David Pier, co-founder of the dental membership company DenVantage, talks with Alex Nottingham, CEO of All-Star Dental Academy, welcomed, about his success with well-designed dental membership plans. David explained that after the 2008 recession, he and his partners knew there had to be a way to stop dentistry from constantly caving to insurance companies and so they looked at membership plans. The problem was that all the plans included deep discounts, so they decided to create a plan that was a benefit to their patients and still profitable for dentists. David will be discussing his membership plans at the All-Star Practice Growth Summit on May 19th and 20th and encourages dentists to learn more about the event at allstardentalacademy.com.
Key Highlights on Dental Membership Plans
[0:00:02] Success with a Well-Designed Membership Plan with David Pier
[0:02:25] The Background of How Membership Plans Got Started
[0:04:07] Key Components of a Dental Membership Plan
[0:07:00] Reducing Overhead Costs and Implementing Membership Programs in Dental Practices
[0:08:57] The Impact of Insurance on Fee-for-Service Dentistry
[0:13:17] Setting Membership Fees and Benefits for Dental Care Plans
[0:15:51] Benefits of Membership Plans for Dentists
[0:18:09] Exploring the Benefits of a Dental Membership Plan
[0:19:4]7 Heading: Automating Membership Plans for Dental Practices – A Conversation with DenVantage
[0:21:26] DenVantage and the All-Star Practice Growth Summit
Notable Quotes on Dental Membership Plans
- In terms of setting fees, I have a thing, I call it do the math. And in terms of that, you want to set your fees such that your monthly fee, we talked already about monthly versus yearly. Your monthly fee basically covers the hygiene. Visit the exams with the doctor. Just the periodic exams, not the initial exams, periodic exams with the doctor.
- As an attorney, we learn about conflicts of interest and I really think that just looking at the insurance situation, it’s a conflict of interest because an insurance company is designed to make maximize profits legally and deny benefits would serve them. But now that puts dentists in a position because they have a standard of care they have to follow, otherwise they lose their license or they can get sued.
- There are a lot of advantages to the monthly fee over the yearly fee. And then, as we said, one of the biggest things was the patients had to have skin in the game.
- The patient can see the benefits of signing up for the membership plan, so initiation fee was important.
- PODCAST: Thriving at Work: One Step to Overcoming Approval Addiction (Getting Permission Statement)
- DenVantage https://denvantage.com/
Call Meg at 207-266-8434 to ask for a free e-book.
About David Pier
David is a co-founder and a client of the dental membership company DenVantage. He and his partners knew there had to be a way to stop dentistry from constantly caving to insurance companies. The success of the membership plan in his practice has motivated him to help other dentists achieve the positive results he and his DenVantage partners have achieved.
About Alex Nottingham JD MBA
Alex is the CEO and Founder of All-Star Dental Academy®. He is a former Tony Robbins top coach and consultant, having worked with companies upwards of $100 million. His passion is to help others create personal wealth and make a positive impact on the people around them. Alex received his Juris Doctor (JD) and Master of Business Administration (MBA) from Florida International University.
Episode Transcript – Dental Membership Plans
Transcript performed by A.I. Please excuse the typos.
[0:00:02] This is dental all stars, where we bring you the best in dentistry on marketing, management, and training.
[0:00:09] ALEX NOTTINGHAM, JD, MBA: Hi, everyone. I’m Alex Nottingham, CEO of All-Star dental academy. And welcome to dental all stars. Our topic is gaining dental freedom through a well designed membership plan. And our guest is David Pierre. David is a co founder and a client of the dental membership company Dent vantage. He and his partners knew there had to be a way to stop dentistry from constantly caving to insurance companies. The success of the membership plan in his practice has motivated him to help other dentists achieve the positive results he and his den vantage partners have achieved.
[0:00:49] ALEX NOTTINGHAM, JD, MBA: David will be joining us at the all star practice growth summit on May 19 and 20th in south Florida to discuss this topic. To learn more about the event, go to All-Star dentalacademy.com. And please welcome David.
