210: How to Stop Losing Patients with a Membership Continuity Plan

We looked at 250,000 patients we had generated into practices over several years. 88% of them of the uninsured patients were no longer active. When we looked at our data, within five years, they were inactive.

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Hello, everyone, and welcome to another episode of DEO's Growth Secrets podcast. I'm Jake Poole, the CEO of the DEO, and today I'm with Paul Lowry, the CEO and co founder of Dental Menu, which is doing some innovative things on the membership front. So, Paul, I'll let you give yourself an introduction here. You know, you come from the space where you, the marketing space, which all that means is that you really understand the patient's mindset. You kind of have to understand where they're coming from and, and you saw a need there and filled that need with this with Dental Menu. So I'd love to hear a little bit more about yourself.

Yeah, sure. Yeah. So my background, we were doing a lot of new patient generation and, and working with a lot of offices, and we just, we found a lot of them had a membership plan. But when we were looking at the data, they weren't working, essentially because, you know, as a marketing guy, you're getting new patients in, you're looking at retention, you're looking at treatment acceptance. And we were a little appalled. We looked at 250,000 patients, Jake. New patients that we had generated into practices over several years. 88% of them of the uninsured patients were no longer active. When we looked at our data, within five years, they were inactive. So we were generating all these patients. We were losing nine, nine out of 10 that didn't have insurance. And these were all offices that had a membership plan. So that's kind of how we got going is we started diving into the membership plan space to, to solve the retention and the marketing problem and ended up deciding, hey, this is a big issue, let's tackle it. And that's how Dental Menu is born.

Yeah. Beautiful. I actually ran a dental marketing company for a while and, you know, I can appreciate. It can be a little frustrating sometimes when you're driving patients to A certain office and the office doesn't have the tools or the people to convert those into customers. And so it sounds like you went almost closer to that point of treatment, right? Yeah, I get close to the treatment. Curious. How many offices currently have a membership program versus don't, and that's tough to

say depending on the state, but they're obviously more and more common. You know, five years ago it was like, oh, we don't really know what they are now. Most people have heard of a membership plan. They have one they're running themselves. Maybe it's underachieving or it's on their list to do. I would say out of the ones that we meet with in and kind of have conversations with, I would think we're up to 60, 65% have one that we're working with. You know, they end up moving from a different platform or doing it themselves over to our platform. And it's over half now. But I would say you're doing that five years ago it was like one out of ten, you know, have a plan or something.

Yeah, well, that's because it works, right? I mean, I love it because ideas and companies that make sense and work, they kind of grow naturally. And this idea of a membership plan, I know with amongst our DEO members which do, is a kind of a community of the highest achieving dentists in the country, they're all talking about membership plans and optimizing that we're, they're seeing a big lift. What, what of the folks who don't have a plan and versus folks that do? What is a bigger, you know, what do you like to see more? What's the big opportunity for them? You're like, man, if they have no plan, this is just absolute, you know, it's like they have a plan. There's, there's like so much area to improve. How do you look at the both of those situations?

