How to Create Consistent Revenue from Your In-Office Membership Plan

More than half of all Americans do not have dental insurance, according to the CDC (Centers for Disease Control and Prevention). Many agree that dental insurance in America needs a complete overhaul. One way dentists can fill the gap, grow and make revenue consistent —  while helping underserved populations — is by implementing an In-Office Membership Plan. 

Whether you have had a membership plan for years or you are just beginning to create one, some key concepts are necessary to make your plan both successful and profitable. You want to help your patients while also building a fiscally healthy business, and In-Office Membership Plans can help you accomplish both goals.

In-Office membership programs help practices deliver alternatives to their uninsured and underserved patients. It will help to generate predictable recurring revenue that can boost cash flow and lead to increased case acceptance. 

Plan Profitability

We regularly see dentists whose in-office membership plan fails to become profitable. One obstacle to a profitable membership plan is ignoring the numbers. You may not get excited when reviewing numbers the way we do, but taking the time to review costs is essential. Evaluate administrative, production, technology, and marketing costs before you set a price. Whether you choose to add profit to the plan’s pricing or take all of your profit from treatments, a little number crunching will help you achieve optimal results. The last thing we want you to do is undercharge for your preventative treatment, as that will hurt your dental practice’s cash flow.

The importance of systems

Many practices manage a membership plan manually, but this is a lot more challenging than you might expect. When you rely on a team member to manage your entire program, this creates bottlenecks and burdens for your team. Bottlenecks tend to eliminate the consistency that an In-Office Membership Plan can help secure. If managing your membership plan becomes confusing or difficult, your team will lose interest in presenting it to your patients.

Additionally, if you are relying on only one person in your office to manage your membership plans, what happens if they aren’t there or they leave the practice? The system fails. Systems that automate payments and track patients are extremely helpful to scale this type of program in your practice.

Presenting to patients

Much like case acceptance, how you present your membership plan is crucial to creating consistent revenue for your practice. Many dental practices print flyers and posters but never mention a word about the program to patients when they visit their dentist’s office.  While flyers and posters are great tools, it is extremely important to educate patients about the benefits of your membership plan by talking with them about it. Patients rarely initiate that conversation on their own. Flyers and videos should be used to support the conversation, but don’t expect patients to necessarily take the initiative. Finding ways to incentivize your team will help your membership plans grow and be successful.

Use the either/or technique to help highlight the benefits of your in-office membership plan. Here is an example of that conversation, “Okay, Sarah, you need a new crown. Since you don’t have insurance, that will cost you $1,000 or if you sign up for our in-office membership plan today, it will only cost you $800. The annual membership is $300 per year or $25/month. Your annual cleaning is free and you get 20% off any dental work. If you choose to sign up today, I will throw in your fluoride treatment for free.” Patients will appreciate the options and will likely display interest or express new interest in your In-house plans. 

Increasing loyalty

Dental insurance often doesn’t cover some services, so offering patients a plan that applies to their needs is helpful and less restrictive. 

Patients belonging to your membership plan are more likely to spend money with you for their dental care. They accept treatment plans and return for regular prophy and routine maintenance exams more regularly. Patients who are members are also less likely to cancel appointments. 

Discount Mentality

Some dentists say patients are not loyal like they once were. They go from dentist to dentist chasing discounts. The psychology behind wanting a discount can increase case acceptance. When patients buy a membership, they feel connected in the practice and are more likely to accept treatment. 

Recurring revenue safeguards financial security

Recurring revenue contributes to a financially secure dental practice, which is essential to safeguarding against fluctuations. In-house membership plans play a crucial role in creating consistent monthly and annual revenue streams. Stable revenue also increases your practice’s value, should you ever want to sell it.

How to create a successful in-house savings plan

Membership plans fail a lot. Here are some quick tips to help you successfully start or grow a program so your plan succeeds:

Service Menu

Create a menu of services for your patients, empowering them to select a plan that meets their needs. Not every plan meets every patient’s needs. With more options comes more opportunities for more patients to enroll in your membership plan.

Use Software Tools

Tracking each member’s benefits and plan revenue can be a nightmare for the administrative team. Implementing software takes the bottleneck out of managing your plan. The right software will streamline the sign-up process, automatically tracking benefits, automating payments, rewarding members, automatically assessing revenue, and supporting your team with incentive programs. 

Keep your plans simple— Make your menu straightforward and intuitive to use. Many practices overcomplicate the process, making it hard to sustain. Dental insurance is already complicated, so don’t make the mistake of following their failed pattern. You don’t have the same tools or team members to overcome complexity. Remember that less is more.

Automate renewals—Ideally, sell your program once and have your patients pay monthly. This keeps the shock of a large payment coming their way. Annual payments tend to have a much higher drop-out rate because they feel their benefits have finished for the year and they don’t want to pay so much for the upcoming year. Studies show that plan retention improves when your patients are on a monthly payment cycle. This approach streamlines your process so you can focus on caring for your patients and bringing in new ones.

Create a patient agreement— It is good business to implement a patient agreement. Many states require it, but it is best practice and protects you and your patients.

Get your whole office on board—Your team must support the program. Implementing an incentive program around your membership plan may help. Educating your team on the plan’s benefits to patients and how to present the program to patients are the most powerful ways to get the support necessary from your team. Otherwise, your program will fail.

Conclusion 

A well-executed In-Office Dental Membership Plan can not only help your patients without insurance but bring in consistent revenue to your practice. Take a look at the numbers, create a plan, tell your patients about it, get your team on board, and use software to make it easy on yourself and your team. 

Got questions? email us at [email protected]. 

Resources:

https://www.dentaleconomics.com/practice/article/16385144/the-rise-of-inhouse-dental-plans

https://www.dentistryiq.com/practice-management/financial/article/16367474/how-to-generate-more-than-100000-per-year-from-a-dental-membership-program

https://www.cdc.gov/nchs/products/databriefs/db336.htm

https://www.cdc.gov/nchs/products/databriefs/db336.htm

https://www.dentalmenu.com/

About DrillDown Solution 

At Drilldown Solution, we are your one-stop-shop for all financial management and business consulting for your dental practice. When you partner with Drilldown Solution, you gain access to exceptional accountants and CPAs who can give you expert guidance and advice on all tax planning and tax preparation issues.

We know how to devise a tax strategy aimed at reducing liabilities and maximizing profits for your dental practice. Our team of tax experts will analyze your full financial picture and design a personalized tax plan to preserve your income.

Drilldown Solution offers a full suite of financial services that include bookkeeping, accounting, tax preparation, and dental consulting. We have the expert team to help any dental practice thrive, even under the current COVID-19 pandemic circumstances. We accomplish this with a three-part system comprised of patient-experience excellence, financial focused operations, and accountability.

Our goal at Drilldown Solution is to put your dental practice in the best financial position possible, utilizing proactive processes and personal care!