[0:01:02] DAVID PIER: Thank you, Alex. I appreciate the opportunity to spend this time with you and to share what has been such a great success to me and my partners with other dentists. I’ve reached the point in my career where giving back is more important.
[0:01:18] ALEX NOTTINGHAM, JD, MBA: I love that. And tell me about this membership plans and Dent vantage and how you got started in this business. I think your bio gives us a little bit of the journey, but I’d love to hear more.
[0:01:31] DAVID PIER: Sure. It really started after 2008. Now, that was when the great recession happened in Maine. Things always go a little bit slower, so it was probably around 2011. We were really feeling the slowdown still, and we felt that there had to be a way to bring on more fee for service patients. We’d never been members of insurance companies, so I’d been looking at membership plans, and Ted Morgan, one of my partners, had also been looking at membership plans.
[0:01:59] DAVID PIER: The problem was, in those days, all the membership plans were deep discount plans. If I want to do a deep discount plan, I might as well just join a PPO. It’s easier. But we’re not a deep discount office. We’re a high quality office and quite frankly, a high fee office. There had to be a way to do a membership plan where it served our patients and was a benefit to our patients, but was still profitable to us.
[0:02:25] DAVID PIER: And that’s how we kind of got together with that thought in mind. And then my partners and I have been we’ve been together as a mastermind for many, many years, where we get together and talk about our practices and how to improve them. And we talked about the membership plans, and we each had different ideas on how the membership plans should be put together. The one thing that we all had in common is it had to be profitable.
[0:02:48] DAVID PIER: So we all went back and applied our different ideas to our practices. And then every month we’d get back together and say, what’s working? What isn’t working? And the things that we found were, like we said, it had to be profitable so we couldn’t set our monthly fees at a rate that was too low to cover our overhead and the cost of the services that we provide. And then the second thing that we found this is interesting that it had to be monthly, and I’ll go into that a little bit more later, but it has to be monthly, not annual.
[0:03:21] DAVID PIER: Many, many membership plans are annual, and it seems like that would be easier to administer. But there are advantages to the monthly plans. As I said, I’ll go into that in a little bit. And the other things are it had to have an initiation fee. And one of the biggest is the patient had to have skin in the game, so the patient had to commit to us to lower our overhead in order to get their benefits.
[0:03:45] DAVID PIER: And that’s something else that I’ll go into, but that’s basically the background of how it got started.
[0:03:52] ALEX NOTTINGHAM, JD, MBA: Now, each of you tried different ways of doing this membership thing, and I guess through trial and error, you came up with something that worked. What did you find you needed, and what were the key components of the dental membership plan?
[0:04:07] DAVID PIER: Okay, one of the ones I’ll say from the start is an initiation fee was important. When I started my plan, I thought that was ridiculous. I thought, why have an impediment to my patients in signing up? I wanted them to sign up. But Ted and Dan, two of the partners, both had initiation fees in their practices, and they both found that that never stopped the patient from signing up. The benefits were so good, and the patient could see the benefits of signing up for the membership plan, so initiation fee was important.
[0:04:39] DAVID PIER: The second thing we found, because I started out promoting a yearly plan, I was not as smart as Ted and Dan, so I started out promoting a yearly plan. And what we found was with the yearly plan, while it’s easier up front, at the end of the year, you’ve got to go back to your patients and sign them up again. Whereas if you do a monthly plan, then every month it’s an automatic rollover. So at the end of the year, it just rolls over to the next year. If you raise your fees, you can raise your fees.
[0:05:10] DAVID PIER: They’re guaranteed for twelve months. But the fee raise, that’s another big thing. If you raise your fees one dollars a month, that’s $12 a year. Patients who are on a yearly program are going to notice a $12 fee increase. Patients on a monthly plan are not going to notice a monthly increase. Additionally, by the monthly plan, because patients are on either a six or a four or a three month preventive care rotation, if they change their appointment for many different reasons, they may get in. They’re supposed to be in four months. It may be five months.
