You want to fill your practice with cash-paying patients. But being uninsured doesn't mean more loyalty and more treatment! In this episode, Kirk Behrendt brings back Dave Monahan, founder and CEO of Kleer, to share some shocking data on cash-paying patients and why you need to invest in a membership plan for your practice. To learn how to increase the number of ideal, cash-paying patients, listen to Episode 931 of The Best Practices Show!
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Main Takeaways:
Quotes:
“What are offices dealing with right now? They're dealing with a few things. One is that costs have gone up. Insurance reimbursements are stagnant, as everybody knows, so there's pressure on profit within the offices. I'm not sure if all the offices are seeing it yet, but we're starting to see a little bit of pullback on visitations and treatment acceptance due to economic uncertainty that's out there. So, typically, what we're dealing with when we work with offices is, how do we increase their production — especially their production on the cash side of their business — because the insurance side of the business, they can't do much about. Those reimbursements are those reimbursements, and you're sort of stuck.” (2:18— 2:53) -Dave
“When we were working with [Pearl Street Dental Partners], basically, they came to us with very much the problem we just went over. They were having trouble getting their uninsured patients to come in. When they did come in, they were having trouble getting them to accept the care they needed. They also had trouble retaining those cash patients. They had a lot of dormant cash patients or patients that never came back after that first visit. So, the net for us was we were trying to figure out, how can we help them drive better behavior and get better care to those uninsured patients and start to improve both the care obviously the patient is getting, but also on the other side, the visits, the treatment acceptance, and the production on the Pearl Street side.” (4:31—5:12) -Dave
“[Pearl Street Dental Partners] has 46 offices. We designed the care plans for each of those offices differently. So, each office has a different demographic they're serving from a patient perspective. They have different treatment preferences from a doctor's perspective. Some of them have different goals of the membership plan. Some will lower the price in order to get more patients to accept it because they know they'll get treatment acceptance on the other side. Other offices like to price it where they're going to be profitable on that base subscription for the care that's included in it. But anyway, we work with each office and design it. Our platform can design them all differently by office level but roll them up organizationally, so you see one result for the whole DSO. So, we built these plans around the offices and we put them in place. It takes about 12 months to get really good data. You want to see a 12-month cycle of the patients coming through the membership. But they've been on our platform for years. So, after a few years, we did the measurements. The visits for the Kleer-Membersy patients, I mentioned it was 1.4 for active uninsured. The Kleer-Membersy patients come in at 3.3 times a year versus 1.4. So, it's a 154% improvement in visitations. On the procedure side, they moved from 2.4 to 5.7. So, a 135% improvement on procedures. Then, on production, they moved from $452 to $1,083. So, a 150% improvement on gross production. And, by the way, that's right around the averages we see on our platform.” (6:16—7:57) -Dave
“If we [considered] 18 months [to be “active patients”], then our numbers would actually get better and better. So, what we try to do is say we believe “active” means I'm coming in on an annual basis. We always want to see a patient at least once a year. That's bare minimum from our perspective of, if you've got a patient that's truly engaged and active in your practice, they're coming in once every 12 months. If we went to the official definition, we would go to 18 months. That would only make those base metrics worse for the office. So, they would drop from let's say the 1.4 visits probably down closer to 1, would be my guess, because the last six months of patients would be even less engaged than those 12 months. So, we try to hold ourselves to a standard, I think, that's a little higher than what you typically would see in the industry.” (8:21—9:08) -Dave
“Going back to those metrics, the 1.4 visits, the 2.4 procedures, and the $452 gross production, that's for an uninsured cash-paying patient not on a membership plan. We basically, if you look at it, more than double all those metrics by moving that cash patient into a membership plan. Now, that's one set of metrics. We also measure the insured patients, and we look at the insured patients from a little bit of a different perspective. Which is, we still measure visits and procedures and gross production, but also collections because gross production doesn't mean a thing for insurance. It's, what did you actually collect? What did they actually pay you? What's your net production on that gross production?” (10:24—11:03) -Dave
