PPOs are an Addiction – You need to break free!

Narration 1: Are you looking to grow your dental practice and attract top-tier new patients? Discover the potential of digital marketing with a personalized strategy session. Join Lila Stone, the Marketing Director at Ekwa, for an exclusive 90-minute consultation. Lila and her team will dedicate six hours before your meeting to create a customized marketing plan specifically for your practice. This valuable opportunity is free of charge and comes with no commitments. Visit www.insuranceuntangled.org/msm to schedule your meeting with Lila today. You’ll also receive a free analysis report so you can start transforming your practice through the power of digital marketing.

Narration 2: 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 know, we’ve created this to help practices untangle themselves from insurance, and we talk about all things insurance, as well as marketing concepts and business in general as it pertains to dentistry. And today we have a really fun, uh, episode that we’re gonna cover here. I have my co-host Naren with me. Naren, how are you?

Naren Arulrajah: I’m doing great, Ben. And, uh, how, how are you doing?

Ben Tuinei: Doing wonderful, thank you. Always great to chat with you. We picked a pretty fun topic here. Um, so what we decided to talk about is the topic: PPOs—you know, they’re sort of an addiction. <laugh> So the question is, how do you break free? So the topic again: "PPOs are an addiction you need to break free from" is what we’re gonna talk about today.

So, Naren, let’s first talk about this whole concept of PPOs being an addiction. And we don’t say that to offend anybody. The reality is that when you think about—even if you are a general dentist or a specialist and you’re in-network with insurance—it’s more along the lines of it’s hard to break free. It’s scary, it’s uncertain in terms of going to the out-of-network path or being free from insurance contracts altogether. And we get that. But we want to talk about it from the perspective of—you know—we gotta break free. And so we call it an addiction because, you know, quite truthfully, that’s what it is.

So speak about that for a minute, Naren. Why are PPOs so hard to get out of? Like, why do we feel like, as practice owners, they’re an addiction? <laugh>

Naren Arulrajah: Yeah, I think, um, to really understand this, we have to kind of go back and understand psychology and understand kind of the story of a typical practice owner. You know, we are taught—especially anyone who’s a doctor listening to this podcast—that staying busy means you are being productive, you are being successful.

I mean, think about it, right? Even as a kid, you know, who got the best grades? The kids who worked every hour of the day. You know, not the ones who played all day and had fun all day, right? It’s the hardworking people. So we started believing this idea that working hard and being busy is good for us, right?

And it started in elementary, high school, college, even dental school. I mean, you are not gonna get through dental school by playing the fool. Any of you who are a practicing dentist know you really worked hard. You’re very—you are one of those studious students. So that’s the psychology side of it.

And then when you come out of school, the PPO plans say, "Hey, you want new patients? Sign up. Here is the dotted line. Oh, it’s only a 200-page contract, but don’t read the fine print. Just sign up," right? And we sign up.

And what does the PPO plan do? They send you new patients. Obviously, they don’t want you to read the 200 pages or the fine print. They control the fees. They tell you how much you can charge.

So let’s say you do a thousand dollars’ worth of dentistry—after everything is said and done, you might only walk home with $550. Yeah, on one patient, it’s okay. But imagine doing that day in and day out for the rest of your life, where almost half of what you make is not coming to you, not going to your team, not going to your practice. 

It’s going to, you know, these other third parties called the PPO plans. But the problem is, you get caught up, right? So you’re busy, busy, busy. Because you’re giving up so much money, you have to work even harder just to maintain your lifestyle, to maintain your profitability.

Naren Arulrajah: Why? You know, like, there was a stat saying that 34% of U.S. dentists in 2023 told us that the PPO reimbursement rates have dropped 10% or more. This means one-third of dentists have seen their income drop by one-third, but their expenses go up. Every year, expenses go up.

So how do they make up for it? They work even harder. They see even more patients just to maintain the same expenses and same lifestyle. So every year, they’re getting caught up. Almost like—I think addiction is one analogy—but the other analogy is like, imagine a frog in a slowly boiling pot of water, right?

Every year, it just heats up a little bit. Like, oh, you know, they pay you 10% less, reimbursements are less and less, expenses are going up. But you somehow think, "Oh, I’ll work harder. I’ll, you know, maybe work two extra hours. I’ll see eight patients—I mean, two more patients a day or three more patients a day. Somehow I’ll make it work," right?

And then, you get caught up in this trap, and you feel like you can’t get out. And of course, I mean, you are not a dentist in isolation. You are a mom or a dad. You have elderly parents to take care of. You have your kids who needs bills to be paid—university expenses, college expenses, private school—you name it, right? So you have all these things. You just, you know, I think get caught up in the trap and feel like you can’t get out.

