Creating a PPO Exit Strategy for Your Dental Practice

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Narrator: You are now listening to another episode of the Insurance Untangled podcast, where we explore the various challenges faced by dental practices due to their reliance on insurance. Join us in this podcast as we dive deep into the issues surrounding dental insurance dependence and offer practical solutions and strategies to help you take control of your practice’s financial future.

Ben Tuinei: Welcome to another exciting episode of the Insurance Untangled podcast. My name is Ben Tuinei, and I’m one of the co-hosts of this podcast. And as you all know, this is developed to help every one of us untangle ourselves from the mess of insurance that we have to deal with on a day-to-day basis. Today, I have my good friend and co-host with me, and we’re gonna have a great conversation about insurance. I have Naren with me. Naren, how are you, my friend?

Naren Arulrajah: Yeah, I’m doing great, great Ben, and you?

Ben Tuinei: Doing wonderful, thank you. It’s always great chatting with you, and I’m really excited about today’s topic. So let me introduce today’s topic.

Today, Naren and I are just gonna have a conversation about this whole topic surrounding, do you have an exit strategy with regards to PPOs? Right? Do you have a PPO exit strategy, if you will?

And we bring this up because when you talk about business in general, not every one of us is gonna be in our careers forever. So we always have to think about retirement. Business owners have to think about exit planning, right? In an effort to maintain the value of the business that we spent years building, and then at some point, figure out how to exit or cash out of it.

So when it comes to this whole dynamic of PPOs, dental insurances, if you will, I think Naren and I are in agreement that if you are in-network with insurance, you’re gonna have to have some type of exit strategy.

So, Naren, do you mind giving us some context behind today’s topic to sort of set the stage for what we’re gonna discuss?

Naren Arulrajah: Absolutely. And I wanna piggyback on what you said, right? I know divorce is something not that everybody looks forward to, but let’s say you have decided to go through with that. You need to have a strategy. You need to think through exactly how you’re gonna do this, how this is gonna impact your kids, and make sure that the steps you’re gonna take are going to reduce pain and maximize benefit, right?

Another example is those of us who are parents of adult kids — at some point, we need to exit them out of our bank account. You don’t want them to live off your bank account forever. So again, you need a strategy: “Okay, I’ll pay for school, and when school is done, I’m done.” Or, you know, whatever that strategy is, right? You need to communicate it, you need to execute on it, you have to follow through on it.

Naren Arulrajah: So I think it’s a really good day to think about PPO exit strategy because unfortunately, if you were to survey ten people who are on PPO plans, nine out of ten will say PPO is not really a good neighborly friend. Rather, it’s like an evil that makes my life harder and harder every year. Why? The fees that you get paid are a fraction of what you need to provide great dentistry.

So let’s say you’re doing a thousand dollars’ worth of dentistry — you get paid $550. So it’s really hard to survive when you’re only getting paid a fraction of your usual and customary fees. So this topic — this PPO exit strategy — in my opinion, is a topic that all of us need to think about. And it doesn’t mean dropping all your PPO plans tomorrow, right?

Naren Arulrajah: That’s not what a well-thought-out PPO exit strategy is. It means understanding your participation, knowing which PPO plans are profitable, which ones are not, and building a plan that gives you freedom and control. Obviously, you want to keep the profitable plans and get rid of the unprofitable plans because those ones are not really helping you—rather, they’re hurting you.

So, Ben, remember you once mentioned this phrase, “PPO exit plan.” I would love for you to unpack that in a little more detail. I want to give you credit for thinking of that phrase.

Ben Tuinei: Oh, no, no, thank you, Ni. You know, I think that phrase “PPO exit” — I actually first learned about that phrase from Gary. Gosh, it was like back in 2013. He was in San Diego, and he did a course, a webinar called Breaking Free of the Shackles of Dental Insurance. That’s when he jumped off the boat with chains, and he had to unchain himself when he was in the San Diego Harbor.

And, you know, over the years, when I think about this whole idea about Gary’s coining of the phrase “PPO exit” or a plan to exit PPOs, basically what we’re doing here is putting together a roadmap for managing our insurance participation, right? Or our in-network status with insurance. And that in-network status, as we all know, comes with discounts or write-offs.

Ben Tuinei: And so, you know, the whole objective is to sort of think about when is the right time. Is it important for us to evaluate reducing PPO participation now, later in the future, or at what points in the future if we’re not ready now? When do we need to reevaluate it, right?

So to me, that’s sort of part of the strategy because too many practices just accept whatever the insurance companies are willing to pay without really knowing or realizing the impact on their numbers negatively, right?

So to me, that’s the problem. The problem is most reimbursements keep shrinking. And, you know, with things like network leasing, we’re getting these announcements every single month, and they’re designed to pull your fees down. So a lot of dentists don’t realize the era that we are in, in terms of umbrella networks and PPO negotiations—but it’s all designed to shrink the dentist’s profits.

