Home Dental Episode #569: Dental Insurance Independence, with Dr. Mark Murphy

Episode #569: Dental Insurance Independence, with Dr. Mark Murphy

by adminjay

Episode Resources:

Main Takeaways:

Do the math.

Identify your value proposition.

Share your value proposition with patients.

Write the dreaded letter — but do it strategically.

Communicate your letter and plan to each one of your patients. 


“We are free to choose however we want to practice, wherever we want to practice, whenever we want to practice. This is still maybe the greatest profession ever invented. We get to do whatever it is we want to do, work on whom we want, build the team that we want, do the kind of dentistry we want, and accept the kind of reimbursement models that we want. And I don’t care about the economy. I don’t care about insurance reimbursement, availability, or no availability of good employee bases. It might take a little longer in some locations, no doubt. It might be harder out in the middle of nowhere land to go nonpar, to live in that kind of world. It might be harder to do comprehensive care. But I’ve seen practices still accomplish that if they’re willing to work that path, and chase that dream, and make that their vision. It’ll become their reality. We are free to choose however we want to do dentistry, whoever we want to be, what for. And you can’t do that in too many other things. It is incredible.” (5:41—6:34)

“I’m from the Detroit metropolitan area. And so, my joke is, Frank Sinatra said it a ton, if we can do it here, we can do it anywhere. In the last decade, we were the only state to lose population. The city of Detroit itself lost 25% of its population. We’re as insurance-ridden as anybody else. We had the deepest, darkest economic woes of anybody. And yet, dentistry survived. And guess what? Guess who survived the best? Dentists who were extremely insurance-dependent? I think not. In fact, it was dentists who were more insurance-independent. The less that you were feeding from the hind teat that we might call insurance, the more you were dependent on that, the more you were dependent on whatever happened in the economy. And the less dependent you were on that, the freer you were to practice the way you wanted.” (7:50—8:37)

“Don’t mistake me, ’08, ’09, tough years even for cosmetic dentists, tough years for insurance-independent dentists. In our practice where I used to be, and the young man that bought my practice now is doing great, he was flat in ’08 and ’09. But flat was like being up five or six or seven percent in those years because the economy was tanking. So, if you stayed flat in a nonpar insurance world in a metropolitan area like Detroit, you can do anything.” (8:37—8:59)

“Someone will say, ‘I can’t do that [be insurance-independent]. I have too much debt.’ I’d say, ‘Oh, wait a minute. I think what you said was you can’t do that now. That’s correct. You probably can’t do that now.’ So, when you say, ‘I had this dream. I went to dental school. I had these visions of how I practice. And then, I got saddled with $300,000 and $400,000 worth of debt. I got out. I bought this practice. I inherited the staff that isn’t very motivated. They’re not alive. They can’t see the future well.’ And you say to yourself, ‘I can’t get to my dream.’ And I would say, stop! There’s a comma in that sentence. By the end of the year. Maybe by the end of next year. But guess what? If you start that sentence with, ‘In five years, my practice can be . . .’ then, it starts to become a believable path.” (9:01—9:39)

“The challenge we have is we put these constraints on ourselves like, ‘I can’t have that now.’ And you’re right. You can’t have that now. It’s going to take time. How much time? Don’t know. If you mean now, we’re out. If you say to yourself, ‘I’m willing to work at that over time,’ now, if you’re 65 and close to retirement, you’re screwed. But if you’re 32, plenty of time.” (9:40—9:58)

“The first thing I would say when we talk about where would I start, let’s pretend for a second that we are asking the question in the opposite way. Where wouldn’t I start? Where I wouldn’t start is to say, ‘I’m fed up with insurance. I don’t like it anymore. I’m going to cut my ties. The umbilical cord is clipped and I’m off on my own.’ Without knowing what risk that carries, without knowing what financial barriers were in your way, without knowing how your team felt — because you can’t get there by yourself — without knowing how your patients really felt about that, without knowing whether you’ve really built a conversation with them, that they understood the value difference of seeing you versus seeing a participating or PPO dentist, if you don’t do that, man, the risk is high.” (10:36—11:14)

“The mistake that most of us have made is trying to leave insurance without the right kind of preparation, the right kind of steps in place, the right kind of risk analysis so that we can plan and mitigate appropriately.” We don’t do that because we didn’t go to business school. And so, we don’t think in terms of some of the skillsets that we need to make those kinds of decisions.” (11:14—11:33)

