Episode 109: Does It Make Sense to Keep Delta Premier?

Naren: This is the Less Insurance Dependence Podcast Show with my good friend Gary Tackas and myself, Naren Arulrajah. 

Gary: We appreciate your listenership, your time and most of all, we appreciate your intention to reduce insurance dependence in your practice. Our goal is to provide information that will help you successfully reduce insurance dependence and convert your practice into a thriving and profitable dental practice that provides you with personal, professional and financial satisfaction. 

Welcome to another episode of the Less Insurance Dependence podcast. We have a great topic for you today. The topic is ‘Does it makes sense to keep Delta Premiere in my practice?’ ‘Does it makes sense to keep Delta Premiere in my practice?’ and throughout this episode, we will not only answer that question but provide some texture so that you can answer yourself, in your own practice. 

Hey, before we get to that topic though, quick announcement. On Saturday, December 5th is our last Thriving Dentist MBA workshop for 2020. It is on Saturday, December 5th. During that workshop, I will be covering the ten elements of a thriving practice. We also go through eleven very specific workshop exercises. The exercises are designed to help you apply the information in your practice. We have received very good reviews from our past attendees on the exercises and how the exercises really helped them go back into their practice and actually apply it. So, consider this as an invitation and come join us on Saturday, December 5th. It is all-day, 8 hours of CE. All done live stream. 10am – 7pm Eastern Time. 10am – 7pm Eastern Time. Go ahead and do the time conversion for wherever you are located in the country. But that’s 10am – 7pm Eastern Time. Hope to see you at that workshop! You know, this workshop would be a great way as we finish 2020 and you start to make your goals for 2021. It is my fondest hope that 2021 becomes your best year yet and I think we can help that through the content that we are sharing in the Thriving Dentist MBA workshop. Come join us!

Naren: Thank you Gary. And, today’s topic is very interesting. As many of you know, this is year 2 of the Less Insurance Dependence show. Since we started this, Gary and I started co-hosting this, Gary’s fan base has grown. He has fans in the ‘I love Dentistry’ group, he has fans on his webinars, he has fans in the Thriving Dentist Facebook group. And one of the questions that one of the fans asked and I think it’s a genuine question, ‘Hey Gary! Does it make sense to keep Delta Premiere?’ So Gary said ‘Hey! Why don’t we talk about this because that’s a good question?’ So let’s jump in.

Gary: That’s a great question, Naren. Yeah we know for all of our listeners, Delta is the Goliath, when it comes to dental insurance. It’s likely that Delta has the largest number of patients in your practice. And, likely they are the largest dental insurance company in your community. So, there are the 5,000 pound gorilla in this situation. So, very good question. And so, the doctor asked, who was on our webinar, and we opened the webinar up to Q&A. We call coaching webinars. This is a great example and he said ‘Hey Gary! Does it make sense for me to keep Delta Premiere?’ And some of you may have heard the axiom, that sometimes when you get a question, the best way to respond to the question is with a question. Before I answer that, I have a question for you. I said ‘What is your discount with Delta Premiere?’ Now, a little bit of backgorund before I share his answer.

There are thirty seven different Delta organizaqtions within the United States. They are independent, but they are connected to one another, if that makes any sense. And, in some states, you cannot be a Premiere member, for example, Arizona, you can’t be a Delta Premiere without being a Delta PPO. So, they have made that mandatory where in order to be a Premiere member, you have to be a PPO. So what they do is they rope you into their PPO. Now, other States, in other of the 37 Delta organizations, there is not 50 of them. So you might be questioning ‘Gary aren’t there 50 Delta? There are 50 states, aren’t there 50 Delta?’ Actually no, there’s 37 because some states combine. Some of the smaller States combine. So there is actually thirty seven of them. And in some, in fact many, they have done a grandfather clause. If you are already Delta Premiere, before they made this rule change, they allow you to stay Delta Premiere without being in their PPO. And I will just point-blank share my perspective on the Delta PPO plan. It is horrible. It is some of the deepest discounts I have ever seen. The Delta PPO is horrible. You don’t want to touch it. You literally lose money every time you treat a Delta PPO patient. It is costing you money to take care of that patient. However, the Premiere can be different. If your Delta organization allows you to be Premiere without being PPO, then our doctor that asked the question asked a very good question, ‘Does it make sense to keep it?’ And I asked him ‘What’s your discount under the Premiere?’ and he said 18 percent off of his UCR fees. Hmmmm. It makes me answer it in an entirely different way. Naren, would agree 18 percent discount. While it’s not good, it is a different scenario than 44 percent discount.