[0:05:46] DAVID PIER: They’ve paid for an extra month to cover some of the benefits that you’re providing for your patients. So there are a lot of advantages to the monthly fee over the yearly fee. And then, as we said, one of the biggest things was the patients had to have skin in the game. And what we found was, in the contract, it says that the patients have guaranteed that they’re going to give us a week’s notice for any appointment changes.
[0:06:11] DAVID PIER: They also have agreed to the idea that if they miss an appointment or don’t give us at least 48 business hours ahead of their appointment, notice, that they’re going to pay a $40 per hour rescheduling fee, and that’s automatic. That alone, Alex, has reduced our missed appointments by 50% over our nonmember patients. It’s been great. And then the other one is they have to prepay for their portions of any treatment being done.
[0:06:44] DAVID PIER: So our AR with these patients is zero. So look at two of our highest overhead things missed appointments and collections, and they’ve eliminated those overheads. So therefore, when we give them the benefit, we’re giving them back what they’ve saved us.
[0:07:00] ALEX NOTTINGHAM, JD, MBA: Because it makes sense if they’re doing monthly, first of all, they don’t even notice it as much as annual. There’s also you have their credit card on file.
[0:07:09] DAVID PIER: Yes.
[0:07:10] ALEX NOTTINGHAM, JD, MBA: And so you can enforce that very easily, whereas before, most offices don’t have a card on file. So if they break appointments or whatnot, it’s not done. Now, we have some verbiage that we do typically, if there’s a broken appointment, that we might give them a way out in the beginning, we’re looking to teach them, not punish them.
[0:07:29] DAVID PIER: Absolutely.
[0:07:30] ALEX NOTTINGHAM, JD, MBA: But I like the fact that you’re saying, look, you got to have skin in the game. We’re going to be giving you a reduced fee. You’re going to be part of our practice. We’re all working together to help. We’re not giving the insurance company money. The money that’s being saved is between us, and we’re taking care of you. So I really like that model. Why do you think it’s critical now? I know memberships have always been important as an option for dental offices. Why now?
[0:07:59] ALEX NOTTINGHAM, JD, MBA: Why now? Is it even more of an issue to pay attention to?
[0:08:03] DAVID PIER: Yeah, thank you for that. As I said that this has created a passion in me to share this, and it’s because I care about our profession. I feel like at my age, I’m in my mid 60s, I’ve really ridden the wave of the best era of dentistry, but I hope that the next era is going to be even better than mine. But it’s not going to be if we keep being overpowered by insurance companies going to Ppos with lower and lower reimbursement rates, more Dsos, taking on accepting those and doing I hate to say it this way, but it’s called two tier dentistry. You can go to a high level fee for service and get high quality care, or you can go to an office that is keeping costs as low as they possibly can and you just can’t do the same level and cover your overhead at doing that.
[0:08:57] DAVID PIER: So that’s one of the reasons why membership plans support fee for service dentistry. It also helps individual dentists compete with the Dsos. So those are two of the main reasons that I feel that membership plans are really important in this age.
[0:09:15] ALEX NOTTINGHAM, JD, MBA: Well, what if you are a dentist that takes many insurance plans, or your all insurance PPO most likely, or even on the HMO side? How would you speak to this?
[0:09:28] DAVID PIER: That’s a hard one and it’s one I’ve heard from actually several dentists that I’ve spoken to when I talk to them about membership plans. I’m in an area where it’s only about 60% of the patients in this area have any dental insurance at all. And about 40% of my patients have insurance in areas where it’s more like 80 or 90%. How do they get into this? The one thing I would say is no matter where you are, no matter what your market is, the 40% of Americans are uninsured when it comes to dentistry. That’s 140,000,000 people.
