Greg Winteregg, DDS Provides a Solution to the Managed Care Mystery

 Greg Winteregg, DDS Provides a Solution to the Managed Care Mystery

How am I supposed to proceed?

After eleven years of practicing dentistry, I found myself contemplating this very question in 1992. My dental office was located in a strip mall until the supermarket left. As a result, the foot traffic departed. Both the number of new patients and the amount collected fell by 25%. For the eleven years before this, I had paid consultants tens of thousands of dollars to show me the ropes when it came to scheduling, staff meetings, etc. Unfortunately, I still haven't figured out how to fix my declining income or attract new patients, even after all this consulting. Frustration set in. I started looking into HMO and PPO plans as a possible solution. 

Maybe you're thinking about managed care, like HMOs and PPOs, as a way to attract new patients or find a way out of it. With all the questions people have about managed care, I figured it would be helpful to address two main points: (A) why people enroll and (B) how to actually leave. Whether you are a member of an HMO, PPO, or discount plan, or you simply wish to learn more about them, you will find useful information in this article. 

To begin analyzing an exit strategy, we need to take a look at the reasons why dentists sign up for these programs. Regular responses I receive from my coworkers are: 

1. I should have been more active. Filling that vacant chair time with a patient, even at a reduced rate, is preferable to leaving it empty. 

II. I wished I could join the plan before I was "locked out"

3. This plan was adopted by many of my patients. 

4. My cash flow needed some work. 

More new patients were what I needed. 5. 

The reasons you joined or are considering joining might be similar to others. Although I acknowledge each of these points, I must ask: How would you respond if I asked if you would rather get your regular full payment for the work you're doing? The answer, I presume, would be "yes."  Performing the same quantity and quality of work for less money is the most glaring issue with these plans. We know this won't work because none of your lab, suppliers, landlord, or employees will be ready to perform their services at a significantly reduced rate. A typical write-off ranges from fifteen to twenty-five percent and can reach sixty percent with certain plans. For a procedure, you are cutting into your income, but not your expenses. At most, you'll see a decline in your profit margin; at worst, you might find yourself in a jam and unable to pay your bills. 

Managed care is addressing what issue?  More patients will come your way once you join a plan. Then why not just go out and get more patients without signing up for a plan?  Given that you already know how to bring in enough new fee-for-service patients to keep your practice afloat, why would you bother enrolling in a plan?

The capacity to bring in new fee-for-service patients is the first need for escaping managed care. 

When most doctors consider ways to increase their patient base, they usually do one of three things: a) realize they need more, b) struggle to decide due to a lack of training in marketing and promotion, or c) wish someone else would take care of it!  With this operational basis, you lose control of the area and are instead dependent on whomever you hire to handle it or on the "hope" that a marketing strategy will be successful, even though you have no idea what you're doing. 

Well, how do you go about increasing your ability in an area such as marketing and new patients?  The answer is simple: get trained on the subject so you can handle it yourself and be confident enough to act. Like it or not, you ARE an EXECUTIVE, by virtue of the fact you own a business. You can try to get around this fact, but it is what it is. An executive needs to know how to handle (competently) any area of his or her organization. 

So, hurdle number one to overcome when looking to get out of managed care is having the ability to attract an adequate volume of fee-for-service new patients. Hurdle number two believe it or not is case acceptance. 

In another article I wrote, I detailed the relationship between low collections, case acceptance and of all things referrals. Without going into great detail again, I'll point out that an inability to "sell" full treatment plans, can convince a doctor that the reason for his or her low collections is not enough new patients. In other words, "to increase my collections, I need to more new patients coming in." It is true that an abundance of new patients is healthy for a practice and should be maintained. But look at it this way: If you have three patients each with a $6000 treatment plan, only accepting a third of needed treatment presented (i.e. each do $2000 worth of treatment), this is the same from a collections standpoint of one patient accepting their full plan of $6000. That one patient who accepts their full plan will also be healthier and more likely to refer!

With all of the above in mind, there is a basic formula that ANY business follows:

1. Sell their product or service. 

2. Deliver their product or service. 

3. Get new people to sell and deliver their product or service to. 

"Management" coordinates and holds the organization together so that it will continue to sell and deliver more services or goods to the public (which means expansion). However, if there is ineffective marketing and sales then there isn't enough activity in the business to have something to manage. 

Dental school and continuing education trains you how to "deliver the product." Where most practitioners fail is in 1 and 3 above - selling and getting new people to sell and deliver to. The reason for this failure is not hard to see - you will be successful in areas where you are effectively trained. Areas in which you are not trained in or know little to nothing about will be troublesome. You will also have a hard time making decisions about these areas. And let me make clear that by effective training - I mean learning techniques that actually get a desirable result!

Having difficulty in sales and marketing due to no training, it is easy to see how Managed Care Plans can appear to be a solution. While they will make you busier, they in fact breed other problems when it comes to overhead and profitability. 

The solution to this problem is simple, learn how to properly market and sell in your office. With that ability, you will then have the confidence to start getting off the plans. 

To finish my story above, at the same time in 1992 that I was investigating managed care plans, I heard about the MGE New Patient Workshop (http://www.mgeonline.com). I found out more about it and decided to give it a shot. What attracted me to it was the idea that MGE was going to train me to fix the problem myself and that there was no risk involved (money back guarantee). So, with the managed care contracts on my desk, I signed for the MGE New Patient Workshop. I did the New Patient Workshop and was able to handle my new patient problem on my own - without having to join any plans. I continued my sales and executive training with MGE, established a prosperous practice, and eventually sold it in 1994 to become a partner in the company, where I could continue to assist other doctors in my position. 

So, when I tell you that learning how to do it yourself is a solution - I am not saying this from some detached viewpoint - I lived this experience myself and saw the benefit!

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