“Dentistry has given up 22% of their average income over the last 11 years. That’s the ADA statistics. Two percent per year over 11 years. You can see those graphs. Now, if you took away 22% from somebody tomorrow, they would throw open the sash and scream, ‘I’m mad as hell!’ But if you took two points a year every year for 10 to 12 years, it’s like putting a frog in warm water and bringing him up to a boil. They never jump out. And that’s what’s been happening to us because reimbursements are going down, debt is going up, the business model for dentistry is getting more and more challenging. And so, what we’re going to see is more people, that’s why you said we’ve had such demand on it, more people saying, ‘How do I get rid of insurance? How do I move in that direction?’ So, the first thing I’d say is, don’t jump out of the pot and into the fire.” (11:55—12:37)

“There are steps. There’s a sequence. There’s a planning system you can utilize to do that, and it’s very simple. When we look at it, we look at it in five steps. The first thing that’s most important is you really have to do the math. It’s really simple. You have to do the math. And the math is, what percentage of your patients have what kind of insurance? What kind of write-offs are you taking? You put that into a pretty simple algorithm. Anyone can do this themselves. It’s not easy, but you can do it yourself. If half your patients were PPO and half your patients were fee-for-service and you’re collecting your full fee, you might be making 30% off your cash patients and 10% off your PPO patients. So, your blended take, if you will — and that’s the wrong way to look at a business. I understand that. We could go into a whole different discussion on that — is you’re netting 20%. So, you have to figure out, is it Delta? Is it Blue Cross? Is it one of the Aetnas? Is it a Cigna PPO? There are so many different things. And so, you have to categorize each of those, look at how many patients, how many dollars, how much write-off. Do the analysis and figure out, what’s my risk of leaving that group of patients behind? How many of those patients would have to come with me in the new world where I wasn’t going to participate with that discounted fee schedule for me to come out whole?” (13:01—14:15)

“It’s never this simple. But in the simpler example I’ve just described, 30% return on my investment from half my population, 10% from the other, the blended result is I get to keep 20% of a $1 million practice. I’m making a couple bills a year. Life is great. The risk-weighted analysis is pretty simple in that case. If I took a look at that 10% population and I went to full-fee on them, I didn’t participate in that fee schedule reduction, two-thirds of them could leave. Two-thirds of them could leave, and I’d be able to retain 30% on the diminished population. And what would my practice look like? Let me think. Same dollars in my pocket at the end of the year. Same net. I’d see fewer patients. I would do fewer procedures. I would work fewer hours. Who doesn’t like that so far?” (14:17—15:02)

“We don’t do the math and realize that in that — again, oversimplified version — we would only need to keep one-third of that population of patients. And I don’t know too many dentists who have such a poor relationship with their patients that a third of them wouldn’t stay. So, the first thing is you have to understand the math. Now, if it’s 90% you have to keep, the risk is higher. If it’s 33%, it’s lower. So, we really have to understand the risk of a population of patients. And it’s usually not one singularity, it’s a blend of Delta, and Blue Cross, and Cigna this, and PPO this. And we have to put that together and understand so that maybe you decide you’re going to leave these couple of PPOs first. Then, you’re going to look at leaving these couple of PPOs. And if you haven’t gotten hurt too bad there, then I’m going to go after Blue Cross and Delta. There’s a way of mitigating that risk and managing that risk. But first, you have to do the math.” (15:03—15:51)

“I want to know your full production before you have any insurance write-offs or other kinds of write-offs. I want to know your full production, and then your insurance write-offs separated off from the total write-offs because I want to know how much are you really giving away to the insurance companies, and then how much do you choose to give away personally, or you lose in accounts receivable that you don’t collect. We want to put those in different buckets. I want to see what the bucket is. So, if you have a $1 million practice and you’re writing off $200,000 to the insurance companies, you have $1 million in production, and $750,000 in collection, and $700,000 of that is just from the insurance, and the other $50,000 is from other, then I start to get a picture of how much you’re writing off for insurance.” (16:14—16:52)

