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Academy of Dental Management Consultants Corner: Is fee-for-service dentistry becoming extinct?

Dental Products ReportDental Products Report October 2015
Volume 40
Issue 10

With a boom in group practices and changes in insurance sweeping over the dental landscape, we asked members of the Academy of Dental Management Consultants for their views on their thoughts on the current and future states of fee-for-service (FFS) dentistry. Is it stable? Is it going away?

Click on the numbers below to see opinions and predictions for the future from Lois Banta, Teresa Duncan, Ginny Hegarty, Dr. Steven Katz, Linda Miles, Debra Engelhardt-Nash, and Tim Twigg.

I feel strongly that FFS dentistry is NOT going away. I truly believe our industry is focused too much on fear-based decisions and the insurance industry is planting seeds to feed the frenzy in dentists' minds that the only way to go is to participate as a provider on their plans. This presents a financial conundrum as the reimbursements offered have decreased over the past few years and are putting dental practices at financial risk while overhead costs have increased year after year. Dentists and their teams would benefit greatly in increasing their communication skills and focus on the dentistry that is in the patient's best interest and offer exceptional customer service.

Lois Banta
Banta Consulting, Inc.

While FFS will always have a place in offices, we cannot deny the trend of PPO coverage and how it is affecting our practices. I've spoken to a good number of dentists who are adamant about staying off insurance lists. However, this is not the majority of practicing dentists. Plan recruiters in many areas routinely deny fee schedule negotiations and let providers who threaten to leave a PPO walk. This only happens in a PPO-dominated environment. Patients will vote with their wallets this is American consumer behavior. What will separate successful offices is the ability to provide quality service and a great patient experience. High-quality dentistry and PPOs are not mutually exclusive. There are plenty of practices have found the formula for profitability and participation. Half the battle is accepting that your business model must shift to accommodate industry changes. 

Teresa Duncan
Odyssey Management

Is FFS dentistry as we know it going away? That depends I think it needs to be a personal and conscious decision for every practice owner.

There are some folks who are doing their Chicken Little best to convince everyone that the sky is falling. However, I believe there will always be multiple business models that can and will support successful practice. Not all patients have the same needs, wants, and values toward dentistry. Multiple practice models can and should exist to best serve all patients.

The keys to success are clarity and focus: Identify your chosen model, then make certain that your team understands your philosophy and your passion and has the communication skills to create and sustain success in your chosen model of practice.

Private, FFS dentistry requires a relentless dedication to delivering a superior experience for your patients and your team. Those who maintain a business as usual approach to FFS dentistry will find themselves competing with corporate and PPO practices, and struggling. Private FFS practices can’t compete on price. It’s that simple.

You can’t be everyone’s dentist. It’s your call. Differentiate, communicate, and thrive.

Ginny Hegarty, SPHR

All factors seem to point toward the ideal practice of the future as being a PPO-driven model. The challenge for these practices will be to maximize their patients’ insurance benefits. In order for these practices to reach their full potential, however, they will need to adopt the skills and strategies that make current successful FFS practices less benefits-driven. Exhausting insurance benefits should not be seen as an obstacle to increased production, but instead as an opportunity to inspire patients to desire elective and comprehensive care independent of insurance coverage.

The success of the FFS model is dependent on constantly staying ahead of current trends. Understanding the need to create an incredibly caring culture, incorporating the latest technology, and understanding the evolution of our patients perceived needs are all necessary to maintain a competitive edge when exceeding patients’ insurance benefits. It is important to embrace the notion that as we increase the perceived value of our care, we are able to lower the patients’ perception of cost of that care.

We can accomplish this through creating a greater degree of understanding with our patients. Our patients come to us with complaints about conditions in their mouths a cavity, a cracked tooth, or bleeding gums. But these are not what motivate these patients to seek care. How these conditions affect their lives is what motivates them to seek treatment.

Does the toothache distract them at work, or does it cause them to lose patience with their child when working on their homework together? Does the missing tooth prevent an individual from enjoying their food and discourage them from going to restaurants? Do the chipped or discolored teeth impact on business and social relationships by causing embarrassment or loss of confidence? When we redirect our treatment to solving these emotional effects of the dental conditions, we are able to see a much higher degree of interest and engagement of our patients in treatment and often this level of care will far exceed what would have been done with insurance coverage.