Naren: 100 percent Gary. Absolutely.

Gary: So I said, ‘hmmm. Interesting. 18 per cent.’ He said, ‘Yeah, you know I did the math.’ And he said it. First I didn’t believe it, rechecked it. He said ‘No, it’s in fact, 18 percent.’ So here’s how I answered the question, I said, ‘Doctor, get rid of every other PPO plan first. Get rid of every other because you know all the other ones are going to be much more egregious in terms of the discount. Get rid of it for real and save that one for last. And then dependeing on how it goes with you resigning from the other plans, what I mean specifically by that, I said, doctor measure the percentage of the network patients that you keep when you go out of network. And, if you are hitting the mark that we strive for with our clients, you know what we are striving for in my coaching, right. So let me put you on the spot and let me see if you are paying attention. What percent of existing patients who are in network do we strive to keep? It is actually a range. What’s the percent that we strive for with our clients that we keep in the practice when we go out of network. 

Naren: I believe it is eighty five percent. And the range might be eighty to ninety percent. 

Gary: Actually, eighty five to ninety percent is what we strive. Eighty five to ninety percent. That’s our goal. And by the way, not only is that our goal, that’s what we are achieving with our clients. It feels really good. You know, really good. 

Naren: The reason it is really good is, instead of collecting sixty two cents on the dollar or sixty cents on the dollar. 

Gary: I would say it’s a fourty four percent discount, so go ahead and use that.

Naren: So instead of collecting fifty six cents on the dollars on hundred percent of your clients, you get to keep hundred percent of the money on eighty five to ninety percent of the clients. So, just by letting go, you are making more money and working less. So it’s just a win on day 1. You know, even if nothing changes, just that change itself is a win. 

Gary: What else have we proven? You know, I will just make up a situation. Let’s say the doctor had twelve plans and has successfully gone on network for 11 with an eighty seven percent retention rate. What have we learnt and the last one is left with Delta Premiere? What we have learned is that he can go out of network and keep the majority of those patients. So, my answer to him was see how you do, make that one your last one to go out of network. Let me give you another comparison. Naren, as you know and our listeners know, one of the strategies we use is to create an in-office membership plan. An in-office membership plan, where we attract people who don’t have insurance. And, we provide kind of like an Amazon Prime card for your practice or a costco membership card for your practice. And I recommend that you provide a savings for all your membership plans patients and I recommend the 10 percent savings. Remember, we tested with many many many clients, we tested to find the sweet spot of what percent savings it should be. We tested twenty percent, eighteen percent, fifteen percent, twelve percent, ten percent and eight percent. Obviously, we wanted the discount to be as low as possible to not adversely affect the practice but also high enough to encourage people to sign up. And what we learnt was that ten percent was the sweet spot. So, if you are going to offer a ten percent savings to your membership patients, the difference between ten percent and eighteen percent isn’t huge. And it might make sense to keep it in that case. Now, remember that , a practice can die a slow painful death, you know by these increase in costs and pretty soon, you are out of control again. So you want to be careful. I mean the last time I checked, I’d rather give up ten percent than eighteen percent. Would you agree, Naren?

Naren: 100 percent Gary.

