How Dental Practice Membership Can Help You Boost Revenue and Get More Referrals
Whether you have an established dental office or are just about to open your own practice, you should consider running a dental practice membership program as part of your business model.
Among other things, in-house dental membership plans may enable you to:
- Increase the value of your practice
- Generate a recurring and predictable income stream
- Reduce your dependency on insurance companies
- Provide better care to your patients
- Get more referrals and repeat business
Offering lower-priced membership plans could also help you attract patients who may not be able to afford dental insurance. 19.25% of U.S. adults across racial and ethnic groups reported they faced cost barriers to dental care in 2019 – compared to 12.75% in 2005.
With this in mind, let us look at some of the ways in which dental practice membership may benefit you, your business, and your patients.
How Does Dental Practice Membership Work?
Think of dental practice membership as subscription-based dentistry. In exchange for paying a monthly or annual fee, your patients receive exclusive members’ benefits and discounts when they use your services. You may also offer tiered pricing to accommodate patients with different budgets and needs.
Ideally, you should aim to implement your membership program as soon as you open your dental office. However, you may benefit from introducing a membership plan even if you run an established practice.
5 Benefits of a Dental Practice Membership Program
Here are five reasons you should give dental practice membership serious thought:
1. It May Boost Your Practice Revenue
By offering in-house plans that are more affordable or deliver more value than standard dental insurance, you could expand your patient base to lower-income demographics who may not otherwise receive dental care.
You may also attract people that typically do not have too many good alternatives for affordable dental insurance, such as retirees and local small business owners. Some people lose their dental benefits once they retire, and private insurance may be too expensive for them. Small business owners may also find that dental membership plans are more economical than buying dental insurance and covering the co-pays and deductibles out of pocket.
Furthermore, consumer intelligence research across industries suggests that members may be more loyal and tend to buy more than non-members. Amazon, for example, has employed this strategy with great success. In 2019, Amazon Prime members
spent an average of $1,400 per year compared to just $600 for non-members.
The same goes for the dental industry, too. While non-member, uninsured patients spend $772.79 per year on average
, uninsured patients who enroll in membership programs spend an average of $1,576.79 or 104% more.
2. It Can Generate Recurring Passive Income
Practices that do not offer dental subscription plans may be more vulnerable to the ups and downs of patient demand and the whims of the market – the so-called feast-and-famine cash cycles. One month may be busy and generating a lot of revenue, but the next month may be the exact opposite.
In contrast, an in-house program can ensure that you are generating a recurring and predictable income stream, especially if you use dental membership plan software to collect patient fees and renew subscriptions automatically.
This can make it easier to manage your business, as you can plan your budget with greater certainty and reinvest in your practice by:
A membership program may also help make your practice recession-proof, as feast-and-famine businesses are often among the first to feel the impact of economic downturns. While this can be helpful for practices of all sizes, it may be particularly beneficial for smaller dental offices, as they may be more vulnerable to cash flow fluctuations.
3. It May Reduce Your Dependence on Dental Insurance
Working with dental insurance companies can have its benefits. However, the exclusive reliance on third-party policies may also complicate the way you manage your practice, including by:
- Decreasing your profit margins by making it harder for non-insured patients to access your services
- Causing you to deal with claim denials, delays, and what may be a lot of paperwork
- Diverting your attention away from patient care and toward dealing with insurance companies
If you implement an in-house dental membership program, you may be able to cut out or at least limit the middleman. This, in turn, could improve your cash flow and free up more time to spend on patient care than on dealing with insurance providers.
4. It May Result in More Referrals
A dental practice membership scheme can help you provide better and more affordable care to more people. This could help build loyalty, making it more likely for patients to return and refer their friends and family.
5. It Can Help Increase the Value of Your Practice
A well-thought-out dental subscription program may increase the value of your practice by generating recurring income and boosting your overall profit margins. As a result, this revenue model can be a wise long-term investment for your business.
If you are wondering whether practice membership programs really can generate more revenue than dental insurance, consider this: the average PPO discount is 42%
. In contrast, you can set up your membership program to offer a 10% to 20% discount, and it could still be more affordable for your patients than standard insurance premiums. Of course, how much you make will ultimately depend on the terms of your program.
Make the Most Out of Your Practice Membership Program by Getting Dentist Malpractice Insurance
A dental practice membership program can be great for your business. However, you should also consider buying dental professional liability insurance
. If you own your practice, you may want to look into malpractice insurance for practice owners
. By purchasing a policy that is suitable to your needs, you may protect yourself and your practice from financial harm and maximize the revenue potential of your membership plan.
Get a free quote today.