Naren Arulrajah: So even though, you know, every year you’re getting squeezed more by these PPO plans, you feel like you’re helpless. You feel like, you know, that’s it. And then you just somehow put up with it, and put up with it, and put up with it.

You know, and I find that it’s kind of also like being in an abusive relationship. A lot of women who are in these relationships feel somehow that leaving is worse than continuing that abusive relationship. Why? Because they feel like there’s no other plan, there’s no other way for them to survive other than to put up with this abusive person who just beats them up or does whatever—mental abuse, you name it. But they just feel like that’s the only option. The other option is they’re on the streets, their kids are on the streets.

Even though that’s not true, that kind of becomes their reality. So I think it’s easier for those of us who are not caught up in this to say, "Hey, you can do it." But it’s not easy, you know, until you make that first step. Of course, that person in the abusive relationship steps out, starts going out with friends, and realizes that life doesn’t have to be that way. They see the different lives that other people around them are living, and they’re like, "I don’t need to put up with this nonsense."

So I think one of the early steps anyone in this PPO trap needs to take is to start building your marketing. Because the minute you start getting new patients who are not coming from PPO plans, now you have choices. You don’t have to keep taking those patients and getting paid 50 cents on the dollar.

You know, you can say, “Nope, I’m dropping one plan,” because you have enough patients who are not on plans coming to you now through marketing. So I really think—even today—even though only half of Americans are on PPO plans, a large majority of American dentists are on PPO plans. So, there’s a mismatch. There are half of the patients who are dying for a dentist who would take their full fees and see them because they’re not on a PPO plan. And they don’t need to be dictated by the terms of the PPO plan.

But dentists somehow are fishing in the tiny pond of PPO patients, versus ignoring the pond of all these patients who are not on PPO plans. So I think you just have to get out and start doing marketing and start getting good at it. And the better you get at marketing, you can keep dropping these—start with the worst abuser, the plan that pays you the least, that is just the worst one—and then drop the next worst one. And before you know it, you get rid of all the bad plans.

Ben Tuinei: Yeah, yeah. I like that. You know, you mentioned—sort of equated—the relationship between insurance companies and dentists like that of an abusive relationship, which is not too far from the truth. <laugh> When you look at abusive relationships, of course, we think about warning signs, right?

And a classic example in abusive relationships, a big warning sign is when somebody is continuously playing the victim, right? Yeah. So things like that—they tell you to pay attention to—in an effort to make sure that you’re living in a healthy relationship.

When you take that methodology, or at least that sort of assessment on warning signs, what would you say are warning signs to recognize in the PPO world, as a PPO provider? What warning signs do you think we should look out for, from the perspective of at least drawing the conclusion that, hey, this is enough is enough? <laugh>

Naren Arulrajah: Yeah, absolutely. I mean, you went to, what, ten years of education—when you include dental school, university, etc.—and training, and somehow they tell you what’s covered and what’s not.

Like, for example, you have to beg their permission to do the right thing for your patients, and they’ll continue to say, "Nope, nope, nope." And then eventually, you get patients who don’t want to do the right thing for their own health because they think you are the bad guy trying to scam them—because it’s not covered by insurance.

But insurance doesn’t care about health. Insurance doesn’t care that you want to have that beautiful smile. Like, they don’t care. They just want to do the bare minimum. Their business model is: collect premiums, pay out as little as possible, keep everything else for themselves—the fat cats who run the insurance firm.

Naren Arulrajah: Um, so that’s a great example of an abusive relationship—where a patient shows up one day early and they are covered, or something that you absolutely believe needs to be covered is not covered. Or you do the work and then they reject your claim. You know, they’ll keep cutting your fees or they’ll keep, you know, not increasing your fees to keep up with inflation.

Like, you might have ten years of experience in a particular field, but you are paid just like the guy who graduated from school two months ago. Why is that? It doesn’t make any sense, right? I mean, what about all your extra qualifications? What about all your—? But no. For them, it’s a commodity.

Like, the fact that you have ten years of experience in a particular top area means nothing to them. Right? I mean, in their mind, dentistry is a commodity.

So anytime you see those abusive relationships—where you’re not being valued, where you’re not being taken care of—I think it’s time to start planning your exit. It doesn’t mean you quit every plan tomorrow, but start building your marketing. Start, you know—once you have that marketing working—start dropping that first PPO plan, that first abusive relationship, and then the second, and the third.