“I want to know how many patients have insurance that is being written off, and then, categorically, which ones. And if we’ve got a good dentist who can really dive into their data and dive into their software, I’d like you to take a look at those major procedures that you do and figure out what’s the average percentage write-off for your Delta patients, for your Blue Cross patients, for your Cigna this, for your Aetna that because you might have varying ones. And the risk weighted analysis might lead us to say we should take a look at these couple of insurance relationships, PPOs, whatever they are first and other ones later because these don’t seem to be as bad. And so, we might parse them out in groups. That means it’s going to take me longer because you’ll see that there’s a six-month cycle to this kind of information flow. But I need to know how many patients, how many insurances.” (16:53—17:43)

“I also need to know what your P&L looks like because your P&L is going to tell me, overall, based on that production model and whatever the mix of insurances and collection is, how do you get to net out what you net out. And I don’t want the P&L that say, ‘Here’s what I’m going to pay taxes on.’ I couldn’t care less about that. I want the P&L that says, ‘Here’s what I really make in total compensation.’ That’s a different number. That’s, how much do I pay myself, how much do I pay into my retirement plan, I’ve got my kids’ cell phones, an extra car, whatever else is going on in your life, all good by me. I’m sure you’ve got that all figured out with your accountant. But what is your real, total compensation on that practice revenue? Because that’s what I’m going to use as the standard to say, ‘This mix of insurances gets us to this number. How does a different mix maybe get us there? How many patients do we need to keep?” (17:43—18:28)

“The early part of the year in the spring, everybody is looking at it’s tax time, and people are having tax discussions. And people will talk about their tax freedom day, and they’ll say that it’s after this time, I’ve paid all my taxes for the year, and I get to keep the rest of the money. We should have a practice freedom day. How far into the year do you have to work to pay those write-offs, which are like a tax, if you will, to get access to those pools of patients, before you really start to get paid. And I think it would jade everybody’s thinking a little bit about how advantageous it is to belong to every one of those plans.” (19:14—19:45)

“Step number two is identifying a value proposition. It could be creating a value proposition for your practice. There are likely some things that you do in your practice with your team for your patients that are different/better, innovative, more comfortable, more convenient, or something than someone around you does. If there isn’t, we’ve got to go find some of those and add them to your mix of services.” (19:52—20:17)

“At Pankey, we teach a style of dentistry that’s a little bit innovative. It’s a little bit different, and it’s a little bit more comprehensive, and it usually requires a few more things than what we might say “average” dentistry is doing. We’re going to do more full-arch impressions. We’re going to make better provisional crowns. We’re going to do more dentistry on an articulator. And if I do that kind of stuff, if I have it on the shelf and I really can identify what that is with my team so that they’re on board with this discussion, not just me telling them but them saying, ‘Oh, yeah. Here’s what we do. Our hours are better. The dentistry we do is better. Our provisionals are better.’ They’ve got a long list of stuff that they’re very proud that, ‘We do better than the average dentist.’ I want to take that all, put it in a big brainstorming session where we do that with the team, and we come up with a list of value proposition items.” (20:26— 21:12)

“We do a couple of business things called a KJ analysis or an RWW, it’s called a Real-Win-Worth analysis. And we look through that list and you line them up to say, ‘Which ones carry the most value? Which ones are the easiest to talk about? Which ones have the best real value to us to explain to patients that they’re in a different place?’ And we want to do that, why? Because down the road, we’re going to have a conversation with that patient about why they might want to stay in this practice instead of going to another practice when it costs them a little bit more money to stay here. And if they don’t really understand that value proposition, then they’re more likely to leave. So, I want to mitigate the risk by my second step, identifying the value propositions that we can incorporate into patient conversations on a daily basis.” (21:13—21:57)

“We have this irrational fear, this irrational feeling. We don’t sit down and do the math. We don’t sit down and think through the strategies and tactics . . . They need a business acumen wrapped around them to help protect them and guide them to make better decisions.” (23:38—23:57)

