We all know about the drug addiction epidemic in the US—40.3 million people grappled with substance use disorders (SUDs) in 2020, but shockingly, only 6.5% got the help they needed.1 This isn’t just a problem for the individuals; it tears apart families and communities too.
Surprisingly, the dental industry faces a similar crisis with preferred provider organizations (PPOs). Much like an addiction, PPO dependence drains the lifeblood from dental practices, leaving them struggling to stay profitable, manage cash flow, and keep patients happy.
My battle with PPOs began while managing my dad’s dental lab. We constantly faced demands from practices saying, “This patient is on a really bad PPO plan. We can’t profit from the treatment unless you offer a discount.” It was maddening to see how PPOs dictated what treatments could be covered and at what cost. This endless cycle of frustration reminded me of how an addict’s poor choices affect their family and friends, causing widespread resentment. Dental insurance companies have turned the industry into PPO addicts.
The PPO epidemic: A scary scene
The current landscape of PPOs in the dental industry is dire. In 2023, 34% of dentists in the US reported a drop in their PPO reimbursement rates, many by 10% or more. PPOs force practices to offer deeper discounts and use AI algorithms to cut claim payouts, pushing practices further into financial ruin (figure 1). This is reminiscent of how addicts need more of a substance over time to achieve the same effect, draining their resources.
Legal battles against insurance companies for using AI to deny claims are surfacing,3 much like the legal troubles addicts often face. The costs of managing PPO patients have soared due to high denial rates and reduced reimbursements, piling financial strain onto practices. Many are spending more just to keep up with their PPO habit, often without realizing the full financial impact. Many dentists don’t realize the true cost of PPOs; the financial implications are staggering.
Drawbacks of PPO dependency
The four major drawbacks tied to PPOs are:
- PPOs burn out your staff.
- PPOs kill your profit margins.
- PPOs hurt your cash flow.
- PPOs jeopardize your patient experience.
Patients expect practices to understand their PPO plans, and when issues arise, it’s the staff, not the PPO, that gets blamed. This is akin to families of addicts facing the consequences and often the blame for their loved one’s addiction. This certainly doesn’t help with the increasing staffing issues many practices face. Think about your staff acting as customer service reps for an insurance company. They didn’t sign up for that, and you’re not paying them for that.
The benefits of saying no to PPOs
Cutting ties with PPOs brings immediate benefits, such as increased profit margins, higher average revenue per patient, and improved cash flow. When you drop PPOs, it’s like flipping a switch that instantly boosts your revenue per patient. These financial improvements are similar to the positive changes seen when individuals overcome addiction—better health, improved relationships, and greater financial stability.
Beyond the financial perks, the peace of mind from focusing on patient care rather than PPO constraints is invaluable. It significantly boosts office culture and team morale, as managing PPOs can be a major burden for staff. This mirrors the enhanced quality of life and mental well-being that individuals experience when they overcome addiction.