You might end up with one or two at the end—like the best ones of the lot—but you don’t have to go all the way. But the bottom line is, get out of as many abusive relationships as possible, starting with the worst.

But you can’t do that until you have options. So I really say, take ownership of your practice, your career, your life, by starting to attract the patients who need you, who appreciate you, who want you because of your skills, because of your qualifications—because of how much attention you pay to quality, or how much time you spend getting to know them, getting to know their needs, and taking care of them as human beings, versus just a number, you know, as far as the PPO plan is concerned.

Ben Tuinei: Yeah. I remember when I first started in dentistry, Naren, it was interesting. When I would pull utilization data from clients—and I was very much trying to learn the industry, right? Trying to learn the coding and all that—I noticed a pattern that some doctors did certain procedures on certain insured patients that weren’t being performed on others with different insurance plans.

And when I presented the question to these doctors—like, “I noticed there’s a utilization pattern difference depending on the insurance category” <laugh>—I was just curious as to, you know, why? <laugh> And the doctors would look at me like I was an idiot. It’s like, “Seriously? What a stupid question.”

The reason why we do that is because those other procedures are not covered by the other dental plan, so we don’t do them for those patients. And it opened my eyes to the fact that—holy smokes—do insurance carriers have such a great influence on the type of care that you get.

And so, I think we’ve done a lot—

Naren Arulrajah: Your care may vary depending on your insurance plan, as opposed to, “I’ll do the right thing for you.” You know?

Ben Tuinei: Yeah, that’s exactly right. And my son went through that, and my wife too—when my son was born, I noticed that with our medical insurances. Like, seriously? Depending on what kind of insurance you have, you could get good or crappy care, you know?

So I began to wonder—I wonder about the Medicaid community, low-income families. I know this is probably going to be harsh. I’m probably going to get a lot of, um, interesting comments about this. But it’s like, you might as well write a plan that’s designed with a whole eugenics component in mind, right? <laugh> Because you’re not giving people the care that they actually need according to the doctor’s expertise.

You’re creating a plan design that’s influencing a certain type of dentistry that’s based upon the insurance—not what the patients actually need. And our poor doctors—

Naren Arulrajah: I mean, doctors didn’t get a degree in insurance, right? They got a degree in doing the right thing for their patients—you know, about care and all that stuff, right? It’s about doing the best for your patients regardless of—

Ben Tuinei: Yeah, I know.

Naren Arulrajah: —how good or bad.

Ben Tuinei: Right? And I think doctors and patients are like victims in the system, you know? So, with that said, Naren, you know, I always get the comment of, "I think it’s really difficult to drop insurance plans." Why do you think that is? Like, why do you think there’s that perception? And, I guess a follow-up to that is, if it’s hard to quit PPOs, why? <laugh> Why is it so hard?

Naren Arulrajah: Yeah, I think two reasons. One is, we get comfortable with our current way of living, our current way of doing things. And that analogy I used about the frog in the boiling pot—why does that frog continue to stay in the boiling pot even though it’s going to just literally get boiled to death?

You know, and that’s what you see happening with PPO doctors. They’re working harder and harder. They get illnesses. And eventually, they’re just forced to retire because they just can’t keep going anymore. Because they’re doing 50% more work and getting half as much money—versus somebody who’s seeing fewer patients, doing quality dentistry, enjoying himself or herself, and getting paid full fees.

So, I think the reason people still do that—still put up with that—is because, one, they see everyone around them on PPO plans.

Naren Arulrajah: So they go to these local meetings and they’re like, "Oh, you should be nuts to even think about dropping PPO plans." They just start believing what is possible based on what they see around them. And unfortunately, if a lot of your colleagues are on PPO plans, you will somehow start coming to the conclusion that you can’t do it. "Well, nobody else can, so I can’t."

But it’s kind of like that four-minute mile example, right? Until Mr. Bannister broke it, nobody thought it could be done. But then when Roger Bannister broke that mark, within months, so many people broke it. Just that—you have to surround yourself with people who are like the people you want to be, versus the people you don’t want to be.

So in this case, join the Reducing Insurance Dependence Academy, join the Insurance Untangled community. We have events every three months. We have podcasts every week. Start surrounding yourself with people like the ones you want to be like—less dependent on insurance, whose lives are not dictated by insurance.

So that’s, I think, one reason why they don’t quit, and one way to solve it.