Ben Tuinei: In an effort, or the mission behind that, is to give people savings, right? So the unintentional consequence of giving people savings is doctors become less profitable.

So, when I think about that, Naren, having a PPO strategy means you’re looking at data. One area is you wanna look at which dental plan brings in the most patients, right? Or which one is actually helping you with your profitability — which one is giving you the greatest amount of profitability, and which ones are giving you the least amount of profitability, right?

At the end of the day, you have to assess: are these plans costing you more than they are worth? So it’s not about cutting everything overnight, like you just mentioned, Naren. It’s about making informed, gradual decisions so that your practice has a mechanism to adjust in terms of your PPO strategy — so that you remain profitable.

But that kind of leads me to a question, Naren, if you don’t mind. Once a dentist decides that they want to take more control over their PPO situation, I often think about marketing and how marketing often becomes a challenge — or something that doctors don’t even think about or consider when they want to go out of network.

So, Naren, my question for you — with you being the best marketing expert that I know — is how does marketing actually fit into a PPO exit strategy?

Naren Arulrajah: Thank you, Ben. And I do wanna acknowledge Gary, because I agree he’s the foremost authority in reducing insurance dependence. If anyone wants to seriously go down that path, I would recommend booking a coaching strategy meeting with him — it’s thrivingdentist.com/csm for a coaching strategy meeting, thrivingdentist.com/csm.

And the question around how marketing fits into a PPO exit plan is a great, great question, Ben, because the truth is, most dentists don’t realize that marketing is the bridge between wanting to go out of network and being able to do it confidently and profitably.

When you depend on insurance, you are letting PPO directories send you patients. But when you invest in marketing, you start attracting patients who choose you for your reputation, who choose you for your care, and who choose you for results — not because you are in network.

Because remember, the patient who’s in network, the first and only question they ever ask is, “Is this covered by insurance?”

Naren Arulrajah: So really, the fact that you have a reputation, the fact that you have specific qualifications, the fact that you provide excellent care, the fact that you create beautiful smiles — all of that becomes irrelevant to that patient who only cares about whether you are in network.

So how do you do that? It starts with what I call foundational marketing.

What is foundational?
Number one — a website that converts visitors into booked appointments. Do you have before and after pictures? Are you highlighting those positive five-star Google reviews? Do you have videos that are welcoming? Does your website load fast so people don’t get frustrated by it? Does it work well on a mobile device? Remember, mobile devices have smaller screens.

Number two — SEO that helps you rank locally on maps and in regular search, not just for one or two keywords or phrases, but literally a hundred plus. Why a hundred plus? Because if you’re ranking for a hundred or more keywords, you’re gonna get an unfair advantage.

Naren Arulrajah: You’re gonna get 95% of the free traffic. And finally, Google Ads — to keep your schedule full while you make that SEO transition and SEO gains traction. SEO is the most profitable and the lowest-cost way to attract new patients, but it does take effort and time. So you can use Google Ads as a stopgap as you go through this transition.

Once you have these three fundamentals in place, you can drop the low-paying plans. Remember a couple of points that Ben made — you want to look at the profitability and then pick the least profitable ones. And if you’re not really sure, start with the smallest plan as well, because you’re doing something new. So why risk it with a big plan?

Pick one of the lowest-paying plans that also happens to be small, and drop that plan. Right now, that marketing is starting to replace those patients you would otherwise get from this low-profit and low-volume plan. Because it’s low profit, you’re really not gonna miss anything. Rather, now you’re replacing them with high-profit, fee-for-service patients who are paying you full fees.

Now your profits go up — you’re doing less work and making more money.

So, Ben, let’s say a practice owner wants to start putting a PPO exit plan in place. Where should they start? What are the first few things they should do?

Ben Tuinei: Yeah, that’s a really great question. And first, I just want to thank you for your thoughts there on the whole part about finding a marketing strategy to help you exit PPOs. To me, that’s kind of the key. The first step is just making sure that you have maximum visibility, or at least a tool that allows you to be visible to your community, right?

Because when you’re in network, it’s true that it’s easier to schedule patients. Sometimes patients find you through the PPO directories, right? But at the end of the day, when you go out of network, you need to find a visibility mechanism — a replacement — to keep your visibility intact.

Most dentists don’t even know how many PPO plans they’re actually in, because you and I know this, Naren — you could join one plan, and then they lease you out to so many other dental plans, right?

Ben Tuinei: So one contract could include multiple PPOs. Here’s what I recommend: start by identifying who you’re in network with. Create a master PPO tracker to identify all the plans that you’re in network with. It’s important to identify whether that’s a direct contract or a leased contract, right?

That way, you know which fee schedule you’re following for each PPO plan, so that you can compare and contrast those fees against your office fees.

The other thing that you need to do is track how many patients you have on each dental plan and review those numbers on a regular basis. I always like the example of taking a look at each different dental plan and analyzing as much as you can — what your overhead is, what your profitability is on that plan.

