The Membership Income Crossover

Savings Plan vs Membership Plan

This month we are talking about an important distinction, which is, should you offer a membership plan or should you offer an in-office savings plan to your patients? While they may sound similar on the surface? There are some very important and different distinctions. 

Recently I read an article and it was talking about Costco versus Sam’s club. (Costco has been discussed before in Advanced Membership Mastery.) Sam’s club has about a hundred more stores in the US than Costco, but Costco’s revenue is more than double Sam’s club. There are some things that Costco does exceptionally well, but the important thing to remember is that as a Costco member, you have an annual membership, not an annual savings plan.

If you use verbiage in your practice that makes dentistry sound expensive, or not worth it, or, if your team says things like, “well, it’s going to cost this much” or, “well, this isn’t covered by your insurance” or even “this isn’t covered by your savings plan,” then you’re going to groom your patients to think that way.

So the question I want you to consider in your practice is that you have three options that we call the membership income crossover. The membership income crossover is when you get to the point where two thirds or more of your practice revenue is coming from your patients, not from insurance.

This can include both insured and non-insured patients, but 66% or more of your collections revenues needs to come from your patients. This can include credit cards, patient financing, FSA, HSA, checks, and cash (including self-pay and co-pays).

These can be non-covered services and these can be membership exclusive services. When you hit the membership income crossover, that means at least two thirds of your practice revenue is coming from these sources rather than insurance.

The magic lies in the power that it gives you, with a lot of freedom and a lot of confidence to really master and make decisions for the future of your practice.

So what are the three questions that I alluded to earlier? Here they are:

  1. Would you rather do more for fewer patients?
  2. Would you rather do less for more patients?
  3. Would you rather scale and do more for more patients? 

Option one, doing more for fewer patients, would be what some people would call a boutique practice or a comprehensive practice. This is where you’re not trying to appeal to everybody, but you’re getting more production, more collections, more treatment provided for fewer patients. This can be a great model if you’re a single doctor and your goal is to not get on the insurance bandwagon or discount all of your treatment. If you feel that you’re just running and running and running and continually doing more for less. Especially right now while we’re fighting off inflation and the rising cost of doing business. 

If you go down that insurance path (which I’m not saying is right or wrong, it just depends) you just have to know the nature of the beast. You will have to continue to do more for less. So you have to be incredibly efficient, incredibly lean, and you can’t kid yourself into being the high end, best quality, best relationship practice. You won’t be spending more time with your patients in creating a 10 minute comprehensive evaluation (or longer) with your patients.

Option two would be less for more patients. That would be where you were spending your time with patients for just a few minutes. You’re likely going to be personally doing a ton of crowns, fillings and emergency treatment and lots of insurance with PPO and/or HMO plans to grow. Just like Maslow’s 4 levels of learning, you need to be “consciously competent” to make this model work for you. 

Not right or wrong, just what it is, but this is where your aim has to be quantity over highest quality. At Pinecrest Practice Growth, we would never recommend you do less than standard clinical treatment, but at the same time, you’re not going to be able to provide top shelf treatment and still create a profit with this model.

That being said, there are some strategies you can implement, such as implementing HITECH fees that you can charge your patients for ethically and legally, and that are in their best interests (for more on that you can read more on previous newsletters or on our podcast, The Practice X-Factor, where we’ve talked about that…

For full access to these tools and tips, join the Advanced Membership Mastery Network today.

If you identify with these principles you may be a good candidate…

  • The ache to achieve a truly independent practice.
  • The drive to move the needle in your practice to something truly great.
  • The pull to do something that really matters.
  • The longing to move people in your community to join you.
  • The desire to heal the crippled smiles, comfort the “uninsured”, set the record straight about what insurance is and what it isn’t
  • The thirst to make big leaps in growth.
  • The aspiration to leave a practice legacy…whether you’re 32 or 68.

You cannot even fathom why some folks are content to just “do what their insurance covers”. But their lack of information, benefits or understanding isn’t their fault. It’s how the “big boys” talk to their HR department at work. Your preoccupation is in this calling you have to transform your practice, reform the way and why patients want to see you, be a catalyst of change for the health and benefit of your patients, your team and your community.

Do YOU know, deep down, that YOU are a mover and a shaker, a driven clinician and business owner, a trailblazer, an honest, integral, doctor of doing what is right (not what you are told to do by insurance companies)? If not, ignore this message and move on with the rest of your day. If the answer is yes…I’m talking to you. 

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