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The bright future of dental membership plans

June 11, 2021
Dental membership plans in 2021 offer more advantages than the plans of the past. They're more refined, and there are numerous benefits for both patients and dentists.

Membership plans gained momentum about 10 years ago when dentists realized they needed to offer something to uninsured patients. Dentists asked consultants how to help them structure their plans and create processes for their new in-house plans. To those early adopters and trailblazers, kudos! Dr. Jason Flannagan’s practice, one of the early ones I worked with, is among those that deserve kudos.

Savings plan, discount plan, and in-house plan have all been, up to this point, synonymous with dental membership plan. The terms have all been used interchangeably and put under the “membership plan” umbrella. But are they all the same? If not, how are they different? This is one of my favorite topics and it really has not been defined as well as it should be. How do I know this? In my thousands of conversations with dentists all over the country, they continue to use these terms interchangeably, and the value of a true membership plan is still a little murky.

There is distinction withs the dental membership plans of today. A 2021 dental membership plan should have these qualities.

  • The relationship should be directly between the provider and patient.
  • The plan should create cash flow for the practice.
  • The plan should always save patients money.
  • The plan should auto-renew.

If an in-house plan is not doing all these things, it is not a membership plan for 2021. Let’s define each type of plan and discuss the pros, cons, and where they can be improved.

Discount plan

A discount plan is when the patient pays a one-time fee directly to the provider to have access to a reduced fee schedule for 12 months. Typically, the one-time fee is between $30 and $60 per person and the discounts vary depending on the procedure. In theory, patients will save money over the course of 12 months if they come in for routine care or have any treatment done. It could look something like figure 1.

A bigger incentive for patients to join is if they need treatment. This is also typically the biggest motivating factor for the practice, which wants to increase case acceptance, to offer a discount the plan. If a patient needs a crown or a couple of fillings, they’re much more likely to accept treatment knowing there is a discount. There is generally not a flat percentage off treatment across the board; it is a set fee schedule. Fillings might be 15% off while crowns may be reduced by 10%.

Discount plan pros

  • The practice has something to offer patients to help retain them.
  • Patients save money.
  • Patients are incentivized to come in for a second cleaning and/or accept treatment because their return on investment is bigger, as in, they save more money.

Discount plan cons

  • There is still a level of financial uncertainty for patients each time they come in for an appointment. (Remember, the typical patient does not know what they’re due for or how much they should be paying for each service.)
  • Patients are paying for things a la carte, so each visit costs them money.
  • This structure still does not eliminate the conversations “You’re due for a pano today,” or “We really recommend fluoride.” Everything is still a conversation and patients hear the cash register ding every time you suggest something.
  • The business is making the patient happy by reducing fees, but what is it doing for the business side of the practice?
  • The team must rely on someone to accurately track who is on the plan, which payments are current, who is up for renewal, when a patient needs to pay, and more. This is one more thing for the busy team to track.

Savings plan

A savings plan could mean any number of things, but for this purpose it will be defined as an annual plan that does not auto-renew. This is where a patient pays a one-time fee that covers all preventive care for the year and affords the patient discounts on restorative treatment. The fee is typically between $250 and $400 per adult for the year. The renewal process is manual, and there is no set renewal date. Instead, practices wait until the patient returns for an appointment after the plan has expired and renews it at that appointment. This is commonly referred to as a membership plan, but this structure has major missed opportunities for the practice.

Savings plan pros

  • The practice has something to offer patients to retain them.
  • Patients save money if they return for their second cleaning.
  • This plan usually works well for an individual or couple.

Savings plan cons

  • Patients pay more when they sign up than if they paid out-of-pocket for the services. It’s more enticing to join a plan that costs less than if they paid their bill for the day.
  • This structure relies heavily on the office administrator to renew patients when they return for an appointment after the plan expires. Many things can happen (staff turnover, vacations, busy with other patients) and free appointments are often given away.
  • The one-time fee of an annual plan can be cost prohibitive for families. They may accept it for one year, but then decline at renewal because they must allocate those funds elsewhere.
  • Each day that passes after a plan expires is a missed revenue opportunity for the practice.

Dental membership plans of 2021

There has never been a greater need or desire to create insurance alternatives for patients. Dentists and patients alike are often frustrated and disappointed with the commercial options available and dealing with insurance companies is no simple task. To add to that, coverage changes frequently.

As we all just witnessed in 2020, life happens, jobs change, family circumstances change, retirement arrives, kids transition off parents’ insurance. Searching for a dental insurance plan is not fun, and it’s comparing apples to oranges. Today more than ever people want transparency and convenience. Welcome to the dental membership plans of 2021! These are impactful for many reasons, but mainly because there are now tools available to make them easy to manage.

2021 pros

  • Simple, transparent pricing that includes all preventive care. Period.
  • Discounts for patients if they need anything additional.
  • The relationship is directly between the patient and provider.
  • Administrative tools are available, such as dental membership software, so patients can enroll and everything else is automatic. They can set it and forget it.
  • Plans auto-renew so patients are always active unless they terminate the plan.
  • Plans no longer rely on one person to manage manual tracking and renewals.
  • The membership revenue creates predictable cash flow for the practice that is independent of any third party.

2021 cons

I’m still struggling to find a con with the 2021 plans. Who wouldn’t want a patient base full of loyal, happy, treatment-accepting patients who show up for their appointments?

Dental membership plans that are done well create the biggest win-win scenario for patients and providers. When a patient joins your plan, they are opting into their oral health care. They show up to their appointments. They’re more receptive to your recommended treatment. They have peace of mind at their appointments that they won’t have sticker shock at checkout. Regardless of what patients may tell you, financial uncertainty is the biggest reason people don’t visit the dentist. With a membership plan, there are no surprises.

For providers, your professional opinions are not overruled by a third party who has never seen your patient. Your team now has a simple solution for patients when they ask which dental plan to buy. It’s affordable, transparent, simple, an incredible value, and it’s easy for the team to manage.

The future is bright for membership plans

The more dentists can remove cost confusion from the equation and help patients maintain preventive care, the more they can improve the health of all people. Insurance is not going away, but neither is the huge population of uninsured patients who benefit from these plans. Together we can shape the future of dentistry and improve patient satisfaction at every practice across America. Let’s Plan Forward.

This article first appeared in the DE Weekend newsletter. To subscribe, visit dentistryiq.com/subscribe.

As cofounder and CEO of Plan Forward, Megan Lohman leads the company’s go-to market strategy and operations. She is currently focused on strategic partnerships and industry relationships. Leveraging her years of industry experience and knowledge of dental membership plans, Lohman works closely with Plan Forward’s partners, customers, and software developers to inform the product roadmap. Before her career in dental, she was in medical sales, staffing and recruiting, and was the first employee of a sports marketing agency where she had her first taste of entrepreneurship.