And second is: people with choices have confidence to take action. You know, imagine you don’t have a choice in a matter—like, for example, you know, I mean, I know most of us can’t even imagine this—but let’s say you come from a family where you don’t even know how you’re going to pay next month’s rent. You might stick with a crappy job just because you’re like, “Okay, if I lose that job, then I’m going to be on the street,” right?

But imagine you’ve started saving some money up, and you have six months’ worth of savings. Now, you’re not as afraid anymore. You’re like, “Okay, let me take a chance. Let me go and find that good job. I don’t have to stay here, because worst case, I’ve got six months’ rent saved up.”

What does that mean? That’s about creating choice, right? That’s about creating options. So the minute you start investing in marketing that works, and you start getting new patients, you’re like, "I can drop at least one plan." Because let’s say that plan is bringing in four patients, and your marketing is bringing in ten—you’re like, “Okay, I’m getting ten. Dropping this plan is not going to kill me, because I’m only going to lose four.”

And again, you’re losing the ones you would rather not see anyway, because you only get paid pennies on the dollar versus full fees.

Naren Arulrajah: So you’re like, "I have nothing to lose, and I’m not going to stay not busy and twirl my thumbs." I think that’s the number one fear—people equate not being busy to being a failure, just because of that psychological framing from the time they’re little kids. If you’re busy, that means you’re successful, you’re doing something right. If you’re not busy—

But you’re losing money. If you’re doing, you know, $100 worth of dentistry, but it’s costing you $150 after you pay your team and everything else, you’re losing money. So in that case, you don’t want more of those $100 dentistry sessions, because you’re losing money every time you do that $100 dentistry, right?

So I think partly it’s about surrounding yourself with people who are able to think differently. Partly, it’s giving yourself options—like in this case, having strong marketing that’s able to bring in quality patients who are not asking the question, “Is it covered by insurance?” Because they’re not even part of the PPO plans.

So what I’m saying is: go on the offense when it comes to marketing. And then surround yourself with the people you want to be like—not the people you don’t want to be like. I mean, I think there’s that famous quote that says, "You become like the five people you spend the most time with."

So start spending time with people who are on this journey of reducing PPO plans. And over time—I promise you this, I’ve seen this hundreds of times—you’ll get the courage to take that first step, the second step, the third step, and just keep going.

Ben Tuinei: Yeah, absolutely. You know, there’s one thing that you said there about that four-minute mile that kind of resonated with me. It was like, once that one person did that, I think what that did, Naren, is it gave other athletes the confidence of saying, “Oh, you can do that, you can achieve that,” right? And they never knew that was possible, right?

Naren Arulrajah: Yeah.

Naren Arulrajah: Until then, they believed it wasn’t possible. They thought human physiology was such that you could not finish a four-minute mile—it just couldn’t happen. They believed in it, and because they believed in it, it was true for them. The minute they saw one guy do it—"Okay, he’s human too, so if he can do it, so can I."

Ben Tuinei: I know—it’s amazing, the progression of the human race. You know, you look at the scientific community and all these great scientists—like Albert Einstein—creating theories that were proven true 60 to 80 years after he died. And then newer scientists are like, "Oh, we can achieve great things," right? And we push ourselves, and we stretch ourselves.

And I like that you used that analogy as it pertains to dropping insurance and surrounding yourself with a good team. You know, because dropping insurance is nothing new. It’s been around—it’s been going on for decades. It just so happens to be the right time to do it now, from the perspective of inflation and profitability.

So many practices are struggling out there, right? Um, so you mentioned marketing. The key question is—and I know some listeners probably want some more follow-up on that—so I’ll ask a question that I think they want to ask:

Why do you think marketing is the real cure to distance yourself from the whole trap—or at least the whole burden, the uncomfortable and abusive burden—of being in-network with insurance? Why is marketing the real cure?

Naren Arulrajah: Yeah. So marketing, I think, is the real cure for a few reasons.

One is—what is marketing, right? It’s about helping the right patients find you and then choose you. That’s it.

So if the right patients are finding you and choosing you—especially the ones who appreciate quality health, the ones who want beautiful smiles—then everything changes. Most of you didn’t go to dental school to do one-tooth fillings here and there and just do patchwork dentistry, right? You want to create change, change lives, maybe even save someone’s life.

You want to create beautiful smiles. You want to get advanced training. You want to get paid more for your time.

In other words, if you work two hours doing implants, you might get paid a lot more than if you spent those same two hours doing fillings.

Naren Arulrajah: And it’s not challenging, right, to do little, simplistic, patchwork dentistry. It’s much more rewarding and challenging to do life-changing dentistry. So I think, from an emotional perspective, what I’ve noticed is that the doctors who take the jump and say, “Okay, I’m going to go after doing the dentistry I love,” they jump out of bed in the morning—versus hating themselves, getting into the car every morning, and heading into the office.

