154: Setting Up Your Membership Plan for Success, Not Theft

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Hello everyone and welcome to DEO Webinar. Setting up your membership plan for success, not theft. And we've got two great guests here. Dr. Brett Wells, founder of Dental HQ. He runs a successful group dental practice in Raleigh, North Carolina, and the founder and chief dental officer of Dental HQ, the leading dental membership plan platform. He has leveraged his entrepreneurial passion to develop systems to create a better patient experience and optimize office operations, achieving two and a half times practice revenue growth over the past three years. We also have David Harris, Founder CEO of Prosperdent. And David is the Chief Executive Officer of Prosperdent, the world's largest firm investigating financial crimes committed against dentists. David is a licensed private investigator, a forensic certified public accountant, and a certified fraud examiner. David, you actually make CPA sound kind of cool. You know, it's just almost there. So anyway, so thank you so much for being on tonight and getting us educated. We're also going to turn this into a DSO Secrets podcast. So for those listening there, they can come watch it over on the Facebook page or those who are watching it can listen to it or share it later on the podcast. But with that, I'm going to turn the time over to you, Dr. Wells, and let you all take it from here.

Well, thanks so much, Emmett. You know, first, I'm honored to be on here. You know, you're a great mentor of mine and you do so awesome stuff. So to get to share some screen time with you is very exciting for me. And then, you know, David Harris, I've known for a number of years, I've worked with this company. Just a little bit of background about how we got here and how we came up with this topic. You know, when I used prosperident for my own dso, I have a five location group practice in Raleigh, North Carolina, and we're always looking for things to tighten up our systems and one area was the financial realm of our practice. You Know, I think we as Dennis know that embezzlement and theft is kind of a thing way more prevalent than we realized. And so I reached out to prosperitant to do a full kind of audit and evaluation of our practice to see our systems were. And one of the first things they asked me was hey, do you guys run a membership plan? Which kind of piqued my interest as some DSO owner who also owns a technology company called Dental HQ that that helps dentists create membership plans. So as we got to speaking and talking, I learned that membership plans are a great entry point for a lot of theft to occur in dental offices. And so, you know, a month or two back when Hilda had approached me about doing a webinar for the DEO and potentially DSO secrets, I kind of put one or two together and said hey, why don't I investigate this and see what the issue is and create a new kind of webinar that nobody's ever talked about before, which is how to really set up your membership plan and the accounting principles properly to help avoid theft and to just make the things run a lot better. So we spent probably two hours with David's team through four different calls figuring out where the, where the points were, where the entry points were for embezzlement and coming up with a series of five best practices to set up your plan properly and to help avoid that. So that's how we came up with this topic and I just wanted to kind of set the groundwork there.

If I can throw in one thing too that I forgot administratively. If you all have questions along the way, feel free to put those in the Q and A or in the chat and then I'll pipe in occasionally and ask those questions.

