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912: How to Break Free From PPOs – Dr. Barrett Straub

You became a dentist for the freedom it provides. But PPOs are putting a chokehold on that freedom! In this episode of Clinical Edge Fridays, Kirk Behrendt brings back Dr. Barrett Straub, ACT’s CEO, to do a deep dive into how you can break free from PPOs for a better practice and better life. They share the tools you can use, what steps to take, and how to choose which PPOs to strategically drop first. If you're ready to reclaim your freedom, listen to Episode 912 of The Best Practices Show!

Learn More About Dr. Straub:

Learn More About ACT Dental:

More Helpful Links for a Better Practice & a Better Life:

Episode Resources:

Main Takeaways:

  • You give patients treatment plans before doing dentistry. Do the same for your practice.
  • It doesn't have to be all or none with PPOs. Determine what's the right mix for you.
  • Understand and shrink the different gaps you have to increase your profitability.
  • Figure out which plans you're losing money on so you can drop them first.
  • Eliminate your limiting beliefs. Not everyone will leave your practice.

Quotes:

“Dentistry is the greatest profession ever, ever, ever, ever, ever, because you make the rules. You don't have to live by anybody's rules. You can practice where you want, you can choose your hours, you can practice the style of dentistry, you can charge whatever you want. No one makes the rules. Do you know who makes the rules? You make the rules. When you choose how to practice — let me say that again, choose how to practice — when you practice, with whom you practice, and who you serve, it's the best thing ever. When you have no choice of when you practice, who you practice with, that's when anything — and I do mean anything — becomes miserable. So, today, it's not about PPOs — it's about your freedom. And let's be real. PPO participation can put a chokehold on that freedom.” (3:14—3:58) -Kirk

“Take the time to make yourself better and your practice better so that you can enjoy going to work.” (4:49—4:53) -Kirk

“Participating with PPOs is a choice that you've made, and we also feel sometimes limited by that choice. But what I want to say is it doesn't have to be all or none. A lot of people make the choice, it's either I'm in PPOs and I provide with all of them, or I'm not at all. There's a large spectrum between that, and what you'll get from today is some of you won't want to contract with any PPOs. Many of you will still always contract with some PPOs. The goal is to have the business acumen and the right mindset to determine what the right mix is for you so that your days look the way you want them, so that your profitability looks the way you want it and need it. That's not a one-size-fits-all for everyone, but we're here to give you the tools so you can make the decision whether totally out-of-network is your goal, or is it something short of that and is it a hybrid or a limited exposure to PPO? So, we're going to help you think at a higher level so that you can make very data-driven decisions for your business.” (4:58—6:08) -Dr. Straub

“According to the ADA, the average dentist in the United States works 220 days. That is crazy. Before COVID-19, if we found anyone in 200, we thought that was a lot. Now, in the last few weeks, we've found people at 240, 250. People are working harder, and harder, and harder for less. We don't want you to do that.” (8:14—8:36) -Kirk

“The first part, which is a challenge for most people, is billing your full fee. You don't put in your full fee — you don't. I'm going to challenge you. You don't, because you have somebody else's fee schedule in there, or you're leaving out fees. Sometimes you do dentistry, and you barter it, or you don't put it in the computer. The challenge is, number one, you've got to put in your full fee every single time, even if you're 100% PPO, so that they can see your crown fee is $1,600 and the allowable is only $795, so that when you move away, they go, ‘I knew that the whole time.’ Now, that might be overwhelming. But the truth is, you have to make this as simple as possible.” (8:56—9:33) -Kirk

“Ultimately, you have to understand the power of write-offs in dentistry and how dangerous they are. The average dentist is writing off more than 40% of what they gross produce, which means they're working almost half of their days for free. Half of the 220 days, almost, they're working for free! I would argue that they're actually working for less than free because your office is open, you have to pay people, you’ve got to pay rent, and you’ve got to pay for supplies. So, knowing this, you can reduce it. The effort gap, bottom line, is the driving force for why so many practice owners are discovering why to explore dropping PPOs — and I agree.” (9:34—10:12) -Kirk

