The Cost of Taking Dental Insurance

Larry Guzzardo, head instructor and lead consultant at All-Star Dental Academy, is interviewed by Alex Nottingham, JD, MBA on Dental All-Stars to discuss the costs of taking dental insurance. Larry shares a brief history of dental insurance, highlighting how the benefit maximums have not kept pace with inflation. He suggests that the intentions behind dental insurance were initially good, but money eventually became a driving factor for insurance companies. The impact of dental insurance on dentistry has been significant, with increased paperwork and complexity for both dentists and patients. Larry explains the financial costs for dentists participating in insurance, as the reimbursements often don’t cover their operating costs, leading to write-offs and a decline in profitability. He emphasizes that dentists can thrive without dental insurance by charging their full fees and not giving away a significant portion of their earnings. The episode concludes by highlighting the benefits of working with a coach, like Larry or Eric Vickery, to navigate the process of getting off dental insurance successfully. To learn more, listeners are encouraged to watch the Insurance Freedom webinar at


About Larry Guzzardo

All-Star’s Head Instructor, Consultant. Larry is a highly sought after dental practice consultant and international speaker. His skill and talent is offering practical, common sense solutions to improve dental practice productivity. He is also a faculty member at the Dawson Academy. Larry has delivered countless presentations including, “Winning Patient Acceptance of Fine Dentistry,” “Working with You is Tearing Us Apart,” and “The Leadership Challenge.”

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

Transcript performed by A.I. Please excuse the typos.


This is Dental All-Stars, where we bring you the best in dentistry on marketing, management, and training. Here’s your host, Alex Nottingham. Welcome to Dental All-Stars. Our guest is Larry Gazzardo. Larry is the head instructor and lead consultant at All-Star Dental Academy. He is also a faculty member at the Dawson Academy. He frequently speaks nationally and internationally to prestigious dental institutions, including the Hinman Dental Society.


Chicago midwinter, Yankee, and many more. The title of this podcast is The Costs of Taking Dental Insurance. And I’d like to also share with you before we start the podcast that we have a webinar where I have Larry, I have Eric Vickery, our president of coaching, and we talk about the impact of dental insurance on your practice and how to break those shackles. Whether you’re in network or at a network, the webinar will be of great benefit to you.


to sign up for the webinar, go to slash freedom. Please welcome Larry. Good morning. Good morning to you. Larry, give me a quick history. You see, you’ve been in dentistry for over 30 years consulting. Close to it, yeah. Tell me a little bit about, yeah, tell me about a quick history on dental insurance. Why was it created? Was there a benefit?


Well, you know, dental insurance was created to help patients and it was created to, I think, help, uh, dentists at the same time, but I think we forget it was created a long time ago, almost 50 years ago and 50 years ago, they came up with a benefit maximum, uh, about a thousand dollars. And, um, but if you think about it 50 years ago, if you had a thousand dollars maximum over three or four years, if you needed a lot of dentistry,


you’d have no problem getting it all done. However, what we’re finding is, is that that maximum hasn’t kept up with the rate of inflation over the years. And so now almost 15 years later, if you need a lot of dentistry done, that maximum really should be $6,000 or $7,000 a year. And again, if you think about it, if, if you needed a lot of dentistry, if you had $6,000 or $7,000 a year in benefits over three or four years, you, you could get it all done.


You could get your mouth healthy again today. There’s no way that that benefit will help you. So if I look at that history, I think their intentions were good at the time, but they just haven’t kept pace over the years. So, so you’re saying that you think the intentions of dental insurance at the beginning were good. Well, what changed over the years? What changed? So you’re saying good intentions, good pay. Yeah. And now the pay is not the same. Are the intentions the same?


Okay, so people are going to start throwing eggs and tomatoes and stuff like that. But this is just my opinion about it. But I can’t help, but think that, you know, money got involved. You know, the insurance companies could see that they could make a lot of money selling dental insurance, you know what I mean? Uh, employers liked being able to offer dental insurance as a rider to their medical insurance. And, and so they, they saw that they could make a lot of money by boosting up those benefits.


Um, and of course people liked it. And so lots of, you know, companies bought premiums, you know, policies for internal insurance and, but the insurance companies had no incentive then to increase the benefits to the doctors. The doctors all signed up too, because at the time I think it was a good idea. You know, I wasn’t around then, you know, for consulting and all that. But I think at the time it probably was a good idea, but it just didn’t keep pace. So I think honestly, it money got in the way.