Perfect. So again, my name is Brett Wells. I'm a dentist by trade, I'm an entrepreneur by passion. I have a five location DSO or emerging dso, whatever you call them. Emmett would know better than I in Raleigh, North Carolina. I'm a member of the deo. Very proud member of the deo. I love the deo. I have a lot of friends in the group. And then I'm also, you know, I'm a problem solver. I'm a creative problem solver. So many years ago I launched General hq, which is an advanced software platform that helps dentists set up and automate their in house membership plan. I'm a father, a family. I've got two young kids are downstairs right now. We're in Wrightsville Beach, North Carolina. And you know, passion of mine is cooking and Traveling. So if any of you guys are big cooks, I got some awesome recipes to share. Particularly I've got a great banana pancake recipe if you're ever looking for, for that kind of stuff. So I love to cook, love to build businesses, and that's kind of how we got here. So today we're going to talk about three topics. First, we're going to do a quick refresher on what a membership plan is. I know this group is very familiar about membership plans, so this whole webinar isn't just about membership plans. It's a much different spin on it. But I am going to spend the first few minutes just kind of refreshing everybody about where they came from, what they are and kind of the power behind them. Then I'm going to punt it over to David. He's going to talk a bit about embezzlement, how prevalent it is in our profession, some entry points for that and some things you can do to kind of protect yourself. And then we're going to blend the two topics together into five best practices for setting up your membership plan. Very specific best practices. This is not a fluff webinar. We're going to talk about really specific things you can take back to your business. What is it? Thursday. So tomorrow to implement into your practices. So, you know, I would say progress in any, in any industry always starts with a problem, right? So if there's not a problem, there's nothing to solve. There's nobody thinking through it. So in dentistry, we've got lots of problems. We've got. One of the biggest problems that we hear every day and you know, some complain about it, a lot complain about it, some deal with it and don't, is dental insurance. So dental insurance over the years. Oh, well, we got a visitor. Has become a bigger and bigger problem. Sorry. As I said, the families downstairs, I don't think they all realize that we're up here, given this webinar. But so dental insurance is a problem. Over the years, you know, reimbursement rates are either static or they are decreasing. The time to get the money back is becoming a bigger and bigger problem. More and more of a caustic relationship between the insurance companies and the providers. So it's just become a big problem. Another issue is access to care. So sorry about that, guys. Got, got three families at the beach house for the week and kind of had some overlap of the, of the, of the webinar with that. But so we've got. Insurance is a big problem. We've got access to Care is a big problem. 10,000 baby boomers every single day are retiring and then you got more and more people joining the gig economy. So more and more people are losing dental insurance every day. And I'm not sure if you guys are aware, but only about one in five consumers who don't have dental insurance are going to the dentist, whereas about 6 in 10 who do have it. So there's a big differentiation there between people with insurance and people without insurance. And the number one reason cited is cost. So cost is a large barrier for people to get dental insurance. And so that's a big problem that we wanted to solve as a profession. What if we could solve it? What if there was a solution out there to increase patient care, increase case acceptance, get you some streamlined recurring revenue and increase patient retention? Well, as many of you know, the problem has been solved by dentists over the past probably 10 or 15 years through these membership plans. And for those of you who don't know what a membership plan is, I'm sure most of you do. But typically it is a package of your preventative care sold either on a monthly or annual basis. It's going to include your cleans, exams, X rays, and typically maybe a 10 or 20% discount on your non included services like crowns, fillings, etc. So these have become more and more popular. They're sold either on an annualized basis, three, $400 a year, or maybe 20, $30 a month. But patients love them. Especially obviously your uninsured patients. It reduces that cost barrier to entry to your practice. So what are you going to see with a membership plan with your members? Well, typically, you know, I know we all like to think, oh, we do a great job with our reappointment rates. We're getting our patients back in the chair. You know, we don't have a problem getting our pat. Well, we do. You know, it's a much bigger problem than you realize. A patient cancels, they don't schedule back or you don't have them on that recurring recall basis. On average, the typical recall frequency at a dentist's office in the United States is nine months. It's not six months like most of us think it is. If you do the calculations, we've come up with some great formulas that measure this really easily. It's closer to nine months and that's if you're doing pretty good job. Some offices it's closer to 12 or 14 months. So what we find with your members, they're paying for this service out of their pocket. So they're coming in every six months on average, are much closer to every six months. And even if they don't come in, they're paying to come in every six months. So you've got the cash flow regardless. You're now that insurance carrier, essentially, although it's not really an insurance plan. So the cash flow is coming to you and not a third party. We've also measured case acceptance, so case acceptance for members is typically about 2 and a half x what a non member is. So you're going to, you're going to see your patients more regularly, they're going to spend more money in your practice and they're going to stay in your practice. I can tell you, as you guys know, attrition in dentistry is an absolute epidemic. You know, some studies have it at 25 to 30%. I think we all agree 15 to 20% is probably at least average. And a lot of practices do run closer to 25%. Well, on our platform, across the thousands of offices that we have using dental HQ, we have only around a 10% cancellation rate on an annualized basis with our membership plan. So you've got 10% of your, of your members who are cash paying patients and that attrition rates even lower than your insured patients. So there's nothing stickier in a dental practice, in a membership plan. So they're going to stay in your practice, they're going to spend more money and they're going to come more often. So a lot of benefits to a membership plan. I know that people on this webinar, I'm sure are very familiar with membership plans. It's not the bulk of what we're talking about today, but I at least wanted to set the table for what it is so we can talk more about best practices in a little bit. Things seem to have quieted down, so no more kids running, toddlers running up here. So I think we're good now. But I wanted to punt the ball over to David to talk a bit about embezzlement and then we'll tie the two together.

Absolutely. And Brent, one other thing I think that should be captured there too. You talk about the participation rate with people already in the practice. The other part that shouldn't be lost about membership plans is it draws people in, off the street. In other words, you're starting from a bigger patient base and then you're able to keep them. And I know that every dentist in the audience knows that the way that people get into your chair is through the hygiene chair. That's the entry point to restorative treatment. So making hygiene included in the plan is really a great way to get to examine more patients and find more work. And if you're talking about a dso, that can be a lot of patients.

Oh, absolutely.