[0:10:07] DAVID PIER: They’re in your backyard too.
[0:10:09] ALEX NOTTINGHAM, JD, MBA: You said 40%.
[0:10:11] DAVID PIER: 40%. That was the latest thing when I looked it up to get wow to plan for this.
[0:10:18] ALEX NOTTINGHAM, JD, MBA: That’s an interesting insight because we think that it’s the insurance companies that are the issue, the only issue. Well, there’s 60% of the issue, but 40% is just they don’t see the value in doing the dentistry and they don’t have an excuse for the insurance side. So there’s certainly a big opportunity here that’s really great insight to be aware of.
[0:10:42] DAVID PIER: Yeah, there’s one other thing that goes with that, Alex, and that is I taught high level work with composite dentistry, both for myself and courses that I’ve done and also for Bioclare Group with David Clark out in Tacoma, Washington. And these are using composites in ways that are not in the textbook, but are really excellent dentistry and excellent care for our patients. The problem is you can’t do that type of dentistry for usual and customary fees.
[0:11:15] DAVID PIER: So when I teach these courses, one of the saddest things I find is when a dentist says to me, well, I’m a member of a PPO and I’m limited to what I can charge. They can’t provide the best dentistry for their patients because they’re limited by their Ppos. And to me that is just plain wrong.
[0:11:35] ALEX NOTTINGHAM, JD, MBA: As an attorney, we learn about conflicts of interest and I really think that just looking at the insurance situation, it’s a conflict of interest because an insurance company is designed to make maximize profits legally and deny benefits would serve them. But now that puts dentists in a position because they have a standard of care they have to follow, otherwise they lose their license or they can get sued.
[0:12:04] ALEX NOTTINGHAM, JD, MBA: And the other issue is they have a limited amount of money that they have. Are you going to use inferior products no matter who’s paying, no matter what insurance you have? No patient wants to hear, I’m using inferior product in your mouth. I get a car, that’s fine. But your mouth, that’s an issue. So that’s a whole nother area. We can get off on a tangent. We’re going to talk about in the next month or so, we’re going to be launching a wonderful webinar about freedom from insurance. And I know that you’ve had conversations with Eric multiple times. Now we’re going to put this into a webinar to talk about how you can be free of insurance and even if you don’t take insurance, how to optimize your practice to handle these objections that people have and help to educate them. That really, it’s not that bad. It’s not that expensive. If you put it in a situation, somebody’s getting the money. And the reality is the insurance companies are getting the money. And the goal is let’s keep it between the dentist and the patient with respect to the membership fees and benefits, how do you set them?
[0:13:17] DAVID PIER: Okay, first of all, I want to go back to what you just said about insurance companies getting their money legally. That made me chuckle a little bit from that. In terms of setting fees, I have a thing, I call it do the math. And in terms of that, you want to set your fees such that your monthly fee, we talked already about monthly versus yearly. Your monthly fee basically covers the hygiene. Visit the exams with the doctor. Just the periodic exams, not the initial exams, periodic exams with the doctor.
[0:13:55] DAVID PIER: And in general, X rays, the only X rays are not included are usually the CBCts, but other necessary X rays are included. So what I tell people to do is add up what it would cost for a year for someone who comes in twice a year, someone who comes in three times a year for period, or four times a year for period or child. Or if you want to do a team plan, you can do that also. But add up what your annual cost is, divide by twelve, and that is what the normal fee would be.
[0:14:25] DAVID PIER: And then I do recommend reducing that just a little bit. And the reason for reducing it, as I said, is two things. One is these patients are going to cost you less. They don’t have to stop at the front desk every time they leave. They’re not going to call and cancel because their car just needed a new transmission because they’ve already paid for it. So because they’re going to cost you less, you can reduce that a little bit.
