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EPISODE 92: Are You In My Network?

Stacy Phillips, CFP® joins Casey and Jarrod to discuss the upsides and downsides of insurance plans. Hear from the experts about how removing certain plans can benefit your practice.

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EPISODE 92 TRANSCRIPTION

Announcer:
Hello, everyone. Welcome to The Millionaire Dentist podcast brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry, finances, and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.

Casey Hiers:
Hello and welcome. This is Casey Hiers back at it, the Millionaire Dentist podcast. In studio, we have co-hosts Jarrod Bridgeman. And we have a special guest, Stacey Phillips, one of our CFPs here, and a certified financial planner. I'm actually not in studio boys. I am in the middle of the country, flyover country, as they say, presenting some continuing education to a room full of practice owners actually, but glad we're getting to touch on this topic today.

Jarrod Bridgeman:
Me as well. It's pretty exciting for you to be able to get back out there, I think. Isn't it?

Casey Hiers:
Oh sure. No, it's fun to kiss hands and shake babies. Is that right?

Jarrod Bridgeman:
I think so, yeah. So I know our topic today is something that Stacy is very, very familiar with. We're talking about insurances, and are you in my network? Is that right?

Stacy Phillips:
Well, that's the notes that you wrote down, Jarrod. So, I figured I would just blow the whole thing up and go a different direction with it. You know how it is.

Jarrod Bridgeman:
Yeah. You do you.

Casey Hiers:
When I first saw, are you in my network? You know, I'm starting to think like LinkedIn, Facebook, Instagram, I don't have Facebook or Instagram. So I was a little nervous. So we're talking insurance, okay, I feel better.

Jarrod Bridgeman:
The old school cell phone plans was my initial thought.

Stacy Phillips:
I've never seen that movie either the network, the network,

Jarrod Bridgeman:
Sandra Bullock. She's a cutie.

Casey Hiers:
So Stacy, tell us what you want to talk about.

Stacy Phillips:
I think I would start off with a question to you, Casey. What does every dental practitioner think they want?

Casey Hiers:
What does every dental practitioner think that they want? You know, a lot of them tell me of all the things that they want as you start to go down that line, what ultimately gets them, what they think they want. They think it's more production. They think if they can get more production, then they can fill in the blank, right? Get more money, get a boat, get all the things that they may want. But to get that, the common answer I hear is, how can I get more production? How can I get more patients? How can we get more production? Is that kind of what you're going for?

Stacy Phillips:
That hit the nail right on the head right there.

Jarrod Bridgeman:
So what does more production tend to mean?

Stacy Phillips:
Well, ideally, it means more money in the long run in theory. So yeah, that's a great answer to the question and it's understandable. I mean, thinking about it, if you're a younger dentist and maybe you started your practice from scratch, the most important thing to you is upping your amount of new patients. And one easier way to do that is to start bringing in insurance plans to your practice.

Jarrod Bridgeman:
Right, that's a very good way. Cause you know, most people, myself included will look into whatever program they have and look, and they type in their area code and stuff. And like here's the list of people that match you.

Stacy Phillips:
Right. So that's the, the good side of it is you're bringing in more new patients to your practice. The downside is there might be a huge write-off from that insurance company. So whatever you...

Casey Hiers:
So Stacy, Stacy, you've probably heard this before, but, but part of the CE I'm giving, we actually go through a case study and we touch on insurance, insurance plans and it walks people through the, almost like the circle of life of somebody who's a high achiever. They want to be a dentist. They graduated dental school. Then they're an associate for a couple of years. Well, it's time to, to be an owner because that's just what you're supposed to do as a high achiever. So they become that owner. Some of them you're talking a million dollars in debt, or they will renovate an old practice and make it really, really nice or, you know, just borrow as much as they possibly can. And so in that circle of life, at that point, they've got all this debt, they're young, they're ready to practice dentistry. So then what's the next logical step?

Stacy Phillips:
Absolutely bringing those new patients in the practice. And they find out

Casey Hiers:
Except every insurance under the sun. Right.

Stacy Phillips:
That's right, exactly. Right. You know, I call it, it's kind of like a lifecycle for me. I call it the vicious insurance life cycle. So it starts with, okay, I need more production. So in order to get that, I need new patients. So how do I get new patients? I'm going to add insurance. So I do that, I start bringing in a nice you know, healthy amount of new patients. Then I start asking myself questions, well, how much is too much for insurance? What, what effect is the insurance having on my practice?

Jarrod Bridgeman:
[inaudible 00:04:54] in my mind I, you know, especially when you're first starting off, you, you don't have the life lessons or the business expertise quite yet to realize you may or may not be getting ripped off. It's all you're seeing is, oh, I am making some money. I am bringing new clients. So their initial thought maybe, oh, maybe adding more insurances will help.