So to me, that's the other part of the statistic. How many new patients can we get from this? I mean, you talked about increasing the participation rate of your existing patients, and that certainly is going to make a plan worthwhile all by itself. But to me, the other part is, can we increase the participation rate in dentistry of people who otherwise would not be coming in at all? And I think the evidence shows that you can. Hi, I should introduce myself. I'm David Harris. For the last 33 years, I've been investigating embezzlement in solo practices, group practices and DSOs. And I was thrilled that Brent asked me to do this with him. He's somebody I think of as a friend and a very enlightened man. And it's just been a pleasure to work with him and to resolve some of the issues around these membership plans. Let's start by defining the problem. The first question is, how likely is embezzlement? Is this something that affects the minority of practices, the majority, or what? I'm going to give you some across the board dental numbers first, and then we'll try to refine them to DSOs. Probably the most definitive study on this was done in 2019 by the American Dental Association. And what they did was they asked 17,000 dentists, so across all types of practices, have you been embezzled? And the good news is up there already, 53% of them said, as far as I know, I haven't been. Obviously, this question doesn't lend itself to definitive answers. In a lot of cases, people are kind of giving their best guess, so you know what's coming. The other 47% said, yes, I've been stolen from. But now what the ADA did was they asked that 47%. An interesting question. How many times? And 26% said, as far as I know, once you had 11% who said twice. 2% were the triple dippers. And the one that really astounds me, 8% of the respondents said, I've been stolen from four or more times. So if you just do a little histogram exercise and you take 26% times 1 and 11% times 2, and 2% times 3 and 8% times less, let's assume just 4. What you get is 86 embezzlements per 100 dents. That have already happened. Now, some things we don't know. We don't know how many of the 53% were actually embezzled and either didn't realize it or chose not to disclose it. We don't know how many of the 47% gave a number. And it was actually low because again, there was undiscovered embezzlement. We also don't know how many of this group will be embezzled from either for the first time or again in the rest of their careers. There's one more statistic that I want to give you that's a little bit chilling. That survey was done in 2019, 12 years earlier, in 2007, the ADA did a similar survey. In 2007, the percent of dentists who said they had been stolen from was 35%. So look what happened. Over a 12 year period, the reported prevalence of embezzlement went up by about a third. That's kind of a big deal. A few other numbers I'm going to give you. The first one is that the average embezzlement in a dental practice goes on undetected for almost two years. The second thing is that most thieves use multiple methods. In other words, we see very few one trick ponies. Almost everybody who's stealing is using different ways to steal at the same time. And I think really what they're trying to do is avoid detection. You know, it's kind of like everybody knows not to take all their money in their 401k and put it into Apple stock. You spread it around and the final number is that the average amount that a thief steals to the point where they get caught is $109,000. You know, some, some practice owners kind of characterize embezzlement as a minor irritant. You know, it's theft of toilet paper from the staff restroom or something like that. And, but we also see, and we just wrapped up a case recently and we see probably one a year where the theft is more than a million dollars. Yeah. So let me let you in on one of the secrets of the universe. And the secret is how an embezzler approaches their problem. And I think we all understand this. You all have practice management software. At the end of each day, the practice management software talks about how much money you collected today. And that amount should equate to the amount of money that goes into the bank for that practice. So the first question that a thief asks is if I'm the office manager in this office, is anybody looking over my shoulder when I do that balancing. And if the answer is no, which is the case in a lot of solo practices, most DSOs are a lot better at this part. If the answer is no, then it's easy. I can just steal from the deposit. I don't need to do anything exotic in practice management software to cover it. So if the collections in this practice today are $22,800 and I can only do, if I can get away with depositing only $21,600, then I got $1,200 for myself, and I don't need to do anything crazy in practice management software to cover it. The thing about unsupervised balancing is the dumbest, laziest thief on the planet can pull that one off. Some practices do what I'd refer to as incomplete supervision. So when you think about how money gets to your practice, it comes to you in a bunch of forms. There's cash, there are checks, credit card payments, what are called ACH deposit. ACH means automated clearinghouse. So that's when somebody like an insurance company puts money directly into your bank account. And what the challenge was, some of those amounts is that they come in at different times than when your practice management software records them. So if you think of a patient coming into one of your practices today and paying by credit card, the practice management software records that as a payment today. And yet the money probably won't hit your bank. As Brett pointed out, today is Thursday. The money probably won't hit your bank till Monday. There's a little timing difference, and that's enough to mess up the balancing activities of some organizations. So there are some practice structures that look at the things they can see, which are typically cash and checks, but the invisible deposits get ignored. If I'm a thief in that case, what I'm going to do probably is mischaracterize the deposit. In other words, a patient will come in and pay by check. I'll steal the check. What I'll record in practice management software is credit card payments. So just like in the unsupervised balancing situation, I'm going to have an out of balance situation, but I'm pushing it from what my overseer looks at to what they don't. The third situation, and this is the one that applies probably most to DSOs, is you have effective monitoring of what happens at the day end compared to the bank deposit. Can I steal in that case? Absolutely I can. But now what I need to do is a little bit different. I need to make the practice management software Lie about how much money came in. And, you know, it's tempting to look at Open Dental or Dentrix or Eaglesoft or whatever and say, well, they're, you know, they're sophisticated pieces of software made by pretty big companies, and therefore it should be hard to fool them. It's not. I'm not going to go into details here because of time, first of all, and secondly, I'm a little reluctant to put a Do it yourself guide to an embezzler in the public domain. But if you're a. If you're a DSO owner and you have questions about this, feel free to contact me privately and we can have that conversation. So if, if balancing is supervised, which again, is probably most of your practices, although I will say we do a lot of DSO work and we, we see a fair number of flaws in how the oversight process for this happens, then I need to make the software understate how much money came in. Let's ask ourselves a basic question. And that basic question is, why do people steal? Well, the obvious answer is because they can. But let's go a layer deeper. And when you look at embezzlement, there are kind of three preconditions that have to be there before stealing happens. The first is opportunity. And that kind of goes back to what I was talking about on the last slide. You know, people need an ability. They need to figure out how to make practice management software lie. It's not hard. The second ingredient is pressure. So people who steal are under some kind of pressure. Sometimes it's financial. It's maybe their spouse lost his job, they're two months behind in their mortgage, they're about to lose their house, and they're stealing just to kind of defend the basic necessities of life. At other times, it's emotional pressure. They watch their friends who own businesses moving ahead a lot faster than they are, and that bothers them. But it's typically one of those two things. And the third leg of the triangle, and this is the one where I think DSOs really need to understand the issue. The third leg of the triangle is called rationalization. And what rationalization involves is a temporary suspension of reality. So we all learned at 3 years old on the playground that you don't steal other people's stuff. What people need to do to steal is they need to be able to say to themselves, okay, I understand that in general, it's wrong to steal, but it's okay in this case because. And whatever comes out of their mouth after the word because is the rationalization. You know, if we're talking about a solo practice, they overestimate how much the doctor makes, and they figure out that they decide that she won't miss the $3,000 a month that I'm stealing, or my value to the practice is far more than what I'm being paid, and I'm really stealing what I deserve to be paid. You know, those are examples of rationalization. One thing about rationalization that we know is that as the size of the organization goes up and as management gets more and more remote from the people doing the work, rationalization becomes easier. In other words, if you're working in a solo practice and you work 30ft away from the person who signs your paycheck every two weeks, it's a lot harder to rationalize in that case than when you're dealing with 100 practice DSO and you've never met the CEO. So as size goes up, rationalization gets easier. That's the relevance to DSOs. So let's talk about membership plans and why they create an opportunity. And then Brett's got some great ideas about how to solve it. The problem with membership plans from a dental practice accounting standpoint is very simple. Your practice management software is really set up to do one thing. It's set up to track fees, and then to track payments for those fees. And when you set up a membership plan now, you create these kind of anomalous situations. First of all, you have money coming in, monthly or annual payments that aren't associated with any specific dental treatment. And while that's going on, you're then giving away, I'll call them free. I mean, I know they're really paid for through the membership, but you're giving away what I'll think of as free preventative appointments. And you're also creating discounts for restorative services that are done. So you take a kind of nice, neat accounting system called practice management software, and then you do something with it that, frankly, the people who designed it never conceptualized, that's what creates the opportunity. We're really creating this very anomalous flow of money relative to what the. What the software thinks. So when Brett and his team and my team started talking about how to tighten it up so that this doesn't happen, really what we're trying to do is address this anomalous money flow that happens when you get into a membership plan. And with that, Brett, I should let you tell us what to do about this. Sure.