Gary: But there could be a case for keeping that in, you know, keeping that Delta Premiere if, in fact, your discount rate was that low. Now, I was a bit shocked when he said that the difference between his usual fees and the Premiere was eighteen percent. I do believe that. I believe that could be the case. But the first thing you need to do as a listener is check your status and find out what it is. You may find that it’s more like thirty, thirty four, thirty five percent. It will be better than the PPO. It will be lower than the PPO but it still might be something that you can’t live with. At eighteen, frankly it is borderline to me. It is borderline. But I would make the decision based on the information that I shared. Get rid of every other one first. Track your percentage of patients you retain and then make the decision of abandoning Delta Premiere. Now one thing I will tell you and I believe I can predict this with confidence, Delta’s not on your side. They are not on your side. Their fees, that they will be paying you in the future, will be going down, not up. It’s not going to get any better than that. Better than the eighteen percent. It is going to go up, the discount rate is going to go up over time. So you might want to just pull the bandaid off right now. If you have been successful and you have had an eighty five plus patient retention as you go out of network, you might as well pull off the bandaid right now. Because the future doesn’t look bright, in terms of the changes that Delta will make. They are not going to be in favour of paying you higher fees in the future. Those fees will be going down. I can predict that with confidence because, frankly, it is many years of history of seeing that. And, history is likely to repeat itself in that scenario. So Naren, hope I answered the question. There is some grey area in there and there are some information that our listeners need to gather to be able to answer that question as it relates to them. But it is a very very good question. And, you know, I am leaning toward, if you are successful with the other plans, go ahead and pull the bandaid off and abandon Delta Premiere. 

One of the challenges, let’s say this doctor, in the future, I will assume for a minute that he is a solo practitioner. Let’s say in the future, he wants to add an associate doctor. Because the associate doctor wasn’t Premiere before, that Associate will need to be a Delta PPO and that’s where it starts to get really messy. So, I think, when you look at the future, the options are better if doctor’s completely out of network and not entangled with Delta Premiere and Delta PPO. So, his options in the future would be better if he resigned from Delta Premiere rather than be entangled.

Naren: Yeah, actually, this is a follow-up question that particular individual asked. And I think it was a ‘she.’ I know you didn’t want to know the name of the person, for privacy reasons. But I think this was the exact question ‘I am looking to hire anoother associate. What do I do? I am stuck right now.’ 

Gary: Well, you know, in that case, you really want to strongly consider dropping Premiere because of the fact that your associates cannot be required to be in the PPO. Then it gets really messy because if doctors are covering for each other, they can get different treatment, the way Delta treats them. And, you don’t want to get into a place where patients can only see this doctor or see only that doctor. Because, what happens if the owner doctor wants to take some time off, have the associate doctor cover for her and then it’s going to get really messy, because of the way the rules are within the PPO plan. And it can get very very difficult. I have seen practices where the owner doctor is completely free for service and the associate doctor or doctors are in network, but it’s a very difficult scenario to manage and in most cases, it’s a mess. It is a mess. It is nothing short of a mess, and nothing that I would recommend at all. Now Naren, one thing that comes to mind, you know, as doctors are considering this, eighteen percent discount. We have seen this now. We share common clients. Would you agree Naren that eighteen percent is as good as we have seen, when it comes to discounts?

Naren: Absolutely. Compared to forty four percent, it is better for sure. 

Gary: Let’s compare it to something else. How about 1.6 percent? Would you rather give up 1.6 or would you rather give up 18. Take as long as you like. 

Naren: Absolutely. 1.6 because it is one-tenth of 18. 