Stacy Phillips:
And at some point, a lot of people that we deal with get to a point where they feel like they're running around on roller skates in their practice. And that a lot of that is due to bringing on tons of insurance. And, you know, obviously, that brings a lot of new patients. So when you get to that point where you're running around like a crazy person, then you start asking myself, well, how do I get out of the insurance?

Jarrod Bridgeman:
Right.

Stacy Phillips:
And that is a very difficult question. It's not easy to do. And it does not happen overnight.

Jarrod Bridgeman:
We just can't call them up?

Stacy Phillips:
So that no, you can not. So that kind of completes my vicious cycle of insurance and the thought process that goes into all of this over time.

Casey Hiers:
And Stacy I'll add to that. Typically, they realize, cause you mentioned then they realize insurances may be a problem. They're going to have to address it. I would say sometimes within four to 14 years. Right. Kind of in that middle part of the career. And it just depends on when they have that awareness, but ultimately they're short with their staff, right? They're not spending time with their patients. They're stressed out at home. And so they finally look up and realize I'm cranky. Dentistry's not what I thought it was. I'm not making and saving what I thought I would. And everybody's overworked in my practice. I'm bringing it home. That's what all here is when that awareness kicks in is when one of those ships or two of those ships sort of fall. And somebody has that aha moment of this is not sustainable.

Stacy Phillips:
That's correct and that's when the conversations start happening of what if I started to drop some of these insurance plans? Well, obviously that kind of frees people up a little bit in the practice. If they're, you know, really going, you know, a hundred percent and struggling that will kind of free up a little bit of time and kind of helps everybody.

Jarrod Bridgeman:
Now Stacy, what are some fears do you think that some practice owners may have of not wanting to drop an insurance? Like are there some standard fears that they may be like, ah, this is the reason why I feel like I got to keep it around.

Stacy Phillips:
Well, I mean, a lot of times there might be a particular carrier in a practice that is a huge percentage of your overall business. You have to think very seriously about dropping the insurance plan. You know, when it's a large portion of your business. Now the key is like I said, it's not going to happen overnight. So it's good to have outside help. There are companies out there that will help you renegotiate rates or help you decide you know, which insurances I should drop. Obviously, we here at Four Quadrants do a lot of that type of analytics as well. Helping people decide, you know, which carriers you could drop and when we usually start with the smaller ones, ones that are just a small percentage of your business to where it's not really going to make a huge difference if you drop those. And then we're looking at the ones that, where you have the largest write off as well. And, you know, can we drop those?

Casey Hiers:
Well...and Jared, to go off your question you know, the biggest issue, problem or fear is that the practice owner is scared to death, that they won't be busy. All their patients will leave them. So what's worse being overworked, feeling like you're on skates, but you're busy versus you look up and you're not busy. And there's a real fear and anxiety about that. We've touched on.

Jarrod Bridgeman:
I feel like I also feel like you know, because these people are professionals as well and in higher achievers often also feel like they can't let other people down. So you know, sometimes there's that fear of letting these other patients down when, even for the patient themselves, sometimes it's just a, you could recommend them to somebody else.

Casey Hiers:
I was talking to somebody who, they were former military and they were accepting some plans with military. They realized they needed to drop them, but psychologically that was important to them. Right. They wanted to give back and then they ultimately realize, listen, I can, I can help people on my own terms, but it's just not sustainable to keep this insurance plan right now with, with, you know, how many people are on it. And then the collection ratio, which is pennies on the dollar.

Stacy Phillips:
And to your point, Casey, the first thought that comes to mind when somebody thinks about dropping a carrier is in their mind, they think they're going to lose all those patients.

Casey Hiers:
Yep.

Stacy Phillips:
In reality, that's not the way it happens. And a lot of times they may keep you know, a good majority of those. I mean, in getting back, I'll throw a Jared of bone here with his little title of, are you in-network? Just because you're not in-network, doesn't mean you don't have any benefits. The carriers have out-of-network benefits a lot of times as well. So you know, your patient can still potentially use their insurance at your practice even though you're not in-network.

Casey Hiers:
Well, that's exactly, that's exactly right. I just had a conversation with the guy. They dropped the insurance, the office still helps the patient fill out all the forms to make sure that they're submitting it, but the office is getting paid upfront.

Stacy Phillips:
And so at that point, the, the, which, you know, most of you guys would know this. They they're getting reimbursed.

Jarrod Bridgeman:
Yeah.

Stacy Phillips:
Okay.

Casey Hiers:
But yes, but yeah, Stacy for you know, people think they're going to lose all of their patients. And again, every situation is very unique. That being said, most of the time, if you drop an insurance you'll keep 30 or 40% of those patients. And you know, spoiler alert, those are probably the good patients, right?

Stacy Phillips:
Absolutely.