[0:14:49] DAVID PIER: But remember about the patient, that’s going to take a little longer to come in. So some patients are going to pay for seven months for their six month preventive care appointment. And some people are going to pay for five months because you can have them come in earlier if you have an opening. So that’s how you set your monthly fee. So in summary, the monthly fee is the cost of your hygiene. Visit periodic exams and x rays and then divided that by twelve and reduce it by a little bit.
[0:15:19] DAVID PIER: So that’s the number one thing. Then the second thing, and this is something that Denvantage really helps our clients with, when you have a form to fill out, it makes it really easy. Benefits to all the other treatment that you do needs to be a dollar amount, not a percentage. That’s something that most plans don’t do. Most plans do the benefits in a percentage. I even had one really good dentist set his membership benefits for all his other work at 25% off.
[0:15:51] DAVID PIER: When you do 25% off, you might as well join a PPO. So what we found is in the eight to 12% range seems to be a good motivating factor, but the reason for dollar amount versus percentage is $180 off on a crown sounds a whole lot better than 10%.
[0:16:11] ALEX NOTTINGHAM, JD, MBA: It’s a fee schedule that they get. Is that what you’re saying? Like everything, certain things have a dollar amount, it’s not a percentage. So X on a crown, X on a veneer implant, whatever it might be, it’s not a percentage, correct? That’s what you’re telling me.
[0:16:25] DAVID PIER: That’s exactly right. Yes, I like that, and that’s important.
[0:16:28] ALEX NOTTINGHAM, JD, MBA: Now, some of our dentists that are frugal might say, well, I’m losing money on this, why should I not just have them pay the entire fee? Because, I mean, what you are doing, and I have to say it, it might be a little offensive, but a lot of veterinarians do this and I like it. You can prepay every month, you get certain benefits, right? Where you get it pays for all the things you have to get with your pet. So what’s nice about it, though, and I think also with dentistry, is people can budget. Here’s my dentistry. And the question is things that come after that’s where you get the discounted part.
[0:17:10] ALEX NOTTINGHAM, JD, MBA: So again, for the frugal dentist who says, I don’t want to give it, what’s the benefit of me giving any discount?
[0:17:17] DAVID PIER: Okay, I’m going to answer that in two ways, and this is a lot from my own experience. Another benefit of having a membership plan is we have found that members accept two and a half times more dentistry than insurance patients or non member patients. So when you talk about that, and let’s just say I’m doing three crowns and I’m going to be giving $500 just round numbers back to my patient on that. When I set my fees, I look at the percentage of my patients who are dead vantage patients and the percent that are insurance or non dead vantage member patients, and I set my fees such that I’m thinking my membership plan, that fee is a fair fee for that patient who’s reducing my overhead.
[0:18:09] DAVID PIER: So by setting my fee that way, I’m happy to give them that benefit. So when I look at it and let’s just say I gave away $15,000 in benefits, let’s just say I’m using 10% for that. In order to give away $15,000 worth of dentist benefits, I had to do $150,000 worth of dentistry. Now, when I do that $150,000 worth of dentistry, two and a half times that are divided by two and a half is the amount of dentistry I would have done without my plan.
[0:18:43] DAVID PIER: So I’m making a lot more with my marketing cost. It is. It’s that human nature. When you go to the store and today only, you can get this beautiful new color TV for $50 off. They don’t say 10% off. They say $50 off. Human nature says, I’m going to buy.
[0:19:08] ALEX NOTTINGHAM, JD, MBA: Of course, insurance companies will say, well, it’s a marketing cost too, but not 40% off. When is the best time to present a membership plan?
[0:19:17] DAVID PIER: That’s a good question, and there is many, many times when it’s the best time to present it. We do at the initial call when we ask if there’s any insurance that we may be able to help you with. No, we don’t have insurance. Oh, have you heard about our membership plan? It’s on our website, and I’d be happy to answer some questions about it now. So the patients heard about it. A lot of patients sign up right there on the call when the admin team is speaking to the patient.
