So You Think You Want a Fee-for-Service Practice?

Most dentists start their careers working for someone else. Today, many begin in the corporate world. Then comes the day when a dentist is given an opportunity to become a partner or develops a vision to purchase a practice or start one from scratch.

Many of these practices will have a contract with an insurance company or several companies to provide care at a fee dictated by the insurance company. It is a way to acquire patients. Dentists can work their entire career in this setting and be content and happy. 

Transitioning from an insurance-based practice to a fee-for-service practice has to occur on several levels. Obviously there needs to be a good level of clinical competence, but I believe the most important thing is the leader’s ability to create a clear vision and lead the team in a new direction.

Making the switch

When I realized it was time for my transition, 30 percent of our practice was insurance-based. My first challenge was to get the team to realize that accepting a reduced fee for our service from some of our patients was not a good thing.

My team stated that the patients are nice people and if we don’t accept their insurance, they will go elsewhere. I even heard through the grapevine that some staff felt I was being greedy by not wanting to accept a reduced fee.

This topic was brought up at a staff meeting. I suggested that if we all agree to continue to participate, we should choose one day of the week to be our insurance day. Heads nodded in agreement.

“Okay,” I said. “So if we all agree to work for the insurance company this day and accept 30 percent less of our normal fees, am I correct that you will also accept 30 percent less salary these days?“

The room got silent. There was no agreement and heads were not nodding. 

“We will also ask our lab to reduce their fees for these patients by 30 percent as well,” I continued. “Will our supplier give us a break? Will our landlord be on board as well?”

They got the picture.

Defining success

My next challenge was to define the level of customer service and care. We did that by having four staff meetings in restaurants with the following rule: whatever you order for lunch in the first restaurant (fish, chicken, beef etc.), you must order the same thing each time.

Our first restaurant was McDonald's. We discussed how were we greeted, what the menu felt and looked like, the seating, the decor, quality of food, utensils, salt and pepper, etc.

The second meeting was at T.G.I. Friday's. The third was a local upscale restaurant and the last was the Four Seasons....very upscale!

After each lunch, we compared the restaurant evaluation list to the one that we started at McDonalds.  The quality of food, service and ambiance were markedly different at each level. We talked about which restaurant we wanted to be and what changes we needed to make to accomplish this task.

Yes, it is true that you can eat calories and sustain life at Mickey D’s, but is that the quality of healthcare you want to be known to produce?

Your transition won't happen overnight. Your team has to share your vision and you have to lead the trail. 

Visit other fee-for-service offices. See how they work. Ask their story. See why patients gladly pay their fees.

Good luck on your journey!

Carl E. Steinberg, DDS, MAGD, LLSR

​(Read more dentistry articles by Carl Steinberg)