“It’s not just about the dentistry. In fact, I remember back when I moved my office one time. You’re talking about making sure we’re happy with the right thing. I moved my office, and when we opened it in a new location, we had a sign out “Coming Soon”. It was like a whole mile-and-a-half from where I was before. It wasn’t a big deal. But suddenly, we had this huge bump in new patients. Huge bump in new patients. And we normally saw six to eight new patients a month. That was a lot. We do a lot of comprehensive care, comprehensive exams, so I didn’t want more than that. That was perfect. Suddenly, we got 15 to 18 in a month. I didn’t know what to do. At least half those patients were there for the wrong reasons. You’re talking about the value proposition. They were there for the wrong reasons. They were there because we were close by, convenient. They drove by it every day. They work next door in the plant. So, they came in, and they had an expectation for a dental experience that was far different than what we gave them. They wanted the commoditized dental delivery experience that you might get from some of the corporate vendors or a less prodigious practice, where they would come in, get their teeth cleaned, I’d come in on roller skates, check for cavities, tell them that we would do something if it was covered by insurance. We’d all high-five, and everyone will live happily ever after. Instead, I’d sit there and outline an hour-and-a-half or a two-hour exam, and we’d talk about records. And patients would sit there sometimes like this. And I’d realize this patient wasn’t referred in by one of our quality patients. This person came in and said on their, “How did you find our office?” I work next door. I’ve been driving by and saw that you were going to open. I thought it’d be great to have a dental practice down the street.’” (24:12—25:46)

“If we have patients that are there for the wrong reasons, it’s challenging to elevate the value proposition in their mind. But if we have patients of record that have come to know, love and trust us, and understand who and what we are, then the identification or the ownership of the value proposition is strong. Now, step three takes us to sharing that with the patients. It doesn’t matter if I’ve got this stuff. I’ve got it on the shelf. Maybe I make exquisite provisionals and I polish them up in such a way that the gum doesn’t stick to them. I leave proximal contacts. I let tissue heal for three or four weeks before we take an impression. I mount cases in our articulator and show that to patients. I polish composites and put anatomy in them. But if I don’t explain to patient that, ‘Take a look at this restoration,’ and they go, ‘Oh, man. It looks just like a tooth. I can’t even see it,’ well, honestly, I’d say humble brag and I’d say, ‘If you’d come in to see me five, six, seven years ago, I probably would’ve done one like you have on this tooth over here. But what we have found is if we spend a few more minutes polishing and reshaping these like this, two really cool things happen. Number one, they last longer. Number two, those little nooks and crannies I put in there so it looks like a tooth, they help the tooth chew like a tooth. They’re supposed to be in there, those little nooks and crannies. And if I leave it like this one over here, it doesn’t work as well.’ That’s a value proposition conversation I just had with a patient to help them understand why my filling is a little bit better than the average or someone else’s filling. So, when I ask them to pay a little bit more, they’re more likely. Guaranteed? Nope. More likely. Why not guaranteed? People are still people. They’re just more likely. I want to keep more of those patients. I want to move the needle a little bit in my favor for retention of that body of patients. And so, it’s not just having a value proposition and identifying it, but then I’ve got to share it.” (25:47—27:26)

“Your value proposition might not be doing better dentistry. Your value proposition might be we have a more harmonious team. You care more about people. You give back to your community. They could all be behavioral things. There’s probably going to be a mix of some clinical things and a mix of some behavioral things, some environmental things. And that’s your mix of who and what you are as a value proposition. Communicating it to them is what’s critical. I love that statement that you said, ‘I could work anywhere. I choose to work here. Let me tell you why.’ Man. And then, if you go back and you deliver those kinds of goods and services to the patient, then that’s a confirmation of what they heard from that team member or a confirmation of what they heard from the referrer. It’s a confirmation. And that’s even stronger.” They say, ‘Yeah, I’ve heard that about your practice. My friend said I should come see you, that she loves going to the dentist, and I’m like, nobody loves going to the dentist. How can they say that? And I walked in, and I said, yeah, this does feel like a different place.’ It had nothing to do with the clinical dentistry. Yet, that might be the environment where somebody knows to care enough or to display their caring enough, to listen well enough, nonjudgmentally, in an unconditionally loving, free kind of environment that’s safe that some people say, ‘I couldn’t imagine going anywhere else.’ And that might have nothing to do with the dentistry.” (29:52—31:06)

