You’ve decided that a dental membership plan makes sense for your practice. Good for you! We’re a little biased, but we think membership plans make a whole lot of sense for practices and their patients.
In the past, we’ve talked about the issue of insurance reimbursement changes. We've also discussed how dental membership plans could be more important than ever in our current circumstances. But today, we’re going to speak to those of you who have made the choice already, but are now asking, “What do I do first?” Well, you probably need to start by figuring out what you’ll charge! Here’s how to price your dental membership plan.
What Services Do You Offer in Your Dental Membership Plan?
The clear place to begin is with your services. Decide what you want to include as part of your dental membership plan. The general baseline that almost everyone starts with is two cleanings, two exams, and one set of x-rays a year.
Think about your patient demographics as you carry out this part of the process. Do you practice in an area with a higher-than-average rate of cosmetic procedures? If so, then a whitening package might be a game-changing addition. However, if most of your patients wouldn’t want a whitening treatment, then they might see your membership plan as having value that doesn’t matter to them, and thus, being unnecessarily expensive for their needs. In the event that you’re unsure, you can always create two plans—one with whitening and one without.
If you count children among your patients, then you may want to add a Child Plan. It is essentially the same as an Adult Plan, but most of our offices add a Fluoride treatment (some add it to the Adult Plan as well).
For practices that offer periodontal services, a Perio Maintenance Plan is a good way to keep those patients on a regular maintenance schedule (three or four times a year). Most practices will do the initial SRP outside of the Plan. Then, they'll put the patient on a Perio Plan to cover the regular maintenance. If the patient gets to the point where they no longer need the specialized periodontal visits, they can switch to the Adult Plan.
Determining Membership Plan Pricing
Once you’ve decided what you’d like to incorporate into your membership plan, you should think about your usual and customary rates. Analyze those to decide what you need to make monthly to get paid appropriately for your work.
We have a downloadable guide that will help you do this: Making Dental Memberships Better.
[link for above blue text: where guide can be downloaded]
But here is a useful table for calculating:
[Service Code]: [Service Price] x [Number of Times Offered Annually in Plan] = [Value for Plan]
Remember to multiply the UCR by the number of times the service will be included in the membership plan, so as to reach the full annual price. After you’ve calculated the value each service brings to the plan annually, add them all up.
But this isn’t actually what you’ll charge for your dental membership plan. You’ll likely reduce that total by around 15% (or at least, that’s what we’ve noticed many practices doing). It’s good to provide at least $100 in savings so that the program looks good to your patients on paper.
If you’re thinking, “Um, why would I want to be paid less for my services?” Well, you won’t actually take less home. You’ll take more home. Don’t worry, we’re about to explain!
Remember That Lack of Insurance Plays a Role
When you think about the price your dental membership plan should be, don’t forget that you aren’t dealing with insurance. As our Director of Client Success here at DentalHQ, Nick Lyons sees the various ways a practice can approach membership plans firsthand. “I’ve spoken with some offices that just don’t work with insurance anymore. They have membership plans, so if they drop an insurance carrier, they often only have to keep about 60% of those patients, or they can retain 100% of their patients by reducing their rates to 60%. This is possible because even with the reduction, they can be making more than they were from insurance.”
Yes, the insurance industry has become that counterproductive for you. (Not to mention the value of the time your team wastes dealing with insurance companies!)
This also makes things better for your patients. Why? Here are just a few reasons:
- Patients pay for what they’re actually getting, instead of paying for high premiums regardless of the care level they need.
- They will have better oral health, as a result of the mindset associated with subscription-based payments—they aren’t going to miss an appointment they already paid for!
- Each patient saves time before and after their appointment, because they don’t need to deal with insurance forms or questions, or even making payments at the checkout desk.
If you need help figuring out how many patients you can afford to lose on a particular insurance plan, we invite you to test out our handy dandy calculator!
[link for above blue text: link to calculator]
Consider Your Goals
Once you’ve contemplated the unique value of each service you plan to include, your patients’ preferences, and the insurance factor, it’s time to think of your own perspective. We’re talking business goals!
After all, as we always say, this is a business! And a big part of running a business is analyzing its needs. Thinking about how to price your dental membership plan, you want to consider whether or not new patients should be the focus. If your practice is looking to grow, a dental membership plan can be an effective marketing technique. There are many patients who believe they can’t go to the dentist because they don’t have insurance or their coverage is lacking. Enter, dental membership plans!
If driving new patients to your doors is the goal, you might price your dental membership plan lower than someone who already has a practice that is bursting at the seams. For them, a dental membership plan may present more of a convenient, subscription-based payment option than anything else. But for you, it can be an enticement that launches your practice into its next exciting phase of growth.
Because dental membership plans can be the incentive a new patient needs.
We asked our founder, Dr. Brett Wells, for his take on how to price your dental membership plan. He offered up an example from one of his own budding locations:
“We’re opening a new office, and we’ve decided to offer a grand opening special. For the first three months we’re open, new patients get a full year worth of membership services for $99. And then it goes to our normal fees when they renew. So we’re really getting aggressive with our fee structure as a way to attract those new uninsured patients.”
Now we know some of you are thinking it, what if I price my dental membership plan this way and then patients leave once the fee increases at renewal?
There is, of course, a likelihood that this will happen with some patients. However, if you are clear upfront about the special, limited-term nature of the offer, and provide the excellent service that you provide, patients will be expecting that price jump when it comes and stick with you.
Research also suggests that the opposite is often true when it comes to subscription-based services. Consumers spend more, happily, when they are paying for a subscription. Just look at the ultimate subscription business: Amazon Prime. According to a report by Consumer Intelligence Research Partners, “While Prime members buy an average of $1,400 a year worth of stuff on Amazon, regular customers only spend $600.” And don’t forget that Amazon just significantly increased its Prime membership fee …
You’re probably going to keep a lot of those patients even once you bump the price up, and in fact, they’re likely to spend more on additional procedures outside their membership plan.
Now, for a Checklist to Price Your Dental Membership Plan
There are many aspects to consider when you are thinking about how to price your dental membership plans. The most important thing is to analyze all of the factors specific to your business.
Here’s a recap on the approach we think you should follow:
- Think about your patient demographics
- Decide what services you’ll include in your plan
- Calculate their combined value
- Take into account the benefits of dropping or reducing use of PPOs
- Use our calculator to determine the percentage of patients you can lose while still improving ROI
- Outline your goals for your practice
- Nail down a discount for your dental membership plan based on those goals
And voila! You’ve got a monthly and annual rate in mind to price your dental membership plan.
Next up, you’ll need to think about how to market it. But don’t worry, we’ve got you covered there too! ;)