“You've got your collections gap, which is the difference between collectible production, what’s actually collectible, and your net collections. Some of us that are listening to this are at 94%, 95%. That's not great. I love what Robin says on our team. Ninety-five percent is an A in school. It's not an A in the collections gap. It's a C in the collections gap! So, we want to be at 100% or 101% or even 103% because now you owe patients dentistry. That comes with great development in somebody talking about money up front. Robin also said this last week. I love learning from our coaches. When people have a collections gap problem, it's not an AR problem — it's a financial arrangements problem. You’ve just got to fix it at the conversation. So, this is fixable.” (10:13—11:02) -Kirk

“Here's the dangerous part . . . Your loan payments and your tax payments are not on your P&L. Most dentists don't know that because they just look at what's at the bottom of their P&L and their accountant goes, ‘You're doing great,’ and dentists go, ‘Well, I don't have any money.’ It's because no one is looking in the cash flow gap. So, you’ve got to know your gaps.” (11:16—11:35) -Kirk

“Most people don't know how many active patients that they have. That's an important piece. And really, as a great dentist, you don't need 4,400. Think about this. If you're a single doctor — now, you could extrapolate if you have multiple doctors — you only need 1,500 patients. That's it. There are 331 million people in this great world. You don't need all of them. You only need 1,500. If you have two full-time hygienists, you only need 750 each. So, get your brain around like, I don't need everybody. I just need the right people that value what I do that say, ‘You're my person.’” (12:05—12:40) -Kirk

“A lot of our offices will pull [their unscheduled active patient count] and they'll go, ‘Wait a minute. I have 700 unscheduled active patients?’ Yes. Those are patients that have had an appointment in the last 18 months, but they're not tethered to the practice with a future appointment. They're great patients, and you're spending all your time on Facebook ads, designing your website, and trying to do a marketing campaign. Let's go from 700 to 650 to 600 to 550 to 500 over the next couple of months. I promise you, your hygienist will go, ‘Stop! I have nowhere to put these people.’ . . . I know what you're thinking. ‘No, we get them all.’ No, you don't. You don't. People aren't thinking about, ‘When do I go to the dentist?’ every day. If you don't tether them to the practice, they free float into the universe. So, tether them to your practice.” (12:48—13:47) -Kirk

“This might be the best dental KPI in the dental business, annual patient value. This tells you how you get to your gross production. So, let's say there's a practice and they produce, gross true production, $1 million. There are two ways to get there. You can get there via doing a lot of dentistry on a few patients, or a little bit of dentistry on a ton of patients. Two different practices could get to $1 million. So, APV, annual patient value, is literally the last 12 months of collections divided by active patients, and it gives you a dollar value. If that APV number is $300, $400, that means you are doing high volume, seeing a lot of patients, doing one to two teeth to get to your gross production. If that number is $1,000 or more, that means you are low volume, high profitability. Meaning, you are doing a larger amount of dentistry on each patient. Therefore, you need to see less patients. Neither one is right or wrong, but each end of that spectrum tells a different story about business model, business strategy, capacity, and what your days feel like.” (14:20—15:32) -Dr. Straub

“Cancellation percentage is a big one. If your cancellation percentage is 12% — meaning appointments scheduled and canceled, not kept for their original purpose — I can already tell you people don't trust you. They don't value you. So, your team, you have two people up at the front and they're scrambling. They're spending 75% of their day putting out fire, after fire, after fire because they're trying to keep the schedule full. So, we need to reduce that percentage greatly.” (16:30—17:01) -Kirk

“You've got to have a healthy stream of new patients that come into your practice for the right reasons, and you've got to know where they're coming from if you're going to put any money into marketing. And the new patient referral source — where are these patients coming from? A significant amount of them should be coming from a referral, going, ‘I know you're expensive. I've been to a lot of places. I hear you're great.’ That should be telling you what the word on the street is all about.” (17:02—17:24) -Kirk

“You've got to have people tethered to your hygiene. A lot of you have new patients come in to see the doctor, and that's all you're thinking about. So, you have a brand-new patient. A great patient comes in and you present a $22,000 treatment plan. Then, your treatment coordinator stalks them for the next six months, and they're not picking up. Well, you didn't have them tethered to the practice. They're a great patient, but they just weren't ready to hear that. If I'm going to be working in your office, I'm going to schedule an appointment with the doctor, no matter how we do this. I'm also going to make sure you have a hygiene appointment at some point during this conversation so that you're tethered in two ways.” (17:36—18:10) -Kirk

