How to Drop PPOs Without Losing Patients or Profit

Here's a question that might make you a little bit nauseous. What would happen if you drop your biggest PPO tomorrow? Would you panic? Or maybe would you finally breathe a little easier? Because here's the truth. The thing you think is saving your practice might actually be suffocating it. I'm talking about low reimbursements, long delays, zero loyalty. Insurance is the third party that keeps getting in the middle of your patient relationships, your profit, but most importantly, your patient's health. But you don't have to play their game anymore. In today's episode, we're talking about how to drop PPO strategically without losing your mind, your money or your patience. Welcome to the Next Level Practice podcast where we don't just talk about the business of dentistry, we fix it. I'm your host, CEO of Next Level Practice, Kelly Dahmer, and today we're talking about something that strikes fear in the hearts of the most seasoned practice owners, which is walking away from PPOs. I want to tell you a quick story about Natasha, who is one of our managers, one of our practices. She and I met a couple years back and really started looking at her PPOs and insurance reimbursement. And she told me, look at this. I won't name the specific insurance provider, I'm sure you guys can guess who it is. But she was actually for her hygiene visits, for that insurance. It was actually costing them money to have patients come in for treatment. And I'm sure that that doesn't come as a surprise to a lot of you. I'm sure a lot of you have experienced that before. When you really look at the return on investment for being in network and some of these PPOs, you're like, wow, I'm actually losing money here. Especially with the rising cost of team member compensation and what hygienists their hourly wages are these days. So let's break it down how we can actually strategically review this and create a business plan so that we can support profitability, support patients health and work with insurances, which might mean dropping them that typically don't work with private practitioners any longer. Here's what we're going to be talking about in today's episode. The first thing is why PPOs are a slow or maybe a very fast leak, draining your practice profit and your practice freedom. The second thing is how to assess which plans to drop and when. This is the strategic part, right? Because you might be saying to yourself, well, I know how to drop my insurance. I just call them up and tell them. But then your Patient just gets the letter in the mail and it's not on your terms. How the communication is being handled. Right. So we want to assess which plans to drop and when and what to say to your patients and your team when you make the move. The last thing that we want to make sure that we have in place is the systems that are going to be important in this before cutting ties. If you've ever thought, I hate insurance, but I feel trapped. I just don't know how to leave. This episode is for you. One of the things that's really important in our methodology is making sure that we have a triple win. Your patients are getting healthier, your team team is thriving, and the practice is solvent. Well, let's be honest, PPOs are no part of that. They were designed for their own profit, not yours. They limit your fees, they increase your workload, and they really put your team in a reactive defensive position. The worst part, they actually train your patients to care more about coverage than their health. So I want to talk about how we really helped Natasha take this control back. Yes, we did end up helping her move out of network and become fee for service, which I know is a big goal for a lot of our practices, but it needs to be very strategic and step by step. So the first thing is really looking at her profit and doing what's called a profitability analysis. We looked at each PPO she was in, what percentage of her active patients were in each ppo, how many patients were on each of those plans, and what her adjusted production was versus what her actual profit per visit looks like. Spoiler alert. She was actually losing money on more than 30% of her PPO appointments, which is shocking. Once we had a good idea of which PPOs were maybe more friend versus foe PPOs, we actually put a plan in place to figure out which one we were going to be dropping first. We want to do this gradually. Want to drop one PPO at a time. Ideally, sometimes we'll do more. Based on what your variance is between your gross production and your net collection, we can determine which one is going to make the most sense. Also taking into consideration the reimbursement rates. Right. We're not just ripping the band aid off all at once. We're going to drop one at a time. And we also made sure that her team was very prepared. They understood why we were doing it and they had a script that framed it as a values based decision versus it just being a profit decision. Right. We're moving away from insurance driven care so that we can Focus on what's best for you, not just what's covered. I think for our patients they need to understand, some of them might, but a lot of them don't, that insurance isn't necessarily supporting them, it's hindering them from their coverage. Here's part of that script. Hi, Mrs. Jones, I wanted to let you know that we're actually moving away from your insurance. We're moving away from insurance driven care so that we can truly focus on what's best for you, not just what's covered. So that's a part of the script is really having it be focused around the fact that insurance isn't necessarily, necessarily allow us to do what's best for the patient and do what's best for their care. The third step that we want to have in place is having a membership plan, an in house membership plan to direct patients to because we want to remove money as a barrier and I think that's why we have insurance plans in place, is to help with that. But in reality they end up being a burden for the practice. Right. And so we want to have alternative for them besides just going to another insurance so that they can maintain being a patient inside of the practice, but also have a plan that's going to work and help them remove money as a barrier. There's ways to do it on your own in house, but there's also some great partners that we have out there that can help you create your own membership plan. Some of the companies that we partner with are Clear or even boom cloud so you can reach out to them and see how they structure their membership plans. And so you want to have an alternative that you can direct patients to as you're educating them why you're making this change. Having an alternative is an important piece of this. And then the final step is really making sure that the team is trained to lead the conversation. From the administrative team to your clinical team, you want to role play this, how to answer tough patient questions, make sure they have confidence and compassion passion around this and understand the why behind it so that they can clearly communicate this, so that we can reduce as much as possible our patient attrition when it comes to dropping plans. The good news was within six months, Natasha's collections rose, her stress dropped. But more importantly, there was no longer a barrier to patient care. Here are your actionable takeaways that we do in every episode. The first one is really knowing your numbers first. Don't guess, don't just cross your fingers and drop the insurance and hope it works. Out run a profitability PPO audit so that you know exactly which plans are helpful helping and which ones are hurting. The second thing that you want to have in place is a strong alternative to offer membership plans, clear communication and a focus on the value of what you're doing, not the benefits will help you keep the patients that are worth keeping. And the last thing that you want to have in place is a script for your team to transition your patients with confidence. Make sure they're prepared. Patients are going to mirror your energy. If you panic, they will too. If you lead, they will follow. So make sure you really set your team up for success so that they know exactly how to communicate this for keeping your patients in mind as well. So make sure you set your team up for success so that they can really confidently communicate this to your patients and minimize that patient attrition. When it comes to dropping insurance, the first thing that we really unpacked is the fact that PPOs might actually be stealing more than they're giving. It's not a triple win having them in your practice all the time. The second is that you can drop them with a strategy and systems in place. And ideally you're doing it one at a time. The last thing that we covered is when you focus on value, not volume, your practice and your life can really change. If you're curious about diving into your practice specifically to assess which PPO plans are costing you, which ones might be helping you, and which ones that we would recommend you drop first, we're available if you'd like to schedule a call. The link to that is in the show notes. Bring which insurance plans you have, what percentage of each patients you have, active patients you have in each insurance plan, as well as your gross production and net collection annually. And we could support you in starting to dive into this. And if this conversation gave you courage, clarity, or maybe even brought about a sense of calmness, go ahead and share it with a colleague. This is the conversation that more dentists need to be having. I'm Kelly Damer and this is the Next Level Practice podcast. I'll see you next time.