“I’m so embarrassed. I’ve got to tell you one of the worst things I’ve ever done. I graduated in 1981, and we had a lot of General Motors, and Ford, and Chrysler patients out here, and OEMs. Great insurance. Ninety percent, $1,200 or $1,500 bucks for the coverage per year. Back then, my crown fee was $300. So, the worst thing I’ve ever done for dentistry is, those patients who’d come in and I’d say, ‘You need this crown, this crown, this crown, this crown, and this crown,’ and they’d say, ‘Does my insurance cover it?’ And I’d say, ‘Hell yes. Knock yourself out.’ And some doctors would waive that 10% copay. We didn’t do that, but some did. But when $1,200 or $1,500 allowed you to do four or five crowns, we taught those patients to become insurance-dependent. We taught them to think like it was an entitlement and like it was a third party evaluating the necessity of this treatment plan. Fast-forward to today and it’s, for me, 35 years later, and they pay the same amount. We forgot to adjust that puppy for inflation. We made a lot of mistakes. And it still covers $1,200 and $1,500. And now, that covers one crown and two cleanings a year, and not too well.” (34:57—36:00)

“We’ve created this own world for ourselves. That’s actually good news, if you’re sitting in my skin. I say that’s great news. If we’ve created this, we could create something else. That means we’ve got to spend some time, effort, and energy unlearning for people about this entitlement program and what insurance is and what it isn’t. Now, the trouble is, the ADA is not going to do that for us. Your local state dental society isn’t going to do this for us. No manufacturer is going to put on a multi-million-dollar ad campaign. We’ve have to do that mono a mano, womano a womano. One person to one person conversations, face to face, and that’s how we’re going to win.” (36:02—36:33)

“Moving away from insurance is not mechanical. You can do the math, but it’s behavioral. You and your team — not you — you and your team — in fact, your team, then you, if you can help it, have to own the value proposition that you’re going to share with the patient. If you think that’s a good idea, and you sit in your upper echelon and look down on your team and tell them what they’re going to do, they will nod and they will smile for two or three days of the first week, an hour-and-a-half for two of the second week, but they will wear you down, and they will win. They will win the day. It’s about engaging your team with good leadership skills, about painting a picture of a preferred future that they might want to enjoy along with you. It’s about sharing that pie when it grows. Because if we end up with fewer patients but we end up making more money doing more of the dentistry that fulfills us, and helping more of our patients have healthy mouths, we should all win. It isn’t for me to make more money. We should all win. Patients should win, my team should win, and I should win.” (36:45—37:44)

“When I went nonpar in 1991, it took me forever to get there. When I consult with people now and I talk to them about doing it, it took me forever to get there. Why? Well, because I knew I wanted to go there right away. I was scared. I knew I wanted to go there, but my team wasn’t ready. And I was more concerned with sending the value proposition message to my patients than I was with my team. The mistake I made was not putting my team first, then my patient population. So, it probably took me two-and-a-half or three years to get there.” (37:45—38:17)

“Back in 1991, I didn’t understand much about strategy, tactics, coordinating that with my vision and my dream of how I wanted to practice. I just knew that insurance was in my way, and I wanted to get rid of it. And so, I conjured up this idea that — we had already been pretty good about the value proposition. So, again, I didn’t have a strategy that said this is step one, two, three, four, and five, for me back then. I did not have that. I’ve looked backwards and seen that that’s kind of what I did, and then I can package that. We’ve done it with several practices and been very successful, so I can tell you that it works well. But with [my mother-in-law], she always saw me frustrated. Now, she cares about me differently than she might care about another boss. I mean, it was great to have your mother-in-law at the front desk (42:55—

“I’m working with a couple of practices now who left [insurance] abruptly, had a disastrous effect, and then went back to participating with insurance, and they’re not leaving in a more organized, coordinated, strategic fashion. But even there, in one of the practices, there are a couple of team members who were around back when they did it the first time. And man, you ought to listen to those stories. ‘You know, the last time we did this,’ I go, ‘Well, the last time you did this, we didn’t do it this way. The last time, we jumped off the cliff. This time, we’re walking down the trail alongside the cliff. You remember the difference there?’ And that’s what you have to have, is a discussion. You have to bring them back home because it is so behavioral.” (44:54—45:34)