Thus, the FFS model is NOT going away. The challenge is to master the verbal skills on which it depends and to incorporate this deeper level of understanding to differentiate our practices and exceed patients’ expectations of care. If we can embrace these philosophical differences from the norm, then we will ensure that FFS will be around for many years to come.

Steven M. Katz, DMD, MAGD

In my opinion, FFS dentistry is not completely going away as there are those die-hard FFS practices that will never jump on board the insurance bandwagon. For them, it would be like giving up computers for a typewriter! And there will always be about 15 to 20% of the population who are cream of the crop patients. They don’t have dental insurance and they not only want but demand and expect the best. They are also willing to pay top dollar for it.

While I am not implying that insurance-based practices are doing less-than-ideal dentistry, it is my opinion that the only way to survive long term with reduced reimbursements and being on many plans is simply more patients per provider hour and by cutting costs. That means reducing the amount of time the dentist spends doing each procedure or eliminating some of the present doctor-to-patient communication. This could also mean using less expensive materials, hiring staff at lower salaries and fewer benefits, using cheaper labs, and not reinvesting in their facility and technology updates as often.

In the past few and next few years, I see more and more dentists going from FFS to accepting some plans as a means of survival if they are in a community that is 80% insurance-based. In other words, those TOTAL FFS practices are declining, which is the bright spot for the diehards. If 30 or 50% of the once-total FFS practices give up, that leaves an even greater number of patients for those who would rather hang up their handpiece than be on any plans.

Linda Miles

FFS dentistry isn’t going away, but it has become more of a deliberate effort for those dentists who want to provide FFS care to differentiate themselves to their patients and the communities they serve. Those offices that continue to offer FFS are finding ways to set themselves apart from other types of care dentistry restricted by insurance limitations, or corporate style mega-practices offering lower fee dentistry.

Those offices invest in branding themselves as THE practice to visit for certain types of care such as cosmetic dentistry, and implant treatment or other appearance enhancing procedures. Their practice image and internal patient care protocols are consistent with the type of patients they seek to attract. Choosing treatment based on insurance allowances, and “price” is minimized and benefits of care is optimized. These types of offices have lessened, but are still thriving.

The difficulty for some practices is that they present FFS dentistry as a “by the way” part of their office. The doctor and team do not expect patients to accept FFS dentistry and tend to downplay or minimize introducing FFS treatment to their patients. A culture of FFS bias begins to emerge and it emerges in the dental office, not in the patients’ minds.

FFS dentistry isn’t going away, but it is being ignored by many dental offices who feel bound by insurance limitations and perceived financial restrictions.

Debra Engelhardt-Nash

I do not believe that FFS dentistry is dead. That being said, I do think FFS dentistry will represent a much smaller piece of the overall dental services delivery system in the future.

It is estimated that approximately 40% of people in the United States do not have dental insurance. While some represent the underprivileged and underserved, many others are actually those who are well-off financially and care about quality and their own health and well-being. This is the primary market and the niche for FFS dentistry and a portion of the 60% who have insurance will still have plans with latitude and reimbursement schedules that can fit nicely in the FFS model.

As we have seen, and was predicted by Avrom King years ago, the dental delivery system has evolved (and continues to evolve) into three distinct segments - the cost-conscious, the quality-oriented, and convenience.

This is not unique to dentistry. Most other businesses/industries have already faced this shifting marketing and business challenge. For example: Walmart serves the cost conscious; Seven-Eleven serves the convenience; and Nordstrom serves the quality conscious.

This doesn’t mean they won’t sell to certain people it’s just that their marketing, branding and primary focus is to a certain segment. They recognize that they can’t be all things to all people.

Thriving as a FFS dentist requires this same type of clarification of vision, dedication to purpose and quality, and the execution of a well thought out business and marketing plan that will truly set the practice apart for patients who want, can afford, and expect quality care and a quality experience.

Tim Twigg

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