Yeah, really, both those. I mean, we like to do education around a little bit of what. What's the difference between a discount plan and a true membership continuity plan? So I mentioned that the offices that we were doing marketing for, they had their own plan. Almost everybody who runs their own plan or is thinking of starting a plan is thinking what we like to call more of a coupon, Groupon style discount plan. Two exams, two cleaning, set of X rays, 20% off or 400 bucks or whatever that is. But really, if you think I feel like we get kind of weird, you know, in dentistry a little bit, Jake. So I like to look outside of dentistry. Of what's working. Because Dennis, you're a small business, you own a business. So let's see what's working and then let's copy it. If you and I, I'm in Utah. So if you came out here and you said, hey Jake, let's go skiing, well, we might look for a discount pass to a certain resort. Hey, we want to go to this resort or actually we don't care what resort we go to. Let's just find the best, cheapest lift ticket and we'll go to any of these. So we buy a lift ticket, we go one time. That's what's kind of going on in these discount style plans. Versus hey Jake, let's buy a season pass to this resort. And every time we go skiing, that's our resort we go to. We know the mountain, we know the runs, we know the people, we committed to that resort versus buying a coupon Groupon. So what we see with a lot of these plans, if you're thinking of starting one or you have one, patients sign up for a set of services, exam cleaning X rays twice a year. They don't renew day 366. They wait to buy your coupon Groupon until they come back in. And if you ask your front office like, hey, how's the renewal process going? Oh, we renew everybody. That's what the front desk always says. And it's kind of like, well, no dirt. Like if you and I showed up at a restaurant, we say, hey Jake, I'm in la, let's go eat. You're like, oh, I know this great restaurant. We're going to go there. We go to the restaurant, we're standing in line and there's a QR code that says, hey, if you scan this QR code, you can get a two for one on your entree. We're already in the place of business. Like why would we scan it? Get a better deal. So if I don't have insurance, I'm already in your practice. I have a treatment plan presented to me. And the options are, Jake, you can spend $480 on your exam cleaning X rays today and you can pay full UCR rate on your $4,000 treatment plan, or you can give me $400 for my discount plan and you're going to save $800 on your treatment and you're going to save 480 on your exemption. If it's just a math, like why wouldn't I do it? But it doesn't solve the long term retention problem that we are seeing with marketing. That doesn't mean that Dennis bought a season pass in your ecosystem for five years. It just means they got a goop, you know, kind of a coupon Groupon deal at your practice. And that's what we're trying to change in the space, a real membership plan. Like if you look at Netflix, you look at a gym membership. That's a real membership plan. You pay every month to have access to the equipment at the gym. If you don't go today, you can go tomorrow, but you have access to content. You have access to gym equipment. Netflix doesn't call and say, hey Jake, have you liked our content? Do you want to renew for another year? And by the way, we've raised our fees and we have crappy shows and we'll also finance it monthly. I mean that's not what they say. They just make changes, they increase their prices and whatever and you're just getting auto charged on your credit card. You can cancel when you want, but most of us don't. And you can turn the TV on if you want and a lot of us don't watch it for however many months. And so we're trying to get this mind shift of get patients to buy a true membership plan, which means they buy access to care, they buy access to get a cleaning every six months. They come in at six and a half or seven months. That happens quite often. They're eligible. You see them at seven months, you pre appoint them back out six more months. You don't ever ask them to renew. Why would you ask them to make another buying decision for a year when they have teeth and you should pre appoint them, you should see them again on a regular basis. Like that's, that's where you're going to make a lot more money is you're starting to get more of that continuity program selling access to care rather than a, you know, kind of a coupon Groupon style plan.

Yeah, that makes so much more sense. And I'm actually a bit surprised that so many people have the discount plan because when you're given the choice, it's actually a no brainer to go with as a business owner, more of a continuity plan. I would also imagine you probably can't be defined as insurance in any kind of way or it's a different thing.

Right.

But to the patients, the, the peace of mind that comes with having insurance, when you have kind of continuous relationship with, with your dentist, I'm imagining the patient feels like more supported on an ongoing basis when an emergency comes. So you're kind of. They want that. Everyone wants to have the dentist that they can call when something happens. And they also want the pricing and all the services to be kind of like taken care of or at least organized before they get there.

Yeah.

You know, before something happens. So, yeah, it's just, I guess it's surprising that there's. The discount plans even exist when you have a membership style option open.

Yeah. And part of the reason they do though is if you're managing it yourself, there's a lot of admin on the back end when you're trying to keep track of benefit usage and benefit eligibility and then keep track of the ledger with provider pay and who's getting what and when they're getting things. That's really why we exist, is it's, it's hard to sell a membership style plan if you think about it for your front office, which they want their life to be easy. Well, what's easier? Hey, when you feel like it, you come in, you pay me 400 bucks, I give you some services. And then when you come back and you feel like it again, you pay me 400 bucks, you buy some services. Well, that's way easier for a self administered teen. I'd rather do that. I don't care if it's worse for the practice, I don't care if it's worse for the patients. Like I'm busy doing a lot of stuff, so I want to keep it very simple with some annual paid discount plan that's pretty easy to run that yourself.

Well, let's talk about how you all make it just as easy to run an actual, you know, continuity plan. How do you take it off of everyone's plate? How do you help administer this thing?

