profitability to 15%, which is almost half, so that cuts your profit down by 40%.
Speaker 2:yeah, that's a 45% cut in pay.
Speaker 1:Yeah, and so you know the clinicians were trying to figure out why am I so stressed? Well, it's because you're going to work. And so what I noticed as I was lecturing is, before I'd lecture typically on a Wednesday or Friday, and then went from Wednesday, friday to Saturday because doctors were working Wednesdays and Fridays. And then it got to where I was asked to speak on Sundays. I'm like, why am I speaking on a Sunday? It was because the doctors were working on Saturdays.
Speaker 1:Now and again we've talked about during our past podcasts. If I don't know the numbers and that's what you're trying to provide as a service if I don't know the numbers, I could be working more hours. But if the hours I work, I'm actually losing money because I've got to pay for my team to be there, I've got to pay for everything else it takes to provide that service I could. If I extend my work hours let's say I go from working 40 hours to working 48 hours, I throw another day in there that could just mean I'm just losing more money. And so I think it's really important for us, as clinicians, to really understand what's the true profitability and make sure that you're actually making a profit, because there's a lot of clinicians that are not making a profit or not much of a profit, and that's why it becomes so stressful.
Speaker 1:So you know, just an example is if you were reimbursed and these are kind of the extremes, but let's just say for run numbers you were being reimbursed $500 for a crown and off of that $500, your profit was $50, 10% of that. Well, imagine if you could be, maybe fee for service and make $1,000 for that crown. Well, what does that represent? That's $500 more that you're making for that crown. That's taking that $50 of profit and 10x-ing it. So now you're making $500 a profit.
Speaker 2:Mike, I'm going to stop you right there. For me, what that says is just for the folks listening is that if you have a 10 patient schedule, you could now go to a five patient schedule and have the same amount of revenue.
Speaker 1:Well, so if you're making $50 on that crown patient, but now you're making $500, that means you could take the 10 patients and just see one and make the same amount of money and it's going to be even more.
Speaker 1:Because I talked to doctors this weekend who had let insurance go and they said they cut down their team size, which decreases the overhead dramatically, because one of our biggest expenses which is actually an asset but the biggest expenses are salaries for our team and so if you can cut that down now you're making more than $500 net profit. You're probably making $600 off of that crown. So that's why I told my team I said when you let insurance go, you're going to see the activity, your schedule is going to have all these holes all around, but at the end of the month you're going to say, wow, we did better than I did last year when I had all the holes filled up in the schedule, because you're just so busy but you're not really profitable. And I think that's the thing that drives me crazy, because this weekend again, like I was saying, I met, as I was teaching, I met doctors who had let insurance go and and and they're going. You know there's just so much happier. But we but when we sit there and we talk, we realize that most are afraid to let insurance go and we've all been there. So we don't fault those that have that fear. But before you do it.
Speaker 1:I think you have to upgrade your practice. You have to upgrade your marketing, because your insurance, the fact that you take insurance, that's like a stream of new patients. A patient gets a new job, they get insurance and they look up the doctor closest to them that has decent reviews, that they can go see to take care of whatever issues they have cleans or whatever and use their insurance. When you drop insurance, that gets cut off, the insurance is going to say don't go see Dr So-and-so because he's not part of our network. You'll save money if you go see a doctor in our network.
Speaker 1:So you really have to develop that brand that I've talked about in the last year. So patients go you know what I know it may be a little inconvenient with my insurance, it may cost me a little bit more. In some cases it's not going to cost them any more to go see Dr X who's out of network versus Dr Y who is in network. And Dr X who's out of network is going to have to have a marketing plan so that the patients really understand their value. And so that's where there's a lot to think about. But I think it's doable for anybody. I mean, if I could do it. I think anybody could do it.
Speaker 2:Well, I think that's what I think is important for the listeners to understand is that there's a lot to think about, but there is a systematic approach to doing this and we can provide a lot of feedback and help with analytics, with their practice, to help maybe take the edge off of some of those questions.
Speaker 2:I think that's one of the and that's the segue into what we were talking about a little bit earlier. That I wanted to talk about is that at CORE, we have a CFO and we have a business department and you know, in the dental laboratory business we're a little different than the doctor's offices, but we've also owned our own practices, and Mike and I have obviously owned a practice together and as a group, and we've been working with doctors for 30 years, and so the most successful doctors that we see around ourselves, they're doctors that really understand their numbers, and when they don't understand their numbers, they seek help in trying to understand how to understand their numbers. Really, what we're talking about now is a blueprint to develop a blueprint. So our blueprint is defining the lifestyle, understanding your budgets, deciding how to differentiate yourself and what you're going to need to do within your practice with your hands to be able to maximize your time and then decide, as part of that, is the traditional path of insurance going to help you or hinder you? Do you start off differently? And if your existing practice, is it time for you to make that change? Are you working hinder you? Do you start off differently? And if you're existing practice, is it time for you to make that change? Are you working harder for less? I see doctors, we talk about the examples you just gave. There's a lot of little parts to sort of filter, but again, I think what we can do to help the doctors if they call us and say hey, garrett, stephanie, mike, I'm thinking about this.
Speaker 2:I have no clue where to start. Well, the first place to start is let's do your analytics and let's talk about your patients and let's talk about the social part of your practice. And you know, tell me, do you think your patients like you? Do you have the same patients for years? How many new patients starts do you have?
Speaker 2:Because one thing you got to realize is where you're talking about a bubble, where there's no new patients coming into practice, can you imagine if you have 23 new patients? You're doing that $500 crown. You're working three days, then four days, then five days, and your numbers seem to be doing okay, but you're discounting the fact that you're adding for the attrition in your revenue. You're adding patients also, so you're seeing more patients every day. So it looks like you're growing but you're really losing. You may have a little bit more money in your hand, but you're seeing three times as many patients. So if we flip that around and say we lose 20 to 30% of our patients by going to insurance independent and I think that's probably a realistic number but you're making five to eight times more revenue and you're adding new patients to the practice the way you were before, the result seems to be it's all okay. It's still scary, but it's all okay.
Speaker 2:So I just want our doctors to know that there's a lot to think about there. Like you said earlier, it's not just I'm going to make the decision, you have to plan for it. You have to prepare the practice first and foremost, prepare your marketing, make sure you have your best practices, then have a budget so that you're prepared to step off. And I just think that that's really important to our listeners because I think that's something that's right out there, right in front of everything right now. Um, so thanks for that, and I just want the doctors to know that we can help with that. We have a lot of doctors in our group in the PAC that have made that transition. We have a financial entity that will help break down some of those decisions and we can kind of do some comparisons to past practices that have done it and we can kind of take a look at what might work for you and what might not work for you.
Speaker 2:All right, michael thank you so much again, until next month.
Speaker 1:Yeah, okay, sounds good. All right, if you like it, hit like, and if you want to hear more, hit subscribe. We want to bring you some information that you can actually use, that you enjoy listening to and that helps to improve your life. All right, thank you very much.
Speaker 2:Take care.
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