Gary: And what’s my reference to that? My reference is what we are spending in my practice on marketing, that’s a number that I projected for 2020. You know, we are almost ten months in the way there. 2020 is recording this. We are into spending about 1.6 percent of our revenue on marketing in the year 2020. That difference, it is sixteen percent. Think about the difference that extra sixteen percent can make for you, doctor. Think about that. You know, on those Delta patients, just pull up your report on what you produced last year on Delta Premiere patients. Pull up that report. And let’s say, hypothetically, I am making up numbers Naren, just to make it useful. Let’s say that number was $500,000 worth of dentistry. Will be a significant number like that because of how many patients have Delta in your community. If it was $500,000, sixteen percent is eighty thousand. How would you feel with an extra eighty thousand dollars in your bank account? You know, you could use it to accelerate debt retirement. You could use it as a pension contribution. You could distribute some of it to raises, if that was appropriate for your team members. You could buy technology with cash, rather than having to take out a loan to do it. And when you put it that way, you know, I made up a number but I made up a number that I think is very realistic for our Delta doctors that have Delta. Eighty thousand dollars difference. You know when you look it that way, it kind of makes pulling the bandaid an obvious answer, doesn’t it?

Naren: Absolutely Gary. And I think, this is one of those things that will keep on giving. It is not eighty thousand one time. It is every single year, you have an extra eighty thousand dollars.

Gary: And I don’t know the age of the doctor that asked that question. But let’s assume for a minute that she is mid-career, just project that over the next ten years. That’s now eight hundred thousand dollars. And imagine, if that went into your pension plan, or went into your savings plan, how different your life would be in just ten years to have an extra eight hundred thousand dollars. By the way, Naren, you didn’t ask me to do this but I feel it ties in here directly. As a listener, if you want to figure out how to spend 1.6 percent instead of whatever you are currently spending on your discounts, I encourage you to look into ekwa agency, the marketing agency that Naren has created and he is the CEO and founder. And, Naren, you been kind enough to offer a free marketing strategy session to any of our listeners where they can sit down with Leila Stone and she can share information about what is working and what isn’t working with the current marketing plan and show them really cool information from Google Analytics about how to significantly enhance their new patient flow and spend a fraction of what they are currently spending. I like all of our listeners to think about those discounts that is the amount of money that you are giving away to Delta. I want you to think about it as a marketing expense, because you are paying Delta to provide you patients. And 1.6 percent is really a great position to be in for the practice, rather than the forty four percent or even the eighteen percent that might be available in that particular Delta organization through Delta Premiere. So put a link if you would Naren, in the shownotes, those are at lessinsurancedependence.com Just scroll down, click on it, it will be an automatic link that you can schedule a time that is convenient to you. You can sit down with Leila and she can share that information with you. Very very useful.

So Naren, this was a great topic. And I think we gave the doctors some thing to think about in terms, because on the surface, eighteen percent doesn’t sound so bad. Doesn’t seem so bad. But, compared to what? Compared to forty four, it isn’t so bad, Compared to 1.6. Not so much. You know, Naren, as we come into the home stretch here, I want to take a minute and thank our listeners. We have been very fortunate to gain lots of new listeners to Less Insurance Dependence podcast. I have a request for you, doctors, if you would be kind enough to share this with some of your colleagues, let them know. We’ve gotten some neat emails recently from listeners that say that they been on a binge listening pattern, you know they are so intrigued, kind of like netflix, you know where you get on a binge watching thing. Woah, they been on a binge listening. One of the reasons I am encouraging you to share it with someone is that, let’s face it, you are in the distinct minority percentage wise, in terms of dentists that are working on insurance dependence. About ninety seven percent of the dentists in the United States are heavily involved with PPO plans. There is only about three percent that don’t own it. And it is good to hang around others who are going through the same journey of yours to cross support each other. Doctor, maybe you have a classmate from dental school. Maybe you have a CE companion that you take a lot of your dental CE with. Please share it with him or her and hopefully you can have a partner to go through some of these challenges with you. You can talk some of the same language. Couple of other things that you can do to support our work here at Less Insurance Dependence Podcast, you can write us a review. Jump on iTunes, write us a review. That helps more dentists find us on iTunes. The third thing that you can do, hit the subscribe button, you can do that on iTunes, Google Play, Spotify, whatever your podcast directory of choice is. Just hit subscribe. It means every Thursday when we upload a new show, it will be automatically updloaded for your listening convenience. On that note I want to say thanks to every one of you, we appreciate you  and thanks for joining us on this Less Insruance Dependence podcast.