So I know this is an important topic because, like I mentioned earlier, my team met with dav, his team on probably four different occasions over two or three hours to talk through all of this. And I realized that myself, who founded a dental membership plan software company, didn't even have my practice management software set up nearly correctly to run and operate this thing. So it allowed me to do a deep dive and see how I was operating incorrectly. So I know if I'm operating incorrectly. Almost certainly most dentists out there are doing it wrong through their PMS system. The other thing I want to mention before I get into this, you're going to see screenshots from open dental. I use open dental. I'm sure anything we talk about is going to be just as accessible and easy to do through Dentrix or Eaglesoft or whichever PMS that you use. I'm just very familiar with open dental and so I could easily get screenshots. So don't think it's just an open dental thing. It works anywhere. But best practice number one, and this was super awesome to learn about as I was diving into this is, is to set up an actual membership plan or discount plan fee schedule right in your pms. So it should have its own fee schedule with included services. Your cleans, exams and X rays set to $0 and you're not included services set to whatever the discount amount is. If your crown is 15% off and you charge normally 1000, your fee schedule should show $850 and that should track through all of your fees. So you want to set up the fee schedule and then you want to add a discount plan into your pms. Dental has a great webinar on how to do this. If you look on their on their site. Feel free to email me Brett dentalhq.com if you want to know what that webinar link is. I'm sure Dentrix and all the others have have webinars and whatnot to teach you how to set these up in the pms. But set up the fee schedule and set up the discount plan in your pms. And the beauty is your treatment plans are now going to come out beautifully. It's going to show your full cost, what they're getting their discount and then they're out of pocket. It's going to, it's going to remove virtually all of the manual adjustments that can get you into really hot water with embezzlement because it's all going to be automated within your, within your PMS system without your people having to go in and put in these manual adjustments. The way we were doing it before we had patients labeled as members and they would come in, they would get a profit done for, you know, $100 UCR and they get $100 adjustment for every one of these fees. So it created a ton of these manual adjustments. By doing this, you don't have to do that ever again. So it really eliminates the manual adjustments. So that's best practice number one. Did I miss anything, David?

No. Let's, let's understand that adjustments are potentially one of the holes in your practice through which an embezzler could drive a truck. And the more adjustments you have especially big, like 100% adjustments, the more potential there is for somebody to steal. So what, what Brett is suggesting just instantly cuts down the number of adjustments you're going to have for, for members by, by a massive amount. But he's not really done yet because there's one more, there's one more piece to that puzzle.