What has the impact of dental insurance been on dentistry? I think overall now, if I look at it overall, the course of time, I think number one, there’s been a physical toll on dentists and their staff because now dental insurance is a very time consuming process. There’s an enormous amount of paperwork, uh, because plans are confusing.


You know, I think maybe years ago, there might’ve been one plan it paid this way and everybody kind of understood it. Today, if you took a poll with patients and you ask them, how does your plan operate, that’s what you would hear. Crickets. Because nobody knows how their plans operate. The insurance companies have gotten very savvy. They offer a lot of different plans with a lot of different options, but those options are usually exclusions, restrictions, changes.


waiting periods, predeterminations. Insurance is not very user-friendly. Just because most people don’t understand it, you know, they say things like, this is covered, but it’s not payable. I don’t know what that means to you, but to a lay person, they’re like, what does that mean? How could it be covered and not payable? So it’s not very user-friendly. It’s not user-friendly for the staff. It’s difficult for patients to understand.


Why can’t you get this information? Why don’t you know this information? Even for providers who actually participate and have a contract, changes aren’t readily made apparent to the provider. It’s very difficult. They have this whole thing with predeterminations. You could say I can go on and on about it, but there’s all these predeterminations which lead people to believe that’s what my coverage will be.


when in reality it’s no guarantee of coverage and it’s no guarantee of payment. It’s the time that we spend on this emotionally or physically really affects a lot of people because we spend more time dealing with the insurance than we might actually deal with talking to a patient about their care. So there’s a lot of misinformation. So just physically, it’s just the time, the toll, the paperwork, the constant back and forth.


nitpicking about things. It’s very difficult. The plans have become complicated. What I’m hearing from you is you’re saying that over time that they’ve paid less. Maybe you say that money is involved and so on. You also mentioned that there’s the complexity of the plans and that it takes a lot of physical time for the office to process. Now, let’s get to the premise of the podcast and you’re going to enjoy this.


What are the costs? I know you’re so keen on the analysis. What’s the cost to a practice? For taking dental insurance. Well, there can’t be any doubt. I mean, there’s the time cost There are emotional costs and things like that But if you want to get round down to brass tacks today, there’s a financial cost to participating with insurance because because the fact that that the maximums have never


gone up over the years or they haven’t gone up significantly. They clearly have not kept pace with the rate of inflation or what it costs to actually do dentistry. So it means that it now erodes operating profit of the dentist, meaning that they may actually do a procedure, but the reimbursement that they get from the insurance carrier doesn’t even cover their operating costs. And so it actually…


they have to take money from a patient who actually pays better or pays their actual fee. Those patients are subsidizing the insurance patients. So it definitely erodes operating profit. You know, Alex, if you look at our measure of a healthy practice, an economically healthy practice, it’s going to cost about 60 cents per dollar, every dollar that you charge out.


to pay for the dentistry that you do. So if you’re writing off $10,000 a month, 20,000, maybe $30,000 a month, you’ve got to multiply that by 60%. So if you’re writing off $30,000 a month, right off the top, it’s costing you $18,000 to see those patients. And this is something that the insurance company doesn’t exactly really talk about because they want you to believe that seeing more


Patients means your costs are going to go down and that might be true in manufacturing, but it’s not true in dentistry You know the more patients you see the more two by twos you need the more saliva ejectors you need the more You know blocks you need the more x-rays you need all those things cost more money so your costs actually go up as you get busier and And so we have to remember the more insurance or the more write-offs you have The more it costs you


to do the dentistry that you don’t get paid for. And an easy math would be, if you’re doing $10,000, you’re gonna need $6,000 this month to pay for the dentistry that you didn’t get paid for. And so that’s expensive for a dentist. Financially, there’s no denying that. Costs have gone up, but the reimbursements that we get from the insurance company, and I’m talking about the maximums.


because they’ll play with words like, we raise our reimbursement and ensure they’ll do it on an individual code, on an individual procedure, but I wanna see a wholesale increase on the maximum. That’s what counts. In the webinar, Insurance Freedom, that we did together, you were showing the math that some insurance plans are 40% write-off.