“You’ve got to know which plans to drop first. Like we talked about, you're going to do the segments. Here's the first thing you need to work with your team on, is helping them understand that there are three different main segments of patients. You have patients that are out-of-network or uninsured in your patient base. That's the first segment. The second segment you have is you might have a membership plan. Those are people that are attached to a membership plan. Then, the third large segment are people that fall into PPOs. That would include, in this particular example, three different PPOs. So, as you can see . . . you can't spend all of your energy hating the PPO plan. You've got to spend all of your energy saying, ‘How do we make this practice better? How do we build more of segment one?’ which is out-of-network, more of membership, if that's what you want to do, and let's lessen the influence of PPO.” (26:31—27:34) -Kirk

“Dentistry can be lonely. Leadership can be lonely. Running a business can be lonely. The idea of messing with PPOs can be scary, and I empathize with that. So many people will tell you what to do and not how to do it. So, I'd encourage you, come in, upgrade to the BPA Premium, and we're going to tell you exactly what to do, step by step. We're actually not going to tell you what decision to make. But you'll know what to do after we guide you through which data in which order to pull.” (35:27—35:56) -Dr. Straub

“All of these myths that you have actually aren’t true. Like, you're thinking everyone will leave. They don't. You're thinking, ‘Oh, this isn't going to work for my practice.’ It will. Here's why. When you look at the data . . . it all works.” (37:57—38:14) -Kirk

“The issue is not PPOs. The real issue is how many people come to you and pay your full fee. That's the crux of the issue.” (38:58—39:07) -Kirk

“This is the scorecard you have to do now before your practice gets bigger. People build 19-operatory practices to serve this monster, and they've never done the homework of like, ‘How is this working for my practice?’ So, I like the idea of what Barrett just said. Let's get this on paper before I start doing any dentistry. You want a treatment plan for a patient. You don't want to just do dentistry. It’s the same thing with your life and your practice.” (41:46—42:11) -Kirk

“Verbal skills matter. What happens in really great practices is the people that answer the phone are the best in the industry in how to answer questions. So, you've got to get good at that. You've got to know what to say and what questions to ask. That's why you have to conduct regular phone training, because your team members have to understand, ‘Are you in my network?’ and, ‘Do you accept my insurance?’ — it's not the same question. The person who answers your phone has to say, ‘I love that question. Bring it to me. I'm so glad you asked that question.’” (42:27—42:56) -Kirk

“You have to first understand your effort gap. That's number one. That's the big, global picture. It's the ultimate instrument for how you run your business before you get into the PPOs.” (48:28—48:41) -Kirk

“Before you do this, your team has to understand the why. They can't just hear PPOs are bad. Some of them are going to think, ‘Well, my mom is on that PPO. Does that mean she can't come here?’ You have to go slow with your team. They're not going as fast. Having regular conversations around the why will help them implement the how much easier.” (49:01—49:21) -Kirk

Snippets:

0:00 ACT’s TTT, BPA, and Pro Coaching.

2:58 Why this is an important topic.

7:10 Know your gaps.

11:36 Know the basic metrics first.

18:22 Tools and resources in the BPA app.

20:04 The Patient Segment Scorecard.

22:47 Shrink the gap with less energy.

26:30 Know which plan to drop first.

33:21 Practice example: The treatment plan.

38:22 Q&A: Thoughts on a PPO that has a lot of patients and a high write-off.

42:11 Verbal skills matter.

43:29 A great tip from Dr. Christopher Mazzola.

45:27 Practice example: The treatment plan, continued.

48:23 Final takeaways.

49:53 Q&A: How to get ACT’s PPO Roadmap.

51:15 Q&A: Does APV include hygienists?

Dr. Barrett Straub Bio:

Dr. Barrett Straub practices general and sedation dentistry in Port Washington, Wisconsin. He has worked hard to develop his practice into a top-performing, fee-for-service practice that focuses on improving the lives of patients through dentistry.

A graduate of Marquette Dental School, Dr. Straub’s advanced training and CE includes work at the Spear Institute, LVI, DOCS, and as a member of the Milwaukee Study Club. He is a past member of the Wisconsin Dental Association Board of Trustees and was awarded the Marquette Dental School 2017 Young Alumnus of the Year. As a former ACT coaching client that experienced first-hand the transformation that coaching can provide, he is passionate about helping other dentists create the practice they’ve always wanted.

Dr. Straub loves to hunt, golf, and spend winter on the ice, curling. He is married to Katie, with two daughters, Abby and Elizabeth. 
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