Was that too, was that best practice number two or. Yeah, I think it is, yeah. Best practice number two. And if I missed it, I know we talked earlier about one other thing, but if I missed it, let me know. But best practice number two is making sure you properly assign your members into that discount plan and having a system for going through and adding them and taking them off of that connection. So what we recommend is once a month either if you run it in house, maybe checking your spreadsheets to make sure everybody's up to date and seeing who's added and who's, who's canceled their membership and going into your PMS system and either adding them or deleting them from this connection or from this, linkage that to that discount plan. And I also recommend doing it when you do your three day call outs to reminder appointments. So then reverifying it with Dental hq. It's easy. You hop on Dental hq, you type their name in, it says if they're active or not. If they're active, they're good. If it says they're not active, then you need to delete them from this. And that prevents you from giving away free discounts for people who aren't members and defeating the whole purpose of doing this. So, you know, having a good system in place on a checklist, we run our business based off a lot of checklists. On that checklist should be a monthly check of members, membership status and alteration of your PMS system to make sure everything's properly updated as well as when you're doing those verification calls or reminder calls. That's what we got for best practice number Two. Anything there you wanted to add, David?

No. And embezzlement is of course a staff member stealing. Giving people free dentistry technically is an embezzlement, but it's still money out of your pocket.

Right.

So we don't want that kind of leakage either.

Yeah, and you don't want to, if you forget to label somebody as a member, you don't want to give an opportunity for a team member to go start doing these manually again. So keeping this updated is really, really important and having systems around that is really good. So this one I'm going to let David touch a bit more on after I get going. But you know, obviously is a lot of, a lot of the listeners have membership plans or maybe you're thinking about it. There's two big buckets of ways to do this. You can run them manually through spreadsheets where you're just doing maybe an annual membership and charging them once a year. Or you can use a third party software like Dental HQ that automates the whole process, transacts all the payments, tracks your members, helps out with marketing, all kinds of stuff. But the point of this is don't have revenue coming in from multiple sources. So if you're using a third party system like Dental hq, don't also go around the system and have an in office version where they're paying you cash as an alternative. Or if you're using an in office system, make sure you're properly taking payments just through the system that you have set up. Having two points of entry for payments for this creates some obscurity that can lead to a lot of opening up to embezzlement. I will say this and the hope is with Dental HQ you can turn off the in office payment option. We want to get as a company to a point where we can completely remove it from our software, but we have a lot of offices who still do it. But if you do do an in office payment through Dental hq, the practice owner is going to get an email with that amount as well as you know, it'll show up in the report. So we do everything we can to make you aware of that when it happens. But it is a very kind of easy way for embezzlement to occur and I'll let David expand on that cause he understands the ins and outs that a bit more than I do.

Absolutely. I really don't like people paying cash for a membership plan on a couple of levels. First of all, the administrative nuisance, because then you've got to collect cash every month, whereas if Somebody's paying you by credit card or debit card or auto draft, you know, you can set it up so that it just happens. That's the first issue. But the second thing is you then have people paying cash against no particular service. And to me, that's always a danger zone for embezzlement. If somebody comes into the office and let's say their annual fee for membership plan is $325, and they plunk $325 down in cash, from the perspective of a thief, that's pretty stealable money. It's different when the patient is in for an appointment and you provide service and they pay for it, you've got some ability to track that against cash. But when somebody just comes in and, as I say, drops $325 on the desk, there's no offsetting service being provided at that moment. It'll happen later. I don't like people paying cash for these. So to me, Brett, one of the huge advantages of something like Dental HQ is that you have software, and if somebody's signing into that plan, they have the ability to make everybody pay by credit card, have a third party, kind of keep track of it, notify them when somebody doesn't pay, do all those things, and the risk that you have with a cash payment goes way down.

Thanks for sharing, David. Very, very key point here. Probably one of the most open areas for embezzlement to occur. So probably the next big spot is, as we all know, reconciling those payments. So, you know, Maybe you get 10, 20, $30,000 a month based on how many members you have in membership payments. How do you reconcile that? Well, there's two ways to do it, really. One way is by creating a dummy patient. You can see here, here's a screenshot of how even we used to do it in my practice, which was creating a dummy patient. We called it Dental hq. We would create a billing charge based on what our Dental HQ report said we received that month, and then we create a payment against that to balance the books. It's quick, it's simple. It's one charge in, one charge out. Doesn't take but two seconds, but it is ripe for distortion and creating opportunities for embezzlement, which David can expand on in a second or you can do B. B is the way that David recommends and that we've learned, is best practices for reconciling your books for membership plans. And that is itemized per patient. So you put in that membership payment, you see $30 here, and then you put in the payment against that charge as a payment. So the cool thing is what I learned about open dental and doing this is that open dental has a functionality where you can set up a recurring monthly payment in their system or recurring monthly charge in their system. So you can set this $30 charge to hit every month on a set cadence, and then all you're doing is going in and creating the payment against that every month. And the other cool thing is Dental HQ by the end of the year and not if not in like two to three months, we're going to have automated PMS integrations where we can actually post these charges in our. Post these payments into your accounts. So it'll all be automated. But best practice certainly is to do this on an itemized per patient basis instead of doing that bulk dump into a dummy patient. So anything else to share there, David? Was that clear about that, Emmett?