So you’re saying to me, if you’re 60% overhead, you’re not making any money, essentially. It’s easy to calculate because if it costs you 60% to do the procedure, and these things are not difficult to calculate, we help clients with it all the time. If it costs you 60 cents, you took in a dollar, 60 cents goes to pay for the overhead of seeing the patient, and then you wrote off 40%.


Again, it doesn’t take rocket science here to realize, well, there’s nothing left. And so the trap that a lot of dentists get caught into is like, well, we got to see more patients. So they see more patients, but they realize all I did was give up dinner with my family. And I didn’t go to the kids’ soccer game and I missed my daughter’s ballet recital and could have went on a walk with my wife, but I had to stay in the office to produce more, but it’s not making me any more money.


And so it gets them on a treadmill, a mill that they can almost never get off of. I always joke when I go to an office, Alex, and I see they haven’t redecorated since like Carter was president. I know they have no operating profit. It’s all being eaten up and that’s why they have no money to, you know, you know, make those investments. So as a dentist, can I afford to take dental insurance? You, you, you might be able to.


depending on your operating expenses, if your dad gave you your practice, if you don’t have to pay for your building or buy insurance or buy new technology, you know what I mean? Yes, you can afford it. But I would just say as a across the board answer, it’s very difficult today for a dentist to earn the lifestyle or earn the living that they should given their education and the amount of time that they put into it.


by participating with insurance, because you’re automatically giving, we’re saying 40%, but we see much higher write-offs there. You’re automatically giving it to them. And so again, they’re good at making you believe that you couldn’t get by on your own. You wouldn’t be able to find patients if it wasn’t for us, but we know better. Conversely, can a practice not to survive, but thrive not taking dental insurance, because there’s a lot of fear dropping insurance plans.


Yes, there, there is a lot of fear, but they can thrive. They can thrive, uh, by not participating with an insurance plan. You have to be smart about it, you know, and, and that’s how we help, but you know, the clients that we work with. But yes, they can definitely thrive, uh, because now they’re getting their full fee and they’re not giving maybe 40% of it to somebody else. So definitely yes. Why work eight hours and only get paid for four? I don’t know if that makes sense to you.


But essentially that’s what a lot of dentists are doing. It does. I remember in the webinar we were talking about, so two points, one to the fact that you can get paid to the procedures. So instead of having to work six procedures and get partial pay, you work four and you get full pay. And the other fear is, well, I’m gonna lose a lot of my patients. And if you’re writing off 40%, you could afford to lose 40% of those insurance patients.


But what we find is maximum, if you do the process right, the way we teach it, getting off certain insurance plans, maximum you lose 10%. So net, you’re making more money because you’re getting more from the patient. Yes, and I see that every time. And I know our listeners don’t always know us and our process and all that, but I can say I’ve got many, many, many, many years of doing this and nobody has ever hired me to get them on an insurance plan.


They’ve only ever hired us to get them off of insurance. And so we know that they can do better. We know. So I know, Larry, that you helped many practices get off dental insurance. And in the webinar, we teach Eric, yourself are teaching the going into much more greater detail than this podcast can provide in terms of the risks and the numbers of getting off dental insurance and some tactics to do so.


And both you and Eric have worked a long time helping practices get off. And as you mentioned, you never work the practice to get them on insurance. And we do offer coaching, insurance freedom coaching as well. So I encourage you to watch the webinar, slash freedom. You’ll learn a lot. And if you’re interested in learning more about our coaching, you can reach out and we can talk to you and what’s great is you will work with either Larry Guzzardo, our head instructor, or Eric Vickery, our president of coaching.


Now as a consulting coach, working with clients, what are the benefits, so what are the benefits in general to work with a coach to help get them off insurance and what are the risks by doing it on your own without help? Oh, okay, this is a very good question. One of the benefits of working with somebody to help you through it is to make sure that you do it correctly. And what I mean by that is we’re gonna be able to provide


an unbiased objective look at your costs. You know what I mean? To determine how much does it cost for you to actually see a patient. You know what I mean? We can evaluate the write-off from each individual insurance company that you take in. So as we’re getting off of insurance, you know what I mean? It’s not like a wholesale, we just get off insurance. We’re gonna start with the ones that are, you know, cost us the most, and then we’re gonna go down from there. But we’re not gonna do it blindly.


we’re going to know. The other thing is that the communication part with your staff to the patient is very, very important. We have to be able to answer those questions. It’s very natural for staff to kind of feel like, yep, we’re out of network and we don’t participate and you’ve got to pay us everything. And so that’s why patients start flying out the door because they’re feeling like I have to change dentists. And so it does say…


It does take some coaching to teach the fact that, no, no, nothing has to change. You can stay here and you don’t have to get a new dentist or a hygienist. We could stay here in the office. So the benefit is making sure that we do it correctly, that we do it with the minimum amount of disruption to the dentist, to the staff, and to patients, because it’s really important that the patient fully understands what their options are.