Yeah, so kind of what we do too often on the back end, on the admin side, I feel like people in our space and people run it themselves. You're constantly fighting the practice management software. So you have all these weird workarounds, all these weird adjustment codes. If Molly's off today, she's the one that knows what's going on with the membership plan. So nothing really happens because Susie and Sally don't know what's going on with it. Right. And so we've kind of embraced the practice management software and said, okay, look, these, we can't call these insurances. It's not, it's a membership plan. But from a management standpoint, we're going to embrace how the practice management software handles insurance plans. We're going to set up a membership plan as an insurance plan in the practice management software. When we price the plans, everything we do is white label for the practice. It's customized to the practice. Patients are getting charged from the dentist, the location, they're not getting charged from us. No money comes to us. We're totally invisible. But we will help them set up a reimbursement for each of the services. These services aren't free. It's kind of like, Jake, what we see in the space is if you and I decided to start an insurance plan and we only worried about premiums, which is top line revenue, and we said, hey, you know what, we'll just kind of claims, it's fine, we'll just adjust everything. It'll work out in the wash. No business does that. But that's what's going on in the membership space is, hey, as long as we're getting the money in the revenue, we're going to ignore claims or usage of benefits and we'll just kind of write those off as zero. And we'll just cross our fingers and hope that everything's kind of working out. It's like, well, you don't do that in business. That's not how you run a business. So we get them to actually say, look, let's attribute $120 for the cleaning and $80 for the exam and $65 for the X rays. They've got to come up with amounts for those services. That's what kicks out the pricing, not the other way around. Too many of them are like, well, why do you charge 28 bucks a month? Well, a coach told me that was competitive for my area. Who cares? Like making money, you might as well go into network maybe, I don't know, like, what's going on with your profitability? Are you at capacity? You trying to grow? Are you in network? Are you a cash pay office? Like, there's a lot that goes into it. So we help them figure that out. And then we set it up as an insurance plan in the practice management software, our software, we've got integrations with a lot of the practice management softwares. When a front desk walks a patient out, indicates what services are done, we grab all that. We reset the benefit eligibility in our software so that we're actually keeping track of that. And then we actually kind of set up a claims process so that they can match collections and production and not adjust their services off to zero. Because if you're running associates, you want to, you want a surefire way to have your plan underachieved, pay your associates on collections, pay your hygienists a collection bonus and give them zero credit on your membership plan. And watch how well they undermine it because they make no money on the membership plan, like because it's not free. So what's going on in the space is, patient comes in, they get an exam cleaning X rays. You've already collected the revenue. What most people are doing is they have an adjustment code for the exam cleaning X rays, they adjust those off to zero on the collection side. That's kind of all you can do. Well, if you're running any analytics software, dental intelligence, practice by numbers. Jarvis, you don't even have accurate numbers now. You just recorded zeros. Your provider pay screwed up. You talk about your valuations. When you get a valuation, no one gives a crap what you produced. I want to see what you collected. And so if you're not smart enough to add those collections back in, you've got 300 membership patients. Well, now you wrote off 600 cleanings for the year. That's going to hurt your valuation or your associate buy in numbers because you're not running it correctly. So what we do is we set up a holding account for them. They own it. I don't own this account, they can fire me. That revenue is unearned revenue from an accounting standpoint. So as those monthly payments are being made, those go into their holding account and it just sits there. It doesn't hit the operating account. Your team's not worried about any of these payments. When you walk a patient out in Dentrix Open Dental Eaglesoft, we grab all that information, we automatically ping that account. It sends an EFT transfer of revenue from their membership account to their operating bank account and it produces a report that looks like an EOB that says, hey, Jake, just got a cleaning. Here's the provider that did the work and here's the amounts that got transferred. So your bank statement deposits match your collections and your production, your practice management software. No fraud, no write offs, no inaccuracies. If you want to do an audit, you've got bank statement cash that was moved that matches your collection. You don't have stuff getting jacked up. We've seen fraud, we've seen front desk put 10 people on their plan. And how is there any catch or balance? Like, it's very bad accounting if you don't have a bank statement matching collection production and you just write things off, that's, that's bad. And so what we see is an oversimplification of a membership plan down to a discount Plan because the admin side is too cumbersome to really run a true killer membership plan with a lot of options. So patient doesn't get the best care, practice doesn't maximize revenue because you don't have a way to really administer it properly in the practice management software. It's a really long winded answer, Jake,

but I think it's.

Hopefully it makes sense.