Yeah, definitely. Brett, A couple of things. First of all, it's so tempting to set up that dummy patient and just make these offsetting entries each month. I mean, there is no checker balance that's happening. When you do that, right, you're simply taking one amount and posting an offsetting debit and credit. And that proves absolutely nothing. Whereas when you post individual accounts, it really forces you to say, okay, I got $7,230 in membership revenue this month and I should be able to find the equal number of patients that equate to that. The second thing is that when you make the monthly postings to the individual patients, it provides a very quick, convenient way for your staff to check whether somebody's in the membership plan or not. All they have to do is look at that patient's ledger and if they saw in the last 30 days that there was a $30 posting, they know they're in. When you, when you use that one dummy patient as your repository for these, then you can't use your practice management software anymore to check whether somebody's in or out. You have to go to some other source like a spreadsheet if it's your, if it's your internal plan or go on to the Dental HQ website. If it's them, it kind of makes one more place you have to look to find the information. Whereas if it, if it is posted each month. And Brett's concept of having this auto posted by Dental HQ is very exciting. I mean, that takes the labor intensive part of having a membership plan and just makes it go away. So, yeah, option B is definitely what I want to do.

Yeah, so Option B, by far best practice, itemize entries per patient for your members. So best practice number five, it's a little bit of a deviation outside of embezzlement, but it's just an accounting question. We get asked a ton at Dental hq and we actually, I think kind of solved it as best possible when speaking with David and his team. And that is, hey, you've got these included services that are $0. How do I pay my providers that are paid on adjusted production? You know, most of them are not going to just be okay with, hey, you know, it's a membership plan. It's included membership. We'll pay you on everything else except for the membership stuff. Most of them are not going to be okay with that answer. And so how do you pay them? Reconcile this against 100% adjustment. Right. So what we came up with is a pretty cool idea or a pretty good game plan for this, a best practice which is to create in your discount plan fee schedule that you've created, you create duplicate codes for your included services. So a D 1110 becomes an M 1110. And you take these included services. Let's say you have annualized a $300 membership plan and that includes your cleanings, exams and X rays. You assign an amount to each of the included services. Maybe the 1110 is $75 times twice a year, that's 150. Maybe your periodics are $50 each. That's 100 of it. So now our 250 and that last $50 goes to buy wings. So you assign those values to these different duplicate codes and then you can easily run a report of your associates with those, with those unique codes. So associate a. How many M11 10s are they running, how many periodics did they do, how many bitewings did they do? And then you know, okay, it was 50M 11 10S. We're assigning $75 to that. So 50 times 75, that's your adjusted production. So we're going to do a lot more in depth kind of ebooks and whatnot on this. But I thought it was a great solution to a complicated problem that doesn't have any really simple solutions out there unless you pay your people on, unless you're purely fee for service and your, and your collected amount. Or I guess that even that wouldn't work. So that doesn't make sense. This is probably the only way to do it that actually makes sense. Unless. Unless David, you have any other ideas, but I think this is a great one.

No, it's a challenging problem. And the beauty here is, as Brett says, it's really easy to pull out the work that was done at no cost or a discounted cost because somebody is a member. And let's remember that the CDT codes really don't have any relevance for these people. We're not billing insurance for this stuff. So it doesn't matter whether you call it D 1110 or M 1110. When you use a set of codes that kind of parallel the cdts, but start with M, it's just super easy to pull those out later. And as Brett says to, to figure out easily and quickly, you know, how much money do I owe my associates or my hygienists if I'm dealing with commission hygienists for this work?

Yeah, so we get that question a ton at Dental hq. So there's your answer. We're going to put out a white paper on that. And speaking of white papers, everybody who's attending today that we get the emails for, we have a nice white paper two page long on all these best practices laid out that we're going to email to you. If you're listening on DSO Secrets, just shoot an email maybe to Eric ericentalhq and he'll get you the best practices. But we want to give you guys a nice takeaway with these, with what we talked about today. Before we get to questions, I do want to give Eric just a few minutes to talk about what Dental HQ is and how we can make life easier and then we'll. And then we'll get to the question itself.

