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636 S Roselle Rd Schaumburg, IL 60193 847-895-8444

You Get What You Pay For by Dr. Ron Baran - Famous Schaumburgian Misanthrope "What do you know about dental PPOs and HMOs, doc?", said Dave P. as I walked into the room to give him his post-cleaning check-up. "The corporate Human Relations VP dropped this one in my lap and I have all of these Insurance Company and Managed Care salespeople scampering all over the place. They’re talking in some kind of gobbledygook language. It all seems like the company is going to save money if we get an HMO or PPO. But one thing that I noticed is that you’re not on any of the lists How come? I thought that you were a cutting edge guy. Isn’t this the wave of the future? "It just so happens that I received a proposal from one of the companies you were talking about", I said as I pulled a PPO proposal down off the shelf and proceeded to deliver a short-form lecture in Dental Economics 101. "In order to be a member of this little club I would have to discount my fees. OK. No big deal so far. First of all, I have to provide all the cleanings, examinations and x-rays at no charge. Then I have to discount the remaining fees by anywhere from 20% to 40% , depending upon the procedure.""That seems a little steep, doc. How do the numbers work out for that?""Well, according to recent articles in the ADA Journal and Dental Economics the average dentist has an overhead in the 70% range. And the preventive procedures like cleanings, x-rays and examinations account for around 30% of the median office gross. Getting the picture?""Looks like there isn’t much of a picture," he said, as he snapped his trusty Texas Instrument calculator into service. "For every $1000 worth of dentistry you do, you loose $140. You’d have to be cerebrally challenged to participate in one of those plans.""Precisely," I said, working my face up into one of my most enigmatic expressions. "You loose a little on each procedure, but you make up for it in volume." (Sometimes I just can’t help myself.)"Yeah, volume. You’d never even get to break-even. What the heck would motivate someone to join one of those things?""Good marketing programs, the personality of a troll or the business acumen of a fifth grader. These companies send out really expensive shiny four color mailers telling the dentist how he can fill up all the empty spaces in his appointment book and make a ton of money. NEW PATIENTS. The Holy Grail of the dental profession. Doesn’t matter what the bottom line looks like, but if you have enough NEW PATIENTS, everything will be fine. But finally the contract runs its course and one of three things happen. First of all, the journeyman dentist, who found out that the plan didn’t work as advertised and who was getting beat up financially, drops the plan like a hot potato. The trolls are loosing money hand over fist but they don’t care because this is the first time in their lives that there are actually warm bodies in their offices. They’ve been losing money all along, all their patients still hate them, but now, at least, they feel good about themselves because people are actually calling them on the phone. Self esteem is soooo important. And then there is the nefarious band of ethically creative dentists who have discovered that, if you cut enough corners, hire your employees away from Mickey D’s, and use budget basement materials you can make it work. In my consulting career I’ve run across a few of these guys. They diagnose your treatment according to the plan you have. If there is a better return for doing a filling instead of a crown- you get a filling. If your nerve is dying and starts hurting they tell you not to worry about it, it’ll go away. It doesn’t matter what you need; you get what the plan pays the most for."The other thing that these dental mills have in common is a very large waiting room crammed with really angry looking people. So you asked who’s on these dentist list? Basically there are a few quality dentists who are experimenting with the program because of the heavy marketing. They’ll be gone in a few months. There are trolls. There are scoundrels. Any questions?""Well, that’s pretty interesting. But I noticed that the premiums aren’t that much lower than the traditional indemnity insurance. The salespeople all said that the employer made out better, the employee made out better, the dentists make out better and the insurance company made a fair profit. Kind of a win/win/win/win proposition." "Actually, I would say it’s more of a win - lose - lose - win situation. When I was doing my MBA (I take every opportunity to mention `that`) a marketing professor started his first class by writing the following on the black board : quality product excellent service cheap price "And then he said 'Pick two, because you can’t have all three’" "We spent the next two hours batting that one around, only to come to the conclusion that he was right.""So what do you think is going to happen?""I don’t really know. A lot of dentists have gotten burned. They feel that they can’t provide the quality dentistry and personalized service their patients deserve under a system like this. They didn’t spend all that time in school and work all those years on perfecting their techniques in order to start doing shabby dentistry. But there is a big shakout occurring in the industry. The inferior programs are just crumbling under their own weight and they will be replaced, I hope, with offerings that will provide people a fair return on their dollar invested. Even though these premiums are negotiated and paid for by the employer, the money ultimately comes from the employee’s pocket as part of the compensation package. It doesn’t take John Q. Public very long to recognize a hustle when he sees one. And many of these PPO and HMO programs are truly hustles.""Have you had many of your patients go off to the other programs?""Not very many, but we’ve learned not to put their charts in storage because inevitably they come back. And when they do I get comments like ‘ I couldn’t wait to get out of there’ or ‘Good gosh, where did they find that guy’ or, ‘I had to cool my jets so long in the waiting room that I just left,’ or ‘They took the concept of rude to new heights’. And those were the complimentary ones. Most of the better plans have what they call a dual choice option so that if you decide to stay with your regular dentist they nick you for a few extra dollars. You can choose not to get thrown to the wolves if you don’t want to. So, my friend, that’s the story.""Good gosh, Doctor B., you certainly are eclectic, ingenious, cerebrally nimble, and erudite. I’m going to hop right out of this chair, get back to the office and tell the boss everything I learned today. I just don’t know how to thank you enough for keeping us from this momentous blunder." OK so he didn’t really say that, but it’s my web page and I can end this piece any way I want. The point is that you might have to make a decision one of these days. You have three options. You can only pick two. >	Does Chawin' Tobacco Increase Your RBIs ? For All Those Born Before 1945 Frequently Asked Questions About Health Care Deep Thoughts Oddities of Life You Get What You Pay For Some of Dr. B's Favorite Curmudgeon Quotes We're from Ameritech