“Let’s think about a couple of different categories. I have a full fee over here that I’d like to get. And then, over here, I have a fee that I can’t get the full fee because either there’s a UCR — usual, customary, and reasonable — delineation by an insurance carrier that I’ve participated with, or there’s a PPO discount on top of that. Over here on the full fee side, you may have insurance. I may bill your insurance, and I might have a $1,400 fee, and the insurance company might say, ‘We only approve $1,100.’ I’d say, ‘Well, tell me how that works.’ ‘Well, we’re going to pay 50%. We’ll pay $550, and then the patient could pay the rest.’ ‘And I go, wait a minute. What’s the rest?’ And they go, ‘Well, your fee was $1,400. We’ll pay $550. And then, the patient can pay $850.’ If the patient pays $850 and then I’m back to my full $1,400 fee, I don’t care that they have insurance. To me, that’s the same as a cash patient. That’s fee-for-service on non-participating, nonpar with any fee reduction in that patient population. That’s what I mean by nonpar. I should say full-fee patients. Patients I get the full fee on.” Over here, I go, ‘Wait a minute. It’s Delta. It’s Blue Cross.’ It’s any one of the other carriers who might say, ‘If you want the check to come to you, doctor, then you’re going to have to agree to our fee schedule.’ I’ll say, ‘Well, how is it?’ ‘Well, it’s about 10% or 15% off of your normal fees.’ ‘For the benefit of having the check come to me, maybe I’ll elect to make that decision. Or maybe the declining reimbursements are starting to bother me and I’m going to elect to leave that decision.’ That’s what we’re talking about. And then, PPOs are over here a little bit further, and there’s another 10% or 15% or 10% off. But in the PPO world or the UCR fee reduction world, there’s an insurance-dependency, and they determine the maximum fee. Full fair fee, all of these together, some discounting to my full fee that I have to accept. And here’s the worst part. I can’t bill the balance to the patient. It just disappears. It becomes an accounting thing. And I can’t bill the full fee amount on the extra crowns I do or the extra procedures with most of those insurance companies. Most of them will have you sign an agreement that says, ‘If this is your UCR, your usual, customary, and reasonable, or your PPO fee with us, that’s the same fee you have to charge for anything you do for that patient, even if they’ve exceeded their insurance benefit for the year and want to have comprehensive care done. Man, that’s tough. That’s tough. That’s why you’ve seen some of these in-house discounts for fees, and you’ve seen some of them work, because that discount extend ad infinitum rather than some maximum amount.” (46:10—48:44)

“The challenge is, most dentists think that the only lever they have to pull on is cost out. So, when they see these fee reductions and they realize they’re not making as much money, they look for a cheaper lab. They don’t give their team as many raises. They take away some benefits. They try to cut costs. They use their gloves and rinse them out three times. They turn the spit-sucker around twice. You know, all the kind of stuff you can do to save a buck — I’m just joking. I haven’t really seen that with gloves or the spit-sucker. But when they run out of that, what do they do? Well, we’ve had a practice that when they left two of their worst PPOs, one of them came back and renegotiated fees. So, what is true is with PPO fees, you can reach out. And if you’re a lone provider or a rare provider in a geographic area, they want you there because they as an insurance carrier want to be able to say, ‘We have a provider in that geography.’ Then, you’re in a more negotiable position. You’re in a better place to say, ‘Hey, I don’t think these fees are fair. I’m either going to leave, or you’ve got to raise your fees to something that I can live with.’ And the discussion centers around what their cost basis is. Because if the dentist is making 30% but the fee is knocked down 40%, they’re actually paying to do the crown, paying to do the filling. I had a dentist once tell me, ‘I know I don’t make as much on those crowns.’ And I said, ‘No, no. It’s not that you don’t make as much. You actually reach into your pocket and help pay the lab bill for that patient when they walk out the door.’ If you didn’t see that patient, you’d make more money because you keep 30% and they’re taking aways 40% of your fee. Not seeing that patient, you’d make more money. ‘But I wouldn’t be as busy.’ That’s correct. Your revenue wouldn’t be as high. That’s correct. But you’d have more money in your pocket. Which do you want? Do you want to brag about your $1 million practice, or do you want to have more cash in your jeans? You tell me. But that is negotiable.” (49:17—50:56)

