InPractice: The Goetze Dental Blog

A Private Practice’s Guide to In-House Membership Plans

Posted by Rusty Bradbury on Jun 12, 2019 11:04:08 AM

Private dental practices are known for their patient-centered care. They strive to serve their community and keep people healthy. Many practices have begun to implement In-House Membership Plans as an alternative payment solution for patients.

In-House Membership PlansMonthly membership programs give patients an affordable, flexible option to pay for the  dental care they need. Typically, the membership fee will cover standard hygiene visits, along with a discounted fee for any restorative or elective procedures.  As a member of the program, a patient is incentivised to remain a patient within the practice, and their care is unencumbered by any changes in employment or dental insurance coverage.

In-House Membership Plans have gained popularity in recent years. Many corporate dental practices offer membership plans for patients, but private practices can capitalize on them as a tool as well. In fact, membership plans have become a vital source of additional revenue and patient loyalty for practices around the country.

Many dentists still have questions about how discount plans work: the benefits, drawbacks, and management of the program. We’ll go through each of these questions to help you decide if a discount plan is right for your practice.


Benefits of Membership Plans

Discount plans benefit both patients and practices in several ways:

Alternative to Insurance

Patients without insurance may be hesitant to visit the dentist for fear of the expense involved. Membership plans offer a more affordable way to pay for their care. As an alternative to insurance, discount plans might also attract new out-of-network patients who value choice and convenience when choosing their dentist.

Build Patient Loyalty

When patients pay for their membership plan, they are making the statement that they are invested in their care. In other cases, a patient might switch to an insurance provider that places you out-of-network. Membership plans give those patients the opportunity to stay with your practice under a program that makes their care affordable.  

Higher Retention and Case Acceptance

It is human nature that the more we invest in something, the harder it is to abandon it. This is true with membership plans. When patients invest in their oral health by signing up for a membership plan, they are more likely to take advantage of it.

Practices who use membership plans often see higher patient retention rates, fewer cancellations, and higher case acceptance because those patients are more invested in their own care. This, in turn, leads to healthier patients, which is the ultimate goal.

Positive Cash Flow

The nature of dental insurance forces practices to operate from a position of  negative cash flow. That means they receive payment for services after they are rendered. In the case of insurance reimbursement, often many weeks after treatment was provided. . Discount plans provide  practices with positive cash flow, which means they receive payment at the time of or before the procedure. Positive cash flow comes with several benefits, including access to those dollars for payroll, practice or facilities improvements, and any other variable costs in running the business.

Membership plans may be a viable alternative in your practice to traditional insurance, and could provide patients with an accessible way to pay for their care.  


Drawbacks of Membership Plans

Membership plans do not come without their challenges, but they can be overcome with the right tools and planning.

Discounting Services

The first and most obvious concern for dentists is giving up profits by discounting services. Just as you would evaluate adding any new service or product to the practice, the goal is to either save time, save money, or create new revenue. 

In our experience, membership plans have a positive ROI  through patient loyalty, higher retention, and greater case acceptance. Membership plans increase overall practice revenues and offset the discounted fee schedule. As an alternative to insurance in-network fees, with a membership plan you have total control over exactly what you charge by procedure.

Still, it is important for dental practices to measure the effectiveness of membership plans accurately. That brings us to the second challenge.

Managing the Membership Program

If you have decided to incorporate a membership program, there are often hurdles in determining how to administer them effectively and efficiently.

The first hurdle is designing the plan itself. Plans vary from practice to practice, and doctors need to be sure their plan is financially viable. Some practices also offer different membership levels.

Then practices must manage the program, which involves:

  1. Tracking which patients are enrolled in the program
  2. Define procedures to bill them appropriately
  3. Record and account for when patients have used their membership benefits
  4. Measure the efficacy of the program as a whole.

 In short, managing a membership plan has many moving parts, and on top of administering payment and accounting for patients using traditional insurance, can be overwhelming if not structured properly with the right tools.


How to Run a Dental Discount Plan

Private Practices have three options when it comes to administering their dental discount plan.

Use Existing Software

Many practices will try to administer their dental discount plan with their existing practice management software. The problem is that most practice management softwares were designed with insurance processing as the core functionality, and not alternative payment tools. Because of that, it can be tricky to assign membership plans to individual patients or track when they use their included services.

The majority of mainstream practice management applications are structured to either monitor Gross Production or Net Production, not both simultaneously. (If you haven’t read our article on GP vs NP and why it’s important, check it out here LINK) Because of this, in order to effectively monitor and track a membership program, and evaluate its effectiveness for the practice along with that of your in-network insurance plans, all requires some creative accounting acrobatics - typically on spreadsheets outside of the software application. 

Hire a Third-Party Dental Membership Plan Provider

Due to the popularity of membership plans and the difficulty of administering them, there is now an industry of third-party service providers who will run the program for you.

Discount Plan companies, like Smile Advantage, charge several hundred dollars a month, plus take a percentage of your annual membership fees. Third-party services provide a nice service are a common option for practices that become frustrated with their existing dental software. Many practices aren’t aware that there is a third option that gives them the best of both worlds.


EDDSON Dental Practice Management Software

Unlike other practice management tools, EDDSON from Goetze Dental is designed to handle both insurance and membership plans.

With EDDSON, practices can set the conditions for multiple membership plans and assign patients to each plan. EDDSON then keeps track of each patient as they use up their benefits. You’ll know right away how many free services a patient has available, and how much to charge if they are all out.

More importantly, EDDSON knows how to account for membership plans in your business’s finances. It tracks retention rates, new patient sign-ups, and case acceptance rates, so you know exactly how well the plan is performing.

EDDSON understands the complexities of discount plans and helps doctors and their teams manage them. There’s no hassle and no expensive third-party services.


See why our customers love EDDSON Practice Management Software!



Is an In-House Membership Plan Right for Your Practice?

Dental membership plans are gaining popularity for a reason. As the price of dental insurance continues to rise, patients are looking for alternative ways to pay for dental care. Membership plans keep patients healthy and loyal to their favorite practice.

The challenges of running a discount plan can be overcome in several ways. Doctors can either administer the program manually, hire a third-party service firm to manage it, or use a tool like EDDSON for a comprehensive practice management solution.

Membership plans are an excellent option for many private practices. If you’d like to learn more about setting up a plan for your practice, our Goetze practice management specialists are ready to help.

Topics: dental office financing, financing, Patient Care, Finance