And that’s why we can do it without a wholesale mass exodus of patients out the door. That’s why we don’t see that happen. And we want to make sure that, like I say, we’re doing it correctly. Sometimes we find that some plans actually work, believe it or not, because remember, what it costs for you to operate the practice is part of the equation. And it may very well turn out, I’ve seen it over the years, that, hey, you know what? You could afford to take this plan.


It works economically. It works just fine. And so again, we’re not going to do something we don’t have to do just because we don’t like the idea of working with an insurance plan. So it’s, it’s, it’s not going to be emotional. It’s going to be very logical, but you’re going to get the training. You’re going to get the training and, and the staff, you’re going to get the buy-in, you know, from the staff. Because they believe we’re doing the right thing and they’re doing it the right way. And so this is what I’ll finish with Alex.


When it’s done the right way, they don’t get back talk from patients because that’s the fear from the staff. Oh my gosh, they’re going to eat my shorts. I don’t want to pick up the phone. I don’t want to talk to anybody. I don’t want to discuss this. And sure, if I felt like I was going to get into trouble every time somebody called, then I wouldn’t want to answer the phone either. But you see, this makes answering the phone and being able to explain it to patients a pleasure because the patient will agree because they’ll realize that’s a good decision.


And, and yep, I’m glad I could stay there. Wow. I love your pragmatism and how well you, you lay it out because look, it’s just the dollars and cents and what’s going to make your practice run more efficiently and to your desire, to your happiness, where you’re getting paid, what you feel is your worth and, and you know, one of the, the tactics or one of the topics we even talk about in the webinar.


is about this idea of marketing. They don’t send a lot to you. You just have to accept. And when would you pay a marketing company that rarely sent you anything, 40% of what you make? So I won’t get you too fired up. We have a 90 minute webinar. It is entertaining, electrifying. I’m hearing we launched it a few weeks ago. We’ve been doing this for years, but we launched the webinar and there’s some really great reviews. I mean, it’s Heather


my wife again, not a dentist, but listening, you just are glued to the information. And it’s so much fun because you get two wonderful speakers together. Just the dynamics are really entertaining. And I encourage everyone listening, whether you’re in network or out of network, this webinar will be something you will appreciate. Even team members will learn a lot if they choose to, or office managers that or consultants that want to learn. This is a great webinar.


teaching you how to break free of the shackles of dental insurance. And look, if there are plans that make sense, we’re not like you can’t have any plan. It has to make sense financially. If it does, keep it. If it doesn’t, you have the freedom to choose. It isn’t forced upon you. And you’ll have the information in front of you so that you can make an intelligent decision and you’ll have somebody to help you make that decision. You’re not going to be hung out on your own hoping this all works.


No, we have a plan that tells us, no, this will work. You are being very kind about the risk and the risks involved is if you don’t get support and you don’t get the knowledge, then there have been practices that have went bankrupt doing it the wrong way or had to quickly go back to the insurance plan because they couldn’t afford the changes. And as an attorney, there’s this joke, you don’t represent yourself pro se.


You’re silly as an attorney to do that. I’ve done that once and I had my, what is it, my shorts handed to me. You don’t do that. So if you’re a dentist and you’re doing something you’re not familiar with as well, you think you know, because you’re emotional and you don’t have the support team to help you and to make sure you’ve done your due diligence. This is a multi-million dollar decision.


and process that requires care. And whenever you start or change a multimillion dollar company or the potential of millions down the road, you need to make that investment in people that have done it and can help you. And Tony Robbins, my mentor, always said, model the best and follow what they’re doing. Larry Guzzardo, Eric Vickery, have been doing it for decades and have done it well. And take a look at that webinar, slash freedom. So Larry, thank you so much for being on the program.


You’re welcome.


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