By Bill Rossi

Sometimes dentists will be at a crossroads where they are at capacity. They are as busy or busier than they want to be. Their schedule is jammed up. It can be hard to fit in new patients. Hygiene help is hard to come by. And so on.

At the same time, the doctor may be writing off 25%-45% of his/her office production each month. When one is maxed out, even more than maxed out, it doesn’t make sense to see every third patient for free in order to keep the chairs filled!

So, one way to handle the situation is to hire an associate. There are a lot of good reasons to add associates besides profitability; coverage, professional companionship, eventual practice transition, the ability to broaden the spectrum of services delivered and so on. But for the purposes of this article, let’s assume that the only criteria is profitability. Which path earns the doctor more money?

Drop Delta

For this example, let’s assume that the doctor is producing $100,000/month, writing off $20,000/month for Delta Dental. Delta is about 50% of the practice. With a perfect transition, the doctor will be adding $20,000/month to their income, however, no PPO/Delta transition is perfect! I think a safe assumption is, if handled correctly, the doctor will lose 30% or less of their Delta patients. You are still welcoming new patients to the practice, and you are at capacity, you will fill back in with other patients, even other Delta patients. (Going out of network with Delta doesn’t mean you don’t get new Delta patients!) 30% less Delta patients in the practice means 15% less patients overall. If you have a healthy practice that is at capacity, you will fill back in most of that 15%. So, we assume that if you (net) lose 20% of your Delta patients, you will produce $90,000/month and collections will be up $10,000/month.

Hire Associate

If you hire an associate, let’s assume that the associate, with proper delegation and training, can also be producing at least $40,000/month and you would collect 80% on that (because you are still with Delta). I think that it is safe to assume that you can net at least 20% on associate collections given a normal overhead profile (we also assume no significant additional equipment or facility expenses). So, your net is increased by $6,400/month.

In conclusion, if you have enough patients to successfully bring on an associate, you have enough patients to weather a Delta transition. If you have $40,000 worth of treatment to keep an associate busy, you have $10,000’s of potential demand to replace lost Delta patients. If there is no other reason that you would add an associate besides “profitability” you are better off transitioning Delta.

However, dropping Delta and adding an associate aren’t necessarily mutually exclusive. More broadly speaking, if you are adding or dropping other PPOs that are a smaller part of the practice, it does not mean that you can’t add an associate.

So, as a pure profitability play, drop Delta but make sure it’s a well-planned drop. You can’t just leave Delta. You have to be working toward something. You have to beef up your marketing muscle, website, Google Reviews, case acceptance, all of that, to counteract not being in the Delta network. You can afford to invest in fortifying the practice with your own means. It can be very satisfying.