“Somebody who might’ve been listening to this might’ve been turned off by my discussion already. Let me be very clear. I’m talking about if somebody’s vision, if somebody’s dream, if somebody’s inspiration is to practice this way, then here are some things they need to consider with this insurance relationship. But it’s okay, if somebody’s dream is to say, ‘Listen, I want to see as many people as I can. I want to help as many people as I can, do as many procedures as I can. I’m okay if I don’t make as much money. I’m okay if the fee knockdowns are huge. I’m okay if I make less than what the average dentists makes and I see more people and work more hours. I just want to help humanity more. Honestly, I think you’re a little nuts. But I’ll give you a high-five. Because if that’s your intentional dream and vision of how you want to practice dentistry and what you want to do — but I don’t think that’s true most of the time. I think, most of the time, most dentists are wishing that they could do more comprehensive care and insurance wasn’t getting in the way between them and the patient. So, when I’m talking, there is nothing wrong with participating with every PPO that comes along, comma, if that’s part of your dream. If that’s your intention, I’ll think you’re weird. But I will support it. But if it’s not your intention and you’re not happy, I’m going to come all the way back to the beginning of our conversation. You are free to choose a different model for how you want to practice dentistry. It might not be tomorrow, or next week, next month, next year. It might take some time to get there. But truly, if you start the sentence with, ‘In five years, my practice will be . . .’ then, I start to believe it. You can have hope. You can practice any way you want.” (51:22—52:53)

“If you had great demand on you and your practice and your services, you had good growth, you could then start to segregate which kind of growth you wanted to take. Now, it’s tough to do if I don’t have a full schedule. It’s tough to do if I’m just trying to make enough money to pay my bills. I just want a warm body in the chair, and I almost don’t care what I get paid. Then, we could talk about incremental income, empty chair time, filling that, how much more valuable that is than another — sure. That’s a different discussion. You’re busy. You’re full. We’ve seen this with practices. They’re busy, they’re full, they’re jamming. They have too many new patients. Great problem to have. And we see this. Then great, let’s start to segregate, like you said, our filtering mechanisms at the front door so that we get more of the right kind of patients. And by asking for those referrals actively and starting to decline on the number of entitlement-minded patients that we want to receive where we have to take a fee knockdown. So, you could definitely segregate. And then, your movement from involvement, entitlement participation to nonpar, full-service, full fee, however gradual. It’s just going to be based on that mix of patients. And that’s going to be easier for a practice that’s 70%, 75%, 80% full-fee patients today moving to more freedom than it would be one that’s 75% insurance-driven today. That’s a longer path. But it’s still the same transition. In this case, without having to write a letter, without having to have those kinds of conversation, you just slowly wean those participating patients out. And I’ll see practices that say, ‘You don’t understand, Mark. In my area, everybody has this kind of insurance. Nobody is willing to pay that. And I’ll say, ‘Really? Nobody is willing to pay that?’ They go, ‘Yeah,’ I go, ‘Let me ask you something. Do you live within 25 miles of where you can buy a really nice car, like a Cadillac, a Lexus, a bimmer, or something like that?’ They go, ‘Yeah.’ ‘Are those dealerships closing?’ They go, ‘No.’ I go, ‘Well, then I don’t believe you. I believe the demographics of your geography dictate that there’s enough discretionary income for people to make those kinds of decisions. Oh, by the way, they might not be your patients today. But there’s enough of them in your geography that if you, in five years, morph that patient population like you’re talking about, to morph those discretionary dollar spenders, you could be in nirvana instead of insurance-dependency. That’s just a choice you either make consciously or non-consciously when you say, ‘I can’t.’ No. What you really meant was, ‘I don’t understand, and I won’t.’ Great. Let me help you understand so maybe you’ll decide you want to.’ That’s a different discussion.” (54:17—56:36)

“Step number five is having that communication with each and every patient over the next six months. So, when you write that letter, the letter is really just a mark in time more than anything else, drawing the line in the same. You can almost do it without the letter. I have no problem with that. If you said, ‘I don’t want to write the letter. I just want to have those conversations,’ I’d go, ‘That’s what you should do.’” (56:47—57:08)

“We’ve coached most of our clients who do something like this to write a letter. But then we also coached them to identify those people in the huddle every morning and for the next six month have the one-one-one conversation about the letter, about going nonpar, about what that means. (57:09—

