Why Your Practice Struggles to Transition to Fee-for-Service

Transitioning from an insurance-based model to a Fee-for-Service model is a transformative step for any dental practice. This transition often leads to increased autonomy, higher quality of care, and a more sustainable business model in the long run. However, not all practices are equally positioned to make this shift. If you've ever found yourself wondering why a neighboring practice has successfully gone out of network while you're still tied to insurance contracts, you're not alone. This comprehensive guide will explore five key reasons some practices transition more easily to FFS and outline five critical steps your practice must take to prepare for this transition.

5 Reasons Some Practices Transition to FFS More Easily

1. Monthly New Patient Volume

The foundation of any successful transition to Fee for service lies in a practice's ability to consistently attract and retain new patients. A strong new patient flow is essential for mitigating the loss of patients who may leave due to the switch from insurance-based payments. Practices with a solid marketing strategy, such as effective search engine optimization (SEO), online reputation management, and targeted paid search advertising, are better equipped to maintain or even increase their patient base during the transition.

According to dental economics, the average practice in the United States had a patient attrition rate of around 17% each year. However, this is manageable if the practice has a healthy influx of new patients. Practices with a robust online presence and strong community engagement are better positioned to weather this initial attrition and continue to grow after switching to Fee for Service. 

2. Established Reputation and Strong Patient Relationships

A practice with a strong reputation and deeply rooted patient relationships will find it easier to transition to FFS. Patients who trust their dentist and value the quality of care provided are less likely to leave due to a change in payment models. These relationships are often the result of years of investment in patient care, communication, and community involvement.

Research published in the Journal of the American Dental Association (JADA) suggests that patient loyalty is closely linked to the perceived value of care, which includes factors such as the dentist's expertise, the quality of patient interactions, and the overall patient experience. Practices with high patient satisfaction scores and strong word-of-mouth referrals are more resilient during the transition to FFS.

3. Comprehensive Service Offerings

Practices that offer a broad range of services are more attractive to patients willing to pay out of pocket for specialized care. The ability to provide comprehensive care—such as advanced cosmetic procedures, orthodontics, implants, or sedation dentistry—within the same practice increases convenience and continuity for patients. This is particularly appealing to patients who prioritize quality and are willing to invest in their dental health.

Be sure to showcase that you are offering advanced services in a single location, and lean heavily on what you excel at. Are you gifted in completing full-mouth cases? Implants? Become an expert and be a leader in your field so that those patients who want exceptional care seek you out.

4. Geographic and Demographic Factors

The location of a dental practice plays a significant role in its ability to transition to FFS. Practices situated in affluent areas where patients have higher disposable incomes are more likely to succeed with an FFS model. Additionally, practices serving a patient demographic that values personalized care and convenience over cost savings tend to fare better in a non-insurance-based model.

5. Insurance Limitations Impact You and Your Patients

It's no secret that dental insurance has not kept up with the times. Patients or their employers pay premiums for coverage that looks more like a discount plan. Typically, only preventive procedures are covered at 100% in-network and coverage for major dental can range from 50-80% or nothing at all.

Waiting limits and maximums can actually put patients at risk, and who will they blame if their condition worsens? Usually not the insurance company—they will likely blame you. Taking a "wait and see" approach to dental conditions can almost always lead to undesirable consequences.

5 Steps to Prepare Your Practice for the Transition to Fee for Service

1. Assess and Enhance Your New Patient Acquisition Strategy

Before making the switch to FFS, it's essential to evaluate and strengthen your new patient acquisition strategy because you will likely lose some patients, no matter how passionate and communicative you are about your transition.

Enhancements should include optimizing your online presence, leveraging your existing patient base, and engaging in community outreach. Effective SEO, online reviews, and targeted marketing campaigns can help increase your practice's visibility and attract a steady stream of new patients. We generally recommend securing an acquisition rate of at least 30 new patients per doctor each month before beginning the transition.

2. Invest in the Patient Experience

People like nice things. Small touches that help relieve stress or make patients feel like a trip to the dental office is about giving them the best care will leave them happy and satisfied with their decision to do business with you.

Some dental practices offer amenities like a tea or coffee bar, neck pillows, blankets, scented towels and a choice of music or movies to help the patient see a trip to the dental office as a pampering part of self-care.

Addressing patients by name and asking about their lives helps patients see that you care more about their experience in contrast to asking the traditional name and date of birth you find in other dental and medical settings.

Sharing any advancements in technology or new certifications in specialty treatments will also help patients see you are re-investing in them and their dental health.

3. Evaluate and Expand Your Service Offerings

To thrive in an FFS environment, your practice needs to offer services that justify out-of-pocket expenses. Consider expanding your offerings to include advanced treatments that are in high demand, such as cosmetic dentistry, dental implants, and sedation dentistry. These services not only attract patients willing to pay for premium care but also differentiate your practice in a competitive market.

Because dental insurance companies pay a fraction of your established fees, you could be forced to cut corners with materials or time to keep your practice profitable. By focusing on advanced treatment and services often ignored by insurance companies, you can mitigate some of the cost of patient attrition.

4. Communicate, Communicate, Communicate

Transitioning to FFS requires clear, proactive communication with your patients. It's important to educate them about the benefits of FFS, such as more personalized care, fewer rushed appointments, and the freedom to choose the best treatment options without insurance constraints. This communication should be delivered through multiple channels, including in-person discussions, emails, newsletters, and your practice's website.

Staff training is also critical during this period. Your team needs to be well-prepared to address patient concerns and explain the value proposition of the FFS model. Providing high-quality, empathetic patient interactions will help maintain patient trust and loyalty during the transition. 

Having the right language to showcase the benefits of FFS is essential. Whether you learn that from a practice coach, through research of your own, or in future blog posts we write, practicing and having confidence in your communication with patients is essential.

Patients don't care about the benefits to the practice. Making it about the benefits to them will be an integral piece of winning them over. 

5. Value-Added Services

You could also try some value-added service offerings by offering a discounted membership plan, where uninsured patients receive a 10-15% discount to pay up-front for their routine dental cleanings, exams, and x-rays. Membership plans also offer discounts on other services like restorative and cosmetic procedures. The discount will be far less than the hit you take from insurance companies and will be a meaningful gesture for your patients and their pocketbooks.

Programs like Whitening for Life also incentivize patients to maintain their routine appointments by offering free whitening trays and a tube of gel yearly when they keep up with their recall visits. Custom trays and whitening gel are relatively low-cost items for your practice, but they are a meaningful perk for patients. By keeping patients in your hygiene chair, you are able to diagnose production procedures to keep up the bottom line.