Ben Tuinei: I just did an analysis the other day, and a practice was 3% profitable on this particular PPO plan that represented 50% of their patients. But 60% of their new patients were coming in on this dental plan. So that tells you this — they’re growing with this dental plan. And if you exit that dental plan, are you gonna lose that patient base, that new patient momentum? You have to think about that.

That one exercise alone — or at least this exercise of identifying your visibility — tends to open your eyes. You start to see which PPOs make sense to keep, which ones you’re growing with, which ones you need to renegotiate with, and which ones you’re ready to start phasing out of network with.

Ben Tuinei: And that’s one exercise that I recommend doing on a regular basis. This isn’t just a one-time thing — you need to do this every six to twelve months, depending on how fast you want to exit PPO plans. So, in terms of where to start, that’s where I recommend starting.

But I have another counter question for you, Naren, if you don’t mind. Once a dentist has done that step, reviewed their PPOs, and now they’re in the decision-making process to drop one or two PPOs, how does marketing play into making that transition to out-of-network a little bit smoother?

Naren Arulrajah: Great question, Ben. I do agree with the points you mentioned — you have to do this systematically, and knowing what the right first steps are is very critical. So obviously, you don’t want to drop the worst plan; you want to drop the least profitable plan, and hopefully, a small, least profitable plan first.

The only thing you have to do right now is find marketing that will help replace those patients. So let’s say that particular plan — because you’re dropping it — you might lose 20 patients, and perhaps that plan was bringing in two or three new patients a month. You just need to figure out how to replace those patients you lose one time, and the two or three patients you lose every month from that plan.

And the beauty is, now the new patients are going to pay you full fees. So you’re going to make a lot more profits without increasing your work.

Naren Arulrajah: So go back to the foundation, right? Make sure you’re ranking on SEO. Make sure you have a website that converts — all the foundational things that I alluded to before. Once that foundation is solid, then you can focus on things like call conversion rate.

For example, the average dental practice in the U.S. is only booking one out of three new patient calls. Now, if you’re going from PPO — where they came to you because you were in-network — to now having to convince them to come to you because they’re choosing you and paying out of pocket, you need to master some skills.

Otherwise, you’re more likely going to be like the average dental practice that’s only booking one out of three new patients. One of the things we do is give you that analytics, that data — what’s your conversion rate? What percentage of new patients are actually booking appointments? And then we help you improve that conversion rate.

So instead of it being one out of three, perhaps it’s two out of three. Now, all of a sudden, without spending any additional marketing dollars, it further improves the number of new patients you’re getting from marketing.

Ben Tuinei: Mm-hmm.

Naren Arulrajah: The goal is simple — you want patients who are choosing you, who value you, who pay you full fees, and you want to replace those least profitable PPO patients with these high-value patients who are loyal to you, who appreciate you, and who pay you full fees.

Ben Tuinei: I love that, Naren. You know, if I am a dentist and I’m listening to this right now, and I’m thinking to myself, “Well, I don’t really have a PPO strategy — or at least not a solid one,” this is your moment to take control. If you’re starting to feel trapped by shrinking reimbursements and the new trend of significant increases in insurance administration for those that are in-network — from denied claims, you name it — this is really your moment to act. And this is actually perfect timing for you to do that. My encouragement is to start thinking about this and taking action.

Naren Arulrajah: Exactly, Ben. Whether you need help understanding your PPO data or you want to build a stronger marketing system, it all starts with getting clarity. I hope in today’s conversation that Ben and I had, we gave you some of that clarity.

Ben Tuinei: Absolutely. And if you’re listening and you feel like you need help reviewing your PPO participation, or building a strategy that helps protect your profits, my team and Naren’s team can help you evaluate those things — to help you see where you stand and what next steps you need to take.

Naren Arulrajah: And if you’re ready to attract better patients — patients who are choosing you because of your quality work, because of your reputation, because of your care — that’s the key to reducing insurance dependence. Schedule a marketing strategy meeting. It’s complimentary. We spend six hours studying you and your competition. We’ll tell you what your weak points are and how to overcome them.

The link to book the marketing strategy meeting is insuranceuntangled.com/msm — insuranceuntangled.com/msm. And definitely, if you want to figure out which PPO plans to drop or who to negotiate with, Ben is a wonderful resource.

Ben Tuinei: Thank you there, Naren. I agree. Well, in terms of next steps — the marketing strategy meeting, I agree — that is the step to take from the perspective of helping you replace and increase new patient flow, so that we’re not dependent on these insurance companies and paying them 40% of your fees just to see new patients.

So, Naren, thank you so much for this jam-packed session of wisdom that you just dropped on us today. I really appreciate that. And I want to thank our listeners for joining us today on another amazing episode of the Insurance Untangled podcast.

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Folks, until we meet again, thank you for joining us today. Until we meet again, we wish all of you the very best of success. Take care now.