December 19, 2016
There is an old saying that “if you continue to do what you have always done, you will continue to get what you have always got.” I use this maxim as a motivational tool to get clients to open their minds and accept new strategies and adopt new systems that will enable their dental practices to reach new levels of productivity and profitability. Unfortunately for the dentists of Massachusetts, doing what you have always done will no longer get you what you have received in the past – it will get you a lot less!
As of January 2017, Delta Dental of Massachusetts will be forcing in-network providers to accept the Delta PPO fee schedule and not be able to choose to only accept Delta Premier. Premier fees were usually a 10-15% discount from the published fees of a practice. Delta PPO fees are closer to a 25-30% write off from the published fees of the practice. And everyone predicts that this action is the harbinger of the eventual discontinuation of the Delta Premier fee schedule.
This new policy by Delta will have horrific and deleterious implications for patients, dentists, dental staff, and vendors who sell to dentists. Patient care will be compromised at every level. As a dentist in this environment, are you still going to consider adding expensive state-of-the-art technology? Will your hygiene visits need to be reduced to 35-40 minutes instead of one hour? How can you pay the lab $200 for a quality crown when you are only able to charge a significantly discounted fee? Is it time to buy stock in dental labs in China?
I can envision dental practices now being forced to nickel and dime their patients by charging their insurance for emergency exams and emergency palliative treatment that used to be offered at no charge as a customer service courtesy. The Scheins and the Pattersons and the Bencos of the world were already under challenge from online dental supply stores. Their life just became even harder in this new world of low fee dentistry. And how can we as dentists think about offering even cost-of-living raises to our staff when practice revenue in 2017 will unquestionably be reduced?
The valuation in the sale of a dental practice is directly tied to annual revenue. I see the potential of big turmoil in the marketplace. Dentists will have to work longer before retirement. Dentists who might have been thinking transition might decide they need to stay and work longer. And perhaps some dentists may look at this recent Delta policy change as the final straw and just decide to get out of dentistry altogether.
I have always chosen to look at the glass half full rather than half empty, but I am struggling big time with maintaining optimism for my New England clients. It appears to me that Delta has finally stepped over the line. They are threatening to no longer directly reimburse out of network doctors. They will reimburse the patient directly forcing insured patients and families to pay for dental visits at the time of service and get reimbursed later. The only reason to do that is to punish out-of-network doctors and the patients who choose to see them.
There is no easy answer as to what to do. Staying in the network or leaving the network will be painful – at least in the short term. I think your decision will be based on many factors: your status in the community, how busy you are, your age, the number of years you want to continue practicing, your overall debt, your financial obligations, and your appetite for risk. When making your decision, for sure you will need to calculate the number of Delta patients in your practice as compared to the total number of patients along with a recognition of the dollars received from Delta as compared to total practice revenue.
And then one very important question: how do you want to practice dentistry going forward, and are you willing to be controlled by dental insurance? I welcome your feedback. I’m certain this will not be my only post on this topic.
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