Thank you guys. Great job with Brett and David. I actually was taking notes. I've learned quite a bit. I run our business development at Deno HQ and we can just go right into it to get to some questions and then field any questions about membership plans and Deno HQ as well. But I think we've got one slide up. There you go. So you know the quick background about us. Obviously Brett has explained his history with membership plans and really why we created Dental hq. A lot of it was for the efficiency in the plan management and billing. So the Dental HQ platform does actually collect the monthly or annual dues for the membership plan Perio plan, whatever the actual offering is, we track it, we report it real time as well as monthly reporting and then do a direct deposit for you getting through. Just, you know, some of these other kind of headlines here about pricing recommendations. It's something that we actually do a consultation with you. We've made it incredibly easy to set all of this up it's more of a self guided enrollment and it's just basic information about your practice, verifying you as a business owner and then getting your bank account set up to actually do the direct deposit. From there we do move into collecting some of your UCR just as a place where we can recommend pricing. We would never publish or share your fee schedule, but do consult with you on that and kind of just what patients are looking for. Brett mentioned that we work with a couple thousand offices across the country and so, you know, we've done it once or twice. We know what patients are looking for. The platform is flexible enough to really offer whatever you'd like. The most common plans are definitely your preventive care plans, maybe a perio plan. Some offices get a bit more creative with senior plans. I think there was one that originally attached like a free Uber ride it. They were right around the corner from a retirement community. So little things like that could be added as just a value add. But we customize everything with you. And really one of the main points, I know Brett, you had originally ran into this with your office manager, maybe head of operations, kind of getting the same answer when they were doing renewal phone calls of you know, yes, I want to be on the Wells family dental plan. I'll just renew when I come back in for my next appointment. And so that was taking up a lot of time that his team was making those phone calls, the renewal phone calls on these annual plans, when really why not automate it? Right. It's just something that is very simple to do that. That was the original point of the dental HQ platform. So taking away some of those administrative hassles and the other hassle with this that's taken away dealing with insurance. You know, I'd say probably nine out of 10 offices that come to us are thinking about or have dropped a ppo. And so what they're doing with the membership plan is offering those patients an alternative, trying to keep them attached to the office. And it usually is a good offering. But you know, again just, just making sure where are we at? Go back.

There we go.

And this is something that we can obviously chat one on one after. Happy to view the platform with anybody interested but we are just releasing a brand new upgrade increase data analytics. Brett had mentioned the integrations with practice management softwares are well underway coming out within a few months here. So that's again just more opportunity for KPI driven practices to really understand the value of their membership plan and also see their opportunity with how many uninsured members are in that practice, in your locations, and really how many are attached to your membership plan? Now, what's the difference between a uninsured patient coming in and an uninsured patient who's a member coming in? What is that doing for additional procedures? Right. So the data analytics side of it is something that's really high on our radar and something we've been continuing to build out. The boosting revenue and the ROI side of things. The bottom line with membership plans is it increases the case acceptance and really patient care. It's more of a loyalty plan. Common misconception is that these are more like discount plans. They're not. We don't really even suggest you give much of a discount, if any at all, on your hygiene. Early on in the presentation, Brett cited that the number one reason that patients, uninsured patients, come see you is cost. The fact of the matter is hygiene just isn't that expensive. Right. Especially when you're offering it up monthly or an annual option. It's more about what fits my budget, not can I afford to see Brett. Right. So that's something that it's really one of those deals. If I, let's say I joined his plan annually, I'm going to go in because I'm paying for the cleanings. That's building the relationship with Brett that's actually moving me to say yes to any additional procedures he might suggest for me. With that being said, to talking about this a little bit, I do have to make. David, great job on your slides. One little correction. You cannot pay cash, at least not on our platform for a monthly plan. What a nightmare that would be. I think we had one little group of offices. It was three or four locations down in Florida. This was years ago. And this poor girl, as the daughter of the owner, was running cards monthly for their membership plan. Hopefully she wasn't taking advantage of the family business. Right. But what. What a nightmare. I just looked at her, dad. I said, man, you're mean. So they got on the platform and we took care of all that for them. I think we're going to have a couple slides for the integrated side of it, but an outreach side. But this is a look at our new upgrade. Yes.

Let's kind of. I hate to speed through the, you know, the sponsored buy, but let's wrap this up in a couple minutes so we can get to some questions.

Sure.

We're excited. This is one of the first views of our new platform that's going to hit the air in two weeks, Right? Three weeks. So first look at it. It's pretty snazzy.

Yeah. UAT starts next week, so we're very, very pumped to be releasing this. It's a huge up and we'll continue to build on top of it over the next few months. Got a pretty good roadmap involved here. Brett, you can actually go ahead just because of respect for time, because two of the major things that really differentiate our platform are our outreach through Business Connect and Community Connect. With Business Connect, it's really about. Think about local businesses that you might know the owners of, and it's simply a way to reach out to them. If they don't offer a dental benefit, they can essentially make your membership plan their employee benefit. They can decide if they want to subsidize any portion of it not required. But a really easy way to get your plan out there in front of local businesses. And we do help with that. I'll elaborate on that when we talk one on one to hit on Community Connect really quickly as well. These are just some examples of what we know works. We do a lot of outreach, local community organizations. These seem to be the different groups that respond the most to it. So it could be something as simple as that condo building right around the corner. I mentioned the retirement community. Just think of any group that might have hundreds or some of these groups even have thousands of people in them. A simple, you know, outreach. And Brett, you had even kind of done this if you want to chime in here on maybe, I think it was an apartment complex you dropped off a gift basket for or something like that.