Because if you hate the kind of dentistry you’re doing—if you’re working so hard, literally paying the fat cats at the insurance company, and bringing home almost nothing compared to your qualifications, your experience, your knowledge—you’re going to be miserable. You won’t even have time to talk to people because you’re just so busy doing fix-it dentistry that pays you peanuts.

So I think marketing starts opening options.

I’ll give you a true story. This is a client of mine—I’m dating myself because we still have a relationship with that practice going back to 2011. She met me somewhere and heard about what we do. By the way, for those of you who are interested, marketing is about search engine optimization—showing up on Google. So when people are looking for all kinds of things you do, you show up again and again at the top of Google.

That’s what she wanted. She wanted to show up on Google. Marketing is also about having good websites, good landing pages, good reviews. So not only are we helping people find you through search engine optimization, but also helping them choose you—through those reviews and cases and so forth.

So she started working with us in 2011. She was a $650,000 practice, working four and a half days a week. This was in 2011. And she said, “Hey, I have nothing to lose. I’m getting really tired and sick because I’m working so hard—four and a half days a week. I just don’t want to do that anymore. Let me try marketing and see what happens.”

So she hired us. And I didn’t even speak to her for a while—she was busy doing her thing, and we were busy doing ours to get her ranking on Google and so forth. We kept in touch, of course.

And to summarize the story: in less than three years, her practice went from $650,000 to $1.3 million, and she ended up working three and a half days a week.

Naren Arulrajah: Um, so between 2011 to 2014—what happened is she started getting 30 new patients a month. And she’s like, “I don’t want to work harder, so I’m going to drop the worst PPO plan.” And only after the fact did she realize she was actually losing money on that PPO plan anyway.

In other words, she was literally paying herself by not seeing those patients—because, after everything was said and done, the amount of money she took home from those patients was net negative.

So she dropped that one plan. Then the next plan. Then the next plan. And before you know it, she ended up with all plans gone—except for one. I think she kept Delta Premier, which was around 20% of her practice. The other 80% was all fee-for-service patients.

She was doing full-mouth work. She was doing comprehensive dentistry. She was loving her life. She was working less because those full-mouth cases paid a lot more. So, in three and a half days, she was making double the money she was making in four and a half days.

So literally, she was making twice as much, working one day less.

And of course, the practice was so successful that buyers were lining up. And she decided to sell. So she sold the practice. And even today—this goes back, I guess, 16 years now—we’re still working with the new owner, who’s obviously full fee-for-service, and running an awesome, high-value, high-quality practice in the DC area.

Yeah, so I think sometimes stories are better than theory to illustrate the point. And it all started with her taking one chance, which was: “Let me start building up my marketing.”

Naren Arulrajah: And that created a snowball. A lot of people will say, “Oh, let me just jump off the cliff and then figure out how to turn on the parachute.” That, I think, is too scary.

In her case, she didn’t do that. She said, “Let me first turn on the parachute,” which was the marketing. And then, as marketing started working, then she jumped off the cliff.

So I think that’s one of the reasons why that’s a much better approach for a lot of practice owners—because it’s less risky. Once you know you have new patients coming in, it becomes easier to drop those plans.

So if you are like most people who are afraid of dropping PPO plans, I would strongly recommend you go down this road. Because now, you’ll be forced to drop them. You’ll be like, “I don’t want to work harder and get paid 50 cents on the dollar.” So you’ll start replacing the bad patients with better ones—by dropping one, two, three, four plans.

Ben Tuinei: Yeah, yeah. I love it. It points back to the concept of supply and demand, right? When you find another way to create your own demand, you don’t need insurance companies.

In fact, you don’t need them now. You know, I keep running across this number at conventions—people are saying less than 5% of people with insurance actually find their dentist by going to the PPO directory.

So that should tell you something about how patients look for their dentist—Google is number one. Social media, and other avenues outside of the PPO directories—that’s how patients are finding their dentists.

Not because you’re in-network. They don’t come to you because you’re in-network. And you’ve got to reverse that dynamic, right? <laugh>

So, yeah, this has been a really special episode.

 I, I like the topic. I like the theme. I like the advice. I love what you mentioned there in terms of the stories to kind of draw us in and help us relate to the concepts that you’ve been sharing. And I just want to thank you, Naren, for an amazing episode today.

And I want to thank our listeners for joining us again today on an amazing episode of the Insurance Untangled podcast.