You Get What You Pay For

by Dr. Ron Baran - Famous Schaumburgian Misanthrope

"What do you know about dental PPOs and HMOs, doc?", said Dave P. as I walked into the room to give him his post-cleaning check-up. "The corporate Human Relations VP dropped this one in my lap and I have all of these Insurance Company and Managed Care salespeople scampering all over the place. They’re talking in some kind of gobbledygook language. It all seems like the company is going to save money if we get an HMO or PPO. But one thing that I noticed is that you’re not on any of the lists How come? I thought that you were a cutting edge guy. Isn’t this the wave of the future?

"It just so happens that I received a proposal from one of the companies you were talking about", I said as I pulled a PPO proposal down off the shelf and proceeded to deliver a short-form lecture in Dental Economics 101. "In order to be a member of this little club I would have to discount my fees. OK. No big deal so far. First of all, I have to provide all the cleanings, examinations and x-rays at no charge. Then I have to discount the remaining fees by anywhere from 20% to 40% , depending upon the procedure.""That seems a little steep, doc. How do the numbers work out for that?""Well, according to recent articles in the ADA Journal and Dental Economics the average dentist has an overhead in the 70% range. And the preventive procedures like cleanings, x-rays and examinations account for around 30% of the median office gross. Getting the picture?""Looks like there isn’t much of a picture," he said, as he snapped his trusty Texas Instrument calculator into service. "For every $1000 worth of dentistry you do, you loose $140. You’d have to be cerebrally challenged to participate in one of those plans.""Precisely," I said, working my face up into one of my most enigmatic expressions. "You loose a little on each procedure, but you make up for it in volume." (Sometimes I just can’t help myself.)"Yeah, volume. You’d never even get to break-even. What the heck would motivate someone to join one of those things?""Good marketing programs, the personality of a troll or the business acumen of a fifth grader. These companies send out really expensive shiny four color mailers telling the dentist how he can fill up all the empty spaces in his appointment book and make a ton of money. NEW PATIENTS. The Holy Grail of the dental profession. Doesn’t matter what the bottom line looks like, but if you have enough NEW PATIENTS, everything will be fine. But finally the contract runs its course and one of three things happen. First of all, the journeyman dentist, who found out that the plan didn’t work as advertised and who was getting beat up financially, drops the plan like a hot potato. The trolls are loosing money hand over fist but they don’t care because this is the first time in their lives that there are actually warm bodies in their offices. They’ve been losing money all along, all their patients still hate them, but now, at least, they feel good about themselves because people are actually calling them on the phone. Self esteem is soooo important. And then there is the nefarious band of ethically creative dentists who have discovered that, if you cut enough corners, hire your employees away from Mickey D’s, and use budget basement materials you can make it work. In my consulting career I’ve run across a few of these guys. They diagnose your treatment according to the plan you have. If there is a better return for doing a filling instead of a crown- you get a filling. If your nerve is dying and starts hurting they tell you not to worry about it, it’ll go away. It doesn’t matter what you need; you get what the plan pays the most for."The other thing that these dental mills have in common is a very large waiting room crammed with really angry looking people. So you asked who’s on these dentist list? Basically there are a few quality dentists who are experimenting with the program because of the heavy marketing. They’ll be gone in a few months. There are trolls. There are scoundrels. Any questions?""Well, that’s pretty interesting. But I noticed that the premiums aren’t that much lower than the traditional indemnity insurance. The salespeople all said that the employer made out better, the employee made out better, the dentists make out better and the insurance company made a fair profit. Kind of a win/win/win/win proposition."

"Actually, I would say it’s more of a win - lose - lose - win situation. When I was doing my MBA (I take every opportunity to mention that) a marketing professor started his first class by writing the following on the black board :

quality product

excellent service

cheap price

"And then he said 'Pick two, because you can’t have all three’"

"We spent the next two hours batting that one around, only to come to the conclusion that he was right.""So what do you think is going to happen?""I don’t really know. A lot of dentists have gotten burned. They feel that they can’t provide the quality dentistry and personalized service their patients deserve under a system like this. They didn’t spend all that time in school and work all those years on perfecting their techniques in order to start doing shabby dentistry. But there is a big shakout occurring in the industry. The inferior