Yeah, yeah.

I mean, what we do is we go to like retirement communities or golfing communities. We get a basket of our logo, like koozies and stuff, and we get a nice flyer in there about our membership plan with a coupon code, maybe 10% off for the members of that community. And then Dental HQ tracks that community with that discount code through your actual dashboard. So you can see your ROI on those different discounts and the different community groups that you set it up for. So it's. It's a pretty neat program. And we're building a solution now to actually do outreach, outreach to different community groups around your office on your behalf to help you build your membership base.

Yeah, it's all about membership growth with these, these features here. So one more ahead there for me. Oh, okay.

That's it, Eric. That's all you got?

Thank you all very much. Yeah, I appreciate you being on this DEO webinar, I think. Very informative. Several questions came in and Actually, David did a good job of kind of answering them there live. I'll just put, put one out there, which was on the back when you were doing the patient ledger with the D 1110 and then the M1110. Which one do you zero out and which one do you put the dollar amount in? How does that work? Was kind of one of the questions. So I'll let you, David, you answered it if you want to. Or Brett, go ahead. Yeah, go ahead, Brett.

It's pretty easy because it's a fee schedule for your membership plan. You actually will have them both zeroed out. So you're really just doing the duplicate code. So you can easily run a report. If you run a report for a doc for how many D11 10 codes they did, it's going to show everything. In every insurance plan that you have. You only assign the M11 10s to the patients who are in your membership plan who are getting a service done by that provider. So it allows you to run a report specifically for your membership plan with that provider. Am I, did I say that right, David?

Yeah. So the M 1110 should have a 0 fee because that's really what's being charged. And you don't, you don't want to accumulate fees in the patient's ledger because if you do, then you have, then you're back to having to adjust them off. So the idea, Emmett, is, you know, I have an associate, I total up all the, all the M codes that were done in a specific period for that associate and then I have a notional cost for each one.

Would it also work if I use some of your other principles of putting the dental HQ or whatever my plan is as an insurance plan, can I then just run it against, you know, how many we build out against this insurance plan?

Yeah, you're starting to have to make yourself do a sort of multi layer query in your software. Got it. You know, some, some software supports better than others. To me, this is very simple. You can, you can ask your software, you know, how many M, how many codes starting with M did I do for provider Dr. Mark Smith? And you get an answer and you get a report and as I say, you just, you have a notional fee for each one. So you know, the notional for M 1110 is $75. And you, and you, you plunk it in a spreadsheet and you have your answer.

Sometimes when I'm going, my next question here, sometimes when watching something like this, it can feel like, man, I'm going to have to hire a bunch of people to get all of this done, you know, and it's like, maybe I'll just let them steal the money, you know. What have you found as kind of the effort initially? I'm guessing there's some cultural changes, there's some policy changes, it's, et cetera. What do you find the effort is and what do you find is the, you know, is there a new hire that has to happen or is this mostly an individual effort type thing?

Well, I mean that's, that's kind of the beauty of all this automation is the whole point of it is that you don't have to hire people or even you can not necessarily fire people, but assign people to new tasks. Because like when I set up that membership plan fee schedule, it was, it took 10 minutes to set up per office. And then everything was automated from the treatment plan adjustments to the accounting adjustments. It's all automated. The only step, I think out of all this, maybe two steps. One step is checking monthly to make sure your memberships, your members are updated in your pms and the ones have been removed, who need to be removed. I mean, what does that take? We have a report with dental HQ. With our system, it maybe takes 10 minutes a month and that's an extra step. You can also just do it at the, when you're doing the reminder calls. And it's just part of the, part of the process, but I do recommend doing both. And the other thing is running this, this provider, this provider adjusted production. The reason why we're, we're suggesting you set it up like this is to make it super easy, you know, Dr. John Smith. How many 11 tens did he do last month? Okay, he did 35. Multiply that times $75. There's his adjusted production. Right. So, you know, I don't think what we talked about today adds more than an hour's, maybe two working time a month. The point is if you set it up right, it's just really easy and you're now protected much more than you from embezzlement than if you hadn't set it up right.

Yep.

Makes sense. It sounds like it could save quite a few dollars. Well, thank you all so much for being on. David, I saw you put your information. Do you just want to. In the chat here, but do you want to go ahead and, and say how to contact you? And then you can also go over to the Facebook page and input it

there and then so me it's easy. Brett. Dentalhq.com Brett with two T's feel free to reach out to me if you have any questions. I love chatting about this stuff. So happy to talk.

Absolutely. And if if you want to talk about embezzlement, protection or maybe you have an office you're concerned about and you you want us to look at it for you. David prosperidant.com so P R O s like Sierra P E R I D E N T or our phone number is 8882-988839-82327 I never call myself so I had to think about that one.

Awesome. And then Eric, I see you posted Eric dentalhq.com that's with a C Eric it is, yes.

Or go to the website dentohq.com and you can just find us there.

Hey thank you all so much. And as I usually exit, I'll end with these words keep smiling. Thank you all. Appreciate it and have a great night.

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