“What’s hard is the patient who calls, heard great things about your office, but isn’t sure that they’re willing to pay that difference. And so, when they would call and say, ‘Hey, listen. I was calling. I’ve heard about your office from Kirk Behrendt. Great guy. Said a lot of good things about you. But he also said that you’re a different kind of office and you don’t take the insurances. So, I just wondered, do you take mine?’ And we’d say, ‘Well, actually,’ we’d be very careful, ‘we don’t participate with the fee schedule that your insurance tendered for us. In fact, what we have found is our patients have come to expect a certain level of skill, care, and judgment that we can’t do for those discounted fees. And so, what it means is you’ll probably have to pay a little bit more to come to see us.’ For most people, that was good. There would still be some people that would hesitate. So, first off, some people just came in, then the next group had a conversation, a question. We’d assure them that we’ll still fill out the paperwork. We’ll do all that work for you. There would be a little higher fee for you, but give us a try. And they would be okay with that. Then, there’s the third group who’d hesitate again. And we’d say, ‘Listen, let’s do this.’ Those are magic words. I’ve heard you say that a hundred times. Let’s do this. Those are Kirk’s magic words. It implies we’ve agreed to something. It implies we’re moving to a better behavior together. Let’s do this. Why don’t you go ahead and come in, see Dr. Murphy for this incredible new patient exam.  (59:41—

“The first time I had this conversation — first off, I’m going to rehearse it several times with my team. I’m going to practice it. And then, the first time I have this conversation, I may walk away, I’m going to grade myself and I might get a C- or a D and I may fumble. And that feels bad, so I probably don’t want to ever have that conversation again because I don’t like to feel bad. That’s our reptilian instincts, our protective instinctual reflexes. But if I go out there and have the second conversation, then the third, then the fourth, then the fifth, here’s what I can promise anyone listening to this podcast: it will get better. Your conversation will get better. And if you’re actually so horrible at this that they never get better, have someone else one your team do it. That’s okay too.” (1:03:30—1:04:06)

“I’ve had some bad conversations too. That’s how we learn. Guess what? If you make mistakes and you correct them, you learn.” You make mistakes over and over again, that’s not experience. If you never make those mistakes and you do something right the first time, accidentally, you ought to go break it anyhow, just so you can figure out how to fix it. You have to repeat these things. You have to do them over and over again, and you’ll get better, for you and for your team.” (1:04:43—1:05:04)

“If you’re open to the people around you and you’re willing to suspend the biases, and the noise, and judgments that we have about things, the paradigms we live in, if you’re willing to suspend those in here, some of these other concepts and ideas, without putting your dukes up to fight and defend what you previously thought, and you said it well, it’s getting rid of the old ideas that is so hard, not accepting the new ones. But if you can suspend that for a while, you’ll be open to hearing new things, and you might find a way to chase that dream that I said you’re free to choose. Not tomorrow, over time.” (1:05:47—1:06:19)


0:00 Introduction.

3:52 What Dr. Murphy knows for sure about dentistry.

7:05 You can do it anywhere.

10:05 Don’t jump out of the pot and into the fire.

12:37 Step 1) Do the math.

15:55 Important metrics to look at.

19:45 Step 2) Identify a value proposition.

25:47 Step 3) Share your value proposition with patients.

31:09 The Premier nightmare.

34:57 The worst thing Dr. Murphy has done as a dentist.

36:34 Insurance independence is behavioral.

38:17 Step 4) Write the insurance letter.

42:17 Have a strategy in place.

45:35 Nonpar, defined.

48:53 Some fees are negotiable.

50:57 Figure out how you want to practice.

53:43 How to slow down your participation.

56:38 Step 5) Communicate with each patient.

58:49 Create the patient base that you want.

1:02:23 Rehearse conversations with your team.

1:05:09 Last thoughts on insurance independence.

1:07:46 How to get in touch with Dr. Murphy.

Dr. Mark Murphy Bio: 

Dr. Mark Murphy is an American Board of Dental Sleep Medicine Diplomate and has practiced in the Rochester area for over 35 years. He is the Lead Faculty for Clinical Education at ProSomnus Sleep Technologies, Principal of Funktional Sleep, serves on the Guest Faculty at the University of Detroit Mercy School of Dentistry, and is a Regular Presenter at The Pankey Institute. He has served on the Boards of Directors of The Pankey Institute, National Association of Dental Laboratories, the IdentAlloy Council, The Foundation for Dental Laboratory Technology, St. Vincent DePaul’s Dental Center, and The Dental Advisor. He lectures internationally on Leadership, Dental Sleep Medicine, TMD, Treatment Planning, and Occlusion. 

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