[0:19:47] DAVID PIER: The place where you really get them is at the initial exam, and you’re doing the complete series of x rays, and you’re setting them up for their hygiene visits. And then you can say again, I know Becky talked to you about the membership plan. Can I go over that more? And what the benefit to you would be with that notice I’m using questions. May I go over it with you more? I know you did a program recently on the permission statement, which is a very powerful tool.
[0:20:14] ALEX NOTTINGHAM, JD, MBA: That’s right. And I’ll link that. You mentioned that. I’ll link that in the notes as well. Okay, now tell me about den vantage. How does your process work or your program?
[0:20:26] DAVID PIER: Yeah, what we found this is the last thing that we found in terms of our mastermind and setting up the programs, is that when we did the monthly fees, it was great keeping it in house for ten patients, 20 patients, 40 patients, 50 patients. When we got up towards 100 patients, it really was time consuming, and we realized we had to automate it in order to make it work. And so we went to a web designer, and we had them automate it for us, and we shared that automation.
[0:20:57] DAVID PIER: And then that is when we realized we had that. We said, we have something that we can serve all our colleagues with. So the way Devantage works is, from our experience, we have a cookie cutter way to set it up. But when I say cookie cutter, it’s you fill in the blanks with your data. It’s your program. We don’t tell you what your fee should be other than giving you suggestions that we found work, but it becomes fill in the blanks instead of doing all this work.
[0:21:26] DAVID PIER: Plus you have Meg, who will help you through it and all that doesn’t cost you anything. There’s also no monthly fee to stay with them. Vantage. The only fee is $3 per patient per month. That’s what demvantage charges. And also Denvantage handles the credit card and the merchant fees. So that’s really only $2 a month, because you just spend one dollars a month on those fees anyway. So that’s what Denvantage does for you.
[0:21:53] DAVID PIER: For that, we’ll help you put it on your website. You have a link to Denvantage so that patients can do it online. They can fill out the agreement, the agreement that we work with our patients that we have found to be so effective. No other program out there has that. So those are the things Dentvantage does.
[0:22:12] ALEX NOTTINGHAM, JD, MBA: And again, what’s nice is you and some of your colleagues will be at the All-Star Practice Growth Summit.
[0:22:19] DAVID PIER: Very much looking forward to that.
[0:22:20] ALEX NOTTINGHAM, JD, MBA: Yeah, the 19th and 20th in May. Check allstardentalacademy.com. You can learn more about that. We only have just a handful of tickets left, so it’s kind of squeeze everybody. Yeah, we’re really full, but I’m trying to push the fire code of who I can fit in there. And you’ll be there, and so you’ll be speaking as well. So it’ll be great to connect. And if you can’t, certainly you can call Meg. I’ll put her number in the show notes for everybody.
[0:22:46] ALEX NOTTINGHAM, JD, MBA: It’s 207-266-8434, but we’ll keep that in the show notes. And you also have a free book as well, and they can get that from Meg and Alex, if they’d like.
[0:22:57] DAVID PIER: To talk to a dentist who’s actually done it in his practice and still does it in his practice, I would be happy to have any of your clients call me directly, too. I can give you my cell phone. It’s 207-233-1393. Or Davidpierdmd@gmail.com.
[0:23:16] ALEX NOTTINGHAM, JD, MBA: You’re easy to find, David.
[0:23:17] DAVID PIER: I am. And I’ve had many of my many people call me. And like I said, I’m at the stage where I want to give back, and I really be happy to help.
[0:23:28] ALEX NOTTINGHAM, JD, MBA: Thank you so much, David. Thank you for being on the program.
[0:23:31] DAVID PIER: Thank you, Alex. Thank you for having me.
[0:23:33] ALEX NOTTINGHAM, JD, MBA: Well, please remember to subscribe on YouTube and follow us on Apple podcasts and Spotify. Until next time, go out there and be an All Star.
[0:23:46] We hope you enjoyed this episode of Dental All Stars. Visit us online at allstardentalacademy.com.