Super important if you're doing what you mentioned, if anyone is doing what you mentioned, writing off and doing the work rounds, I would say call immediately. That, that's, that's very bad for, for many, many reasons. Obviously you talked about the pay your accounting. So I mean everything's off. If you ever go sell your, you're actually not getting credit for a bunch of work that you're doing a bunch of dentistry that is inside of your patient base that is happening, you go to sell, that's not getting accounted for, you're literally losing, you know, if you sell for a multiple of five or, or six, multiply every single cleaning by six and you've lost all that money in your sale. Right? Yeah, so, so yeah, that's absolutely. Code red needs to be fixed immediately, I would say. And then you know, the administering part, it sounds like you guys are able to just automatically do all that stuff. I mean it really takes it off of the plate of, of the practice. Now what it sounds like is do you ever work with anyone who is wanting to move away from PPOs and this kind of takes the spot of that. How does this work?

Yeah, absolutely. So I mean if your capacity really two ways to make more money, right? You've got to add more appointments, add operatories, add an associate, add another location or you've got to make more per patient essentially. And so you know, you don't want to drop them too fast. But obviously if you're going to drop an insurance, you're going to create some capacity. Some of those patients, I think it's a little bit of a fallacy. From the data we've seen, I've seen people in my space really beat their chest and say, hey, drop all your PPOs and move them all to a membership platform. And that sounds great, Jake, but the reality is if it's an employer sponsored plan, they're not moving over to your membership plan. I mean, so we like to be real with offices where it's like, all right, you might, you might move 10 or something over to a membership plan, but you're going to create capacity. So now your marketing becomes a tool to get more of those membership patients. And you have a way to market your products differently to get the right kinds of patients into your practice that are going to stick with you long term on the membership plan. So you definitely want to look at your insurance mix. You want to start dropping those PPO plans, You want to move as many as you can off those plans on a membership plan for sure. But then you're probably going to need to do some internal external marketing as well to kind of fill those slots. So we do, we've got some internal marketing campaigns that we do run that are specific to membership plans and then we partner with some marketing companies to help on the external marketing to kind of fill those slots as well.

Yeah, we've had a lot of members find success in moving off PPOs, maybe a little bit higher degree, maybe than 10% even. I think a lot of it's really in the communication, taking it slow, not being in a rush with. But the patient communication. Yeah, but I mean the good news is that this tool is, you know, a really good way to, to like kind of mitigate that transition. So what are some of the other KPIs or areas that you see having a membership plan effect? Right. There's obviously the accounting side, which is code red, I would say. But what about, you know, treatment acceptance or any other benefits you see to doing this? Right?

Yeah. So one of the things that, that you can do in our software is you can have add on benefits where patients can customize their care plan. So you know, when you're doing pricing, you're trying to, sometimes you end up with the lowest possible price because you're, you're trying to get that, you know, price conscious patient on your plan. You don't want to price them out, but there's a group of patients that will spend a lot more in your office. And airlines have figured this out. I mean think of all the industries that have figured out upsells. So in the software I've got guys doing Botoxes, add ons, fluoride. Like a lot of offices will include fluoride and emergency services in their membership plan. I'll tell you right now, no one buys your plan because it includes fluoride. It's just you're giving it away. And so if you strip that out and you say, hey Jake, here's the value of fluoride, here's why you need it. Patient's going to say, well how much does it cost? I don't have insurance. Well, it's 40 bucks. Well, they're making this $40 buying decision, every time, instead of, hey, Jake, here's the value of fluoride. We can add it to your plan. It's $4 a month. You're bumping them from 31 to 35 or whatever that price is. You're not giving it away for free. Oh, hey, we offer Botox now as an add on. Well, how much is it? Well, it's $80 a month. And you get so many units when you come in for your cleaning, you sell at one time. Now they have that coverage. A lot of our offices do, like a premier upgrade where they'll do things like nitrous, any and all needed, x rays panel, 3D stuff, whitening gel, maybe emergency visits, things like that. That's very high profit margin. 15, 18 bucks a month. You get 100 patients paying you for that. They have that coverage, but that's just bottom line money. You're not opening more operatories, you're not hiring more people, and all of a sudden you got an extra 1500 bucks, 1800 bucks a month rolling in. So we see a lot of offices making good money by offering other services, ancillary services in their subscription plans that patients can add at their discretion.

Yeah, I love that. So, you know, essentially it becomes very easy to just continue to, to increase the amount of services that you're communicating to the patient. Slow basis, you know, one, one meeting, One meeting, one meeting. How do you help that part? How do you help, you know, train the team, train the dentist or do you provide any materials or. Because that's really where all this is going to happen is at that point of contact with the patient.