“To give you the stats on the insurance side for Pearl Street — we see this over and over again, by the way. So, visits, procedures, and gross production, Kleer-Membersy patient versus an insured patient is almost exactly the same. Why is that? That's because they have coverage, they're committing to care, they have care included in their subscription or their insurance, and so they take advantage of it. So, in Pearl Street's example, Kleer-Membersy patients came in 3.3 times a year. An insured patient came in 3.1 times a year. So, a negligible difference. Now, procedures, a Kleer-Membersy patient accepted 5.7 procedures. An insured patient accepted 5.9. Again, negligible. Pretty much the same. Whereas production, the Kleer-Membersy patients were a little above, $1,083 versus $968. Now, here's the difference. It's exactly what you said. The insured patient's discount off of that gross production was a little over 40%. You're losing 40% of that $968. On the Kleer-Membersy side, the average discount they give, like when you do all the blending of the subscription — the included cleaning, exams, X-rays, and then the treatment that's accepted after that — is right around 17%, 18% discount is what you end up providing. So, if you now take a big step back, if you're uninsured and moving to Kleer-Membersy, you double everything — and all you do is provide a little bit of a discount to get that compared to insurance. You save about 25%, 30% from a collection standpoint versus an insurance plan.” (11:04—12:47) -Dave
“We also measure what are the discounts and collections on an uninsured patient versus a Kleer-Membersy patient. Everybody assumes that your uninsured patients are paying full fee. I hate to break the news — they aren't. So, you're giving day-of-treatment discounts, and we see standards of 10% or even up to 20%. They'll just give it to them. The other thing is the uncollectible on uninsured is fairly high relative to a Kleer-Membersy patient. So, here's the net of it. When you measure the actual discounts given of uninsured patients versus Kleer-Membersy patients, the uninsured patients come in at about a 14% total discount when you compare collections to gross production, and a Kleer-Membersy patient is 15%. You're basically giving the same discount, but you're getting double the production and double the treatment acceptance. So, it's a no-brainer. You just have to really look at the data to understand it, [to] understand what's actually happening and why you need to invest in a membership plan.” (13:20—14:24) -Dave
“I've worked with over 10,000 practices, and the data is incredibly consistent — incredibly consistent. My CTO has a PhD in machine learning, and he is shocked by how consistent the data is. Each one after another gets to the same point . . . So, obviously, we have a membership plan platform. We'll help you design, we'll consult with you, we'll design it, we'll help you implement it, we'll train your team, all that good stuff. We're there with you from day one. We have a customer experience team. You'll be assigned somebody who will be working with you as long as you're on the platform. We do everything you need. It's cookie-cutter, turnkey, and customized for your office. Then, if you are skeptical about it, we actually measure the results. I tell everybody who comes onto the platform, if we're not getting results for you, then just get off the platform. It's that simple. We actually take the data when you integrate on the practice management side. Inside the portal that we give you, it shows you the data. The data I just covered for Pearl Street, you get the same data live on the platform anytime you want to look at it. Like I said, we are totally behind you. If it's not working for you, just don't use the platform anymore. It's that simple. There's a total guarantee embedded in our solution that gives you your data.” (15:13—16:34) -Dave
Snippets:
0:00 Introduction.
1:54 Why these metrics are important.
3:48 Pearl Street case study.
8:08 Active patients, explained.
9:27 Data on uninsured patients versus membership patients.
12:48 Data on discounts for uninsured patients versus membership patients.
14:52 Final thoughts.
16:34 More about Kleer-Membersy.
Dave Monahan Bio:
Dave Monahan is the CEO of Kleer, an advanced, cloud-based platform that enables dentists to easily design and manage their own membership plan and offer it directly to their patients. Kleer is turn-key and free to implement. Their mission is simple: partner with dentists to increase the value of their practices by making dental care accessible and affordable to everyone.