Not so long ago, dental practices enjoyed long-term, loyal relationships with patients from their community. Today, dentists see more new patients every year. A significant portion of new patients can be attributed to changing insurance plans, networks, and providers. This is dramatically changing the patient-doctor relationship.
INCREASING COSTS, DECREASING COVERAGE, AND CHANGING PLANS
For practices that accept insurance assignments, it’s obvious something is happening in the medical and dental insurance industries. Overall insurance costs are skyrocketing, and employers are looking for ways to save money. This directly affects dental insurance, which typically is a component of a comprehensive healthcare insurance plan benefit.
One way employers are trying to cut rising insurance costs is by changing carriers or plans. Typically, dental insurance plans change in January. Patients are put on new lists and have to go to new doctors to remain within their network. Therefore, dentists are seeing more and more new patients, and losing existing patients who must go to another dentist to maximize their insurance coverage. And, even if the patient remains on the same insurance plan, often the amount and types of treatment insurance will cover is changed or limited, leaving patients responsible for a larger portion of the treatment fees.
In the 1980s, when managed care was introduced to general medicine and dentistry, indemnity plans set their maximums at approximately $1,000 for dental treatment. This was appropriate when a crown cost only $250. Most patients could receive treatment without being too concerned about exceeding the maximum. Now, crowns cost between $700 and $800. If a patient needs a root canal and a crown on one tooth, more than likely he or she will exceed the insurance maximum. Any other treatment that needs to be done will be at the patient’s direct expense. Even PPO and HMO plans are requiring patients to subsidize more of the cost than in past years.
NEW PATIENTS, NEW PATIENT NEEDS, AND NEW FINANCIAL POLICIES
When you are trying to evaluate how the changing insurance environment and increasing patient out-of-pocket expenses will affect the relationship a practice has with its patients, you need to consider the demand for dentistry and the distribution of disposable income. Certainly, if someone has a medical condition that requires him or her to pay for part or most of treatment, or costs for necessary pharmaceuticals increase, disposable income will be directed to these needs before dental needs are considered. Dental needs will be placed on the back burner. People will be more likely to live with a broken tooth longer in order to be able to afford their prescriptions.
Also, when you’re discussing the distribution of disposable income, it’s not just medical care being considered, but everything else the patient wants or needs, such as food, clothing, and other important expenses. For dental care, and especially larger cosmetic procedures, the interest may be there, but it’s just a question of people being able to afford it. For the lower-cost preventive and cosmetic procedures, the demand will most likely remain constant. This can be attributed to the exceptional inroads we have gained through prevention education, the aging baby boomers, and their children. Today’s focus on appearance will keep procedures such as bleaching, specifically 1-hour whitening, popular. It’s the bigger cases where demand will be a function of the patient’s discretionary income and the economy.
THE CHANGING FINANCIAL RELATIONSHIP
The changing patient-doctor relationship in dentistry is affecting a practice’s ability to continue to offer billing as a financing solution. This means that when you provide dental services, especially on newer patients, it’s more important to get paid up front because you have no established payment history with the patients. Billing them is much too risky, and your investment is too high, because you can no longer be comfortable with how long you will retain that patient (as much as we dental professionals argue that it shouldn’t be like that). Today, because of the changing insurance environment and economy, it is like that.
Unfortunately, even as we know that practice billing and accounts receivable are too risky, more and more patients need our help financing treatment. Many doctors think only patients with high treatment fees need a financial solution to help them afford the procedure. But what’s really happening in the market with the increasing out-of-pocket expense is that patients need help affording $500 and $1,000 treatment plans, which are a lot more common in the dental office. Generally, the patient is not questioning whether or not he or she wants the treatment, but how to fit it into a budget. It’s rarely the treatment fee itself, but rather how to pay for it.
This is where a third-party payment program can help, by showing patients how easy it is financially to get the treatment they need and want, especially with no-interest plans with low monthly payments. This will go a long way in motivating patients to accept treatment. Doctors need to understand that by using a third-party financing company, they are not offering patients a payment plan. Instead, they are giving them a financial option so they can accept the doctor’s treatment recommendations.
There is no question that the economy is not the same as it was 2 years ago. Carrying large accounts receivable now is really too risky, because when a patient gets a bill from the dental office it goes to the bottom of the pile with the rest of the bills. There’s not much urgency in making regular, on-time payments because the dentistry is done. In this environment, dentists need to be more protective of their practices. They must be firm with their payment policy, and look to having an outsourced company handle the headache of billing and collecting from patients. This way, the patients win because they get the treatment they need. And, because third-party financing companies provide payment within days, the practice wins because it receives its fees up front.
With all the trends indicating an increasing patient out-of-pocket expense, the practice’s job is quite simple. Develop the most appropriate treatment plan for all patients. Then help patients accept treatment by providing them with a financial solution—an easy and convenient way to pay.