Absolutely. Yeah. So we, yeah, we build out a brochure, we build out a landing page, we do several meetings with the team, make sure they're all on board. We did our onboarding meeting beforehand. It's got to be set up right. It's got to be priced right. You got to make sure the key team members are involved with that plan set up so they've got some ownership and they're deciding this is what we want for our patients. It fails sometimes you got a good, if the doctor is a good leader, then obviously they're going to do great with it. But if you can get your, your main office, front office, people behind it, make sure they buy into it through some of these pre meetings before you launch. It helps a lot.

So what are some of the, Give me examples or case studies that you've seen with some of your clients that have done this either. You know, what's it look like a before and after if somebody's listening and everything before, yeah.

So we're seeing, when you run a true membership plan, instead of the two cleanings a year, we're seeing on average it takes about 14 payments for them to actually get their two cleanings, two exams. So another way to look at that, if Your plan is 35 bucks a month, you move to a true membership continuity style plan, you're going to get an extra $70 for the two cleanings, two exams and X rays. So that's something that's been pretty big. We've seen on that premier upgrade with many of our offices, we're in the 30 to 35% range of patients by that upgrade, if you will, which is pretty high. I mean, so if you have 200 patients on your plan right now, you can get 70 of them to pay an extra 15 bucks a month. I mean that's substantial revenue, you know, and that's kind of what we're seeing there. And then on some of the reactivation things, we've seen about an 8% response rate, meaning we're remoting in, we're calling patients, it's been a year or more, they haven't had an appointment. We're getting about an 8% response rate on that list. So if you had 300 patients, we build the program, we do the marketing, we're going to reactivate 20 to 30 of them. We're at 24, you know, 8% on the, on the membership plans, using the tool, getting them back into the practice. And so those are all some interesting numbers I think, to see what's going on and to see, you know, how it's helping.

And then of course the treatment acceptance rate will most likely go up. I mean even with the discount place, if this is presented correctly, it probably will have a higher, you know, conversion rate than, than a discount plan just because it makes more sense and I think it provides that peace of mind to patients. Anything else? You know, if somebody's kind of toying with us, let's say they do have this discount plan situation and this is clearly the better way to go. I'd said I see very little downside to upgrading from a discount style plan. Anything else you would tell somebody who's kind of on the fence?

Yeah, I mean if you want to go to our website, we have a free assessment, you can kind of do a self assessment, see where you're falling short, where you can, um, we've got a pricing tool, if any, you can share my Email address. Anybody wants to email me, I'll email a pricing tool again, no strings attached. You can do your own pricing and look at things. We're very open with our info. Even if all we do is help you improve your current plan and we're not a fit for you, that's totally fine too, you know, happy to jump on a call and talk through it. One other thing we've found that has helped is we've a lot of our offices run a rewards program. So basically when a patient comes in, they get a cleaning on the plan. They can earn 25 or $50 of rewards towards treatment that may be needed in the future as long as their plan stays active. So you can imagine on the retention side, you come in, you start paying your dentist, you get a clean and you get $50 on this reward account. Well, if you want to cancel your plan, those rewards go away. You're not going to cancel. Then you come back in another six months later you get a clean. Now you have $100 on there. Now it comes time for treatment and it's like, well, hey, you got this treatment plan. You can use your rewards. The chances of going to another office is very slim once they get those rewards. And we've seen guys like double rewards on specific times to close treatment. Hey, Jake, you got this treatment plan. It's a cosmetic case. If you get the same day treatment done, we'll double rewards towards the treatment. If you can carve out time right now and they're thinking, oh man, it's another $100 off, I should probably move my work meeting and get it done kind of thing. So the rewards have been really fun. That's something that you can think about adding to your plan.

Love. The possibilities are kind of endless with this. So like I said, this is a, this is a trend with our DEO members who a lot of times are on the cutting edge of this. In fact, we found out about Dental Menu from one of our advisors who has been using you and very large groups. So this is kind of the future. I think we have to kind of mitigate our dependence on a lot of other sources.

Right.

And take it all in house. And also patients are really looking for that peace of mind to have that continued relationship and they're willing to pay it, you know, they're willing to pay that continuous payment. So, Paul, thank you so much. CEO, OWNER of Dental Menu Dental Menu Keep an eye out. Like I said, this, you know, Dental Menu has been kind of talked about amongst our DEO members as one of the best in class for this type of service, and so definitely schedule an appointment.

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