Casey Hiers:
The ones that are just shopping insurances. I mean, that's a broad, that's a broad stroke there, but we've seen that ourselves with clients where they'll keep 30, 40, 45% of the patients and it's the right patient. So then what happens more time is spent with them a better case, acceptance, you're doing bigger and better cases that you enjoy. And ultimately there's a gain financially from that. That's not a rubber stamp salute, you know, a result, but that's, that's very possible.

Stacy Phillips:
Yeah. And that happens all the time. Yeah because you're right. Even in the worst-case scenarios typically you know, you know, 30, 40% of the people stay.

Jarrod Bridgeman:
And you're getting more out of them.

Stacy Phillips:
Sure.

Jarrod Bridgeman:
They're, they're getting more than likely because you have more free time, better service, right?

Stacy Phillips:
Yeah. There's a lot of benefits to it. It sounds easy when you talk about, oh yeah. Let's just drop them. We're going to keep 40%. This is easy,

Jarrod Bridgeman:
But it's not.

Stacy Phillips:
It's not.

Casey Hiers:
Well. And so to the younger dentists, understand what type of practice you want and what practice you're buying. A lot of times they just say, I like the building. I like the part of town. I like the dentist. So I'm going to buy it. They don't look under the hood, know what you want. Do you want to be per service practice? Do you want more of an insurance practice? Do you want to balance, do you want a volume shop? Do you want, I mean, there's some people, there are very concierge practice, very high end. I mean, they are the most expensive and, and they sell themselves that way, but that's what they want. They'd rather bigger cases. Right. And so to the younger folks, know what business model you want have those conversations. Instead of just, I like the building, I like the part of town. And I really like that the older dentist I'm going to buy it from, and then they go in there and the business model is, is not pref, preferred.

Stacy Phillips:
That's correct. And sometimes it's kind of depends on where you're located as to you know, do, do I don't, I have insurance and there's obviously more things that go into it, but

Jarrod Bridgeman:
Yeah, because of the whole rural thing, right. Casey,

Casey Hiers:
Rural?

Jarrod Bridgeman:
Bringing it back from last week's episode.

Stacy Phillips:
And the other thing, what happens is when you get a lot of insurance in your practice, it's not this, you're riding off you know, a huge percentage. But along with that, you're constantly trying to chase down the reimbursement. It's not like easy, automatic. They come in and boom, you get your payment, that's it doesn't work that way. So then your staff is spending more time, you know, calling insurance companies, trying to track down the payments. It's very taxing on the practice overall, when you have a large amount of insurance.

Jarrod Bridgeman:
Yeah. They're spending an awful lot of their time doing admin stuff that they don't miss. What I need to do. They're working more for less.

Stacy Phillips:
Yes. And like I said, there are companies out there that help you renegotiate or help you decide you know, to drop insurances. There are also companies out there who will process the insurance payments for you.

Jarrod Bridgeman:
So if anybody out there listening is starting to feel that, that burn of insurances, you suggest having them reach out to a company like that right?

Stacy Phillips:
Yeah. And if you look on our podcasts list, I know Casey has done one in the past with one of those companies that, that does the insurance processing for you, which kind of frees up your staff.

Casey Hiers:
Yeah. I mean, we don't directly in endorse any one company by any means. We have familiarity with eAssist. We have familiarity with a mock my PPO, right? There's other ones out there. And we're not saying one is better than the other. We're familiar with a couple, one of the founders and CEOs who was a dentist as well, started eAssist. And, and again, it's varying degrees of success, depending on a ton of variables. It's different for everyone. But what I encourage people to do is have a plan. If you don't like your current insurance situation, take control of it, right? Find some of these companies better-negotiated fees. I mean, for our clients, we're looking at this from all angles and coming up with a plan and a strategy because we realize sometimes it's not sustainable. Something has to be done, but we've touched on this topic a handful of times, it's one of the hottest topics on here.

Stacy Phillips:
Another thing too, that people tend to forget about is what I would characterize as the end game. So another effect that insurance has is, when you go to sell your practice, a fee for service practice is obviously a lot more valuable to someone than a practice that is heavily involved in insurance. So you kind of have to think ahead, what do I want my practice to look like when I'm at the point of retiring? And obviously, if you can be more on the fee-for-service side, then it's going to be beneficial for you when you sell.

Jarrod Bridgeman:
Well, Stacy, I think it's all the time we got for today. I really appreciate you coming on here, and Casey coming on as well, keep an eye out as we drop more podcasts throughout the year.

Casey Hiers:
Thanks, Stacy.

Stacy Phillips:
Appreciate it guys.

Announcer:
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener for tuning in The Millionaire Dentist podcast is brought to you by Four Quadrants Advisory. To see if they might be a good fit for you and your practice, go on over to fourquadrantsadvisory.com and see why year after year, they retain over 95% of their clients. Thank you again for joining us, and we'll see you next time.