Over the past 15 years, dentists have been signing up for more and more PPO’s. Write off’s have increased dramatically! For example, in the upper midwest, the average collection percentage is about 83% of gross. That’s nearly two months a year doctors are working for free because of PPO write offs!
In other parts of the country it’s better, and in some areas, it’s much worse. It’s not unusual for me to field calls from dentists who are collecting as low as 70%, 65%, and even 55% of their production.
Doctors, you’ve learned how to sign-up for PPO’s. Now, it’s time to learn how to cut back on PPO participation, and push up your collections. Take a look at your collection percentage. If it’s under 85%, it’s likely that you can do something about it. What if you added 3, 5, 10 or even 15 points more to your collection percentage?
You have more power than you think! Although few practices can be completely “non-participating” with all insurances, it is possible to balance your PPO participation. In a way, balancing PPO participation is now, in effect, balancing your fees. Remember when you used to be able to set your own fees?
We have found that dental practices not in network with any insurance companies do generally attract fewer new patients. Yet, practices that add many PPO’s don’t get increases in new patients in proportion to their PPO participation. There is a point of diminishing returns when you take on PPO’s (see graph on the next page).
Doctors often sign-up with plans hoping they’ll be on the insurance company list and get more new patients. However, in many cases you just turn patients you already have into deep discount PPO patients. Even if you’re on the insurance company lists, you may be buried below the corporate mega-practices. Plus, although it’s true that insurance participation is important to patients, it is not the major factor in how many new patients you’ll attract.
Yes, I see practices with lots of PPO’s that get lots of new patients, but I also see practices with balanced PPO participation that do too.
When it comes to new patient numbers there’s much more correlation with visibility, location, signage, web presence and business hours than there is PPO participation.