Participation with insurance IS a marketing medium. In fact, that's all it is. It's all about acquiring patients, right? Therefore, it's marketing.
We are not proponents for or against participation – we simply look at participation and the associated costs the same way we look at all available marketing mediums.
Most insurance transitions are really a matter of financial re-allocation. Run a write-off report from your practice management software. If the total write-offs are greater than 5% of your revenues – it's probably time to start a transition.
You can effectively market your practice for 5% of revenues, why would you pay an insurance company more?
The painful part of transitioning away from insurance participation as a primary means of new patient acquisition is budgeting. If you are participating you are writing off some or all of your fees. This costs you revenue. But to start the transition, you'll need to go into your pocket (probably about 5% of revenues) to start the process.
If you learn anything at all by reading this, learn not to wait. Don't wait until the insurance write-offs become 12% - 15% - 22% of your revenues. It will be more painful to make the transition at those points in your practice's life.
Here are some general truths or guidelines while managing an insurance transition.
1. You start from the least to the most (never reverse).
You invest in marketing your practice initially to replace the new patients that are currently being generated by the insurance company that is providing the least amount of new patients to your practice. For instance, as a monthly average, let's say a practice receives 5 new patients from Prudential, 8 new patients from Guardian, and 12 new patients from Delta. Your near term objective is to market your practice to replace 5 new patients. Once you have reached this momentum point you can drop Prudential. Then, when your momentum hits 8 new patients a month through marketing, you can drop Guardian. And so on.
2. Insurance transitions take time.
Many dentists want to make a clean break or go “cold turkey.” This would NOT be our recommendation. This adds significant downside risk where, with time, there is no justifiable reason to assume the risk. Remember our number one objective with a client is to minimize risk. So don't be impatient. Time, consistency, and volume are keys here. Most insurance transitions take 24 to 36 months.
3. Insurance transitions lead to greater profitability in the same time and within the same capacity.
Take the same practice, the same number of treatment rooms, the same patient volume, and the same hours of operation as an example. Once the transition is complete, you should end up taking home at least another 10% of gross revenues. In a practice that is grossing 700k a year, that's another 70k in personal income – not a bad raise!