I have written a number of times about the “evils” of participation with a PPO, and especially the Delta Dental PPO.  I have written about it often enough that some of you are certainly tired of hearing about it from me.  I have heard countless times from doctors who said they are not on a PPO but that they are a Premier Delta participant.

Again, read your contract!  Delta Premier is a PPO with absolute control over what you charge!  The fact that Delta may not be limiting the fees in your particular state at this particular time simply means that you are lucky, but your luck is about to change because Premier is being phased out of the Delta system.

Delta of California has just announced that they will sign up no new Premier doctors.  They have issued a new Delta contract that requires that all new participants with Delta agree to see not just the Premier patients but also all patients on any Delta PPO plan.

This instantly gives Delta tremendous sales and pricing power because the vast majority of California doctors are on the Delta Premier program.  Effective immediately, no California doctor on Delta Premier can hire a young associate (to allow the senior doctor to work less, perhaps to become a partner or to eventually purchase the practice), unless he is willing to have that new associate only see patients who are not on the Delta program.  If the associate signs a Delta contract, then even though he is an employee doctor he, which means your practice, must accept all Delta PPO patients, often with $1000 and greater fee discounts.  Also, no California Premier doctor can open a new location for a satellite office, or purchase another practice as a satellite, without signing the new Delta contract that mandates acceptance of all Delta PPO’s.

Not concerned about this issue because you are not practicing in California?  Then you have your head in the sand!!  No matter the state in which you practice, if you are a Delta Premier provider it will not be long before you get the same letter the California doctors have just received.

On a different but closely related issue, I wrote in my January 3, 2014 newsletter that I believed that because of the Affordable Care Act the number of people with orthodontic insurance would soon go into a decline and that decline would be roughly 50% within five years.  It has only been a little more than five months since then and many practices have already started to see a decline in the percentage of new patients with orthodontic insurance.  If you consider that some people who no longer have orthodontic insurance will not even make a new patient call, this issue is of even greater significance.

As employers face increased premiums for medical insurance for their employees, the cost of the dental (which include ortho) plans, plans that have never been viewed as being cost effective, is increasingly seen as being prohibitive.  Employers are dropping dental coverage in order to pay the increased cost of medical coverage.  Some employers are dropping traditional dental insurance in favor of less expensive PPO plans, such as Delta’s, so over the short term (one to three years) it is possible that PPO plans (especially Delta) will see an increase in enrollment.  That may sound like a bonanza for some who participate with the PPO’s but if it is a bonanza it’s going to be very short lived.

Orthodontists, and all dentists, who want to remain fee for service and want to have the ability to charge what they are worth, are going to have to learn to do a far better job of marketing – not advertising! – to the fee for service, uninsured, population.  That’s something we have taught since I started this business in 1980.

So visualize your practice a few years down the road when less than 20% of your patients have orthodontic insurance.  Do your current marketing policies focus on the type of patients that will help to build your practice, or do they just attract bodies?  Do your financial policies ensure outstanding case acceptance with patients of maturity, stability, and integrity, who make up the clear majority of our population?  If they do, and if you keep the number of delinquent accounts (not dollars!) at no more than 3% of total accounts, then you will have a healthy percentage of new patients being referred by existing patients.  That is the base you need to launch the type of marketing that will counteract the coming decline in insured patients, to remain free of the PPO trap, and to not need to worry about the increasing competition from corporate orthodontics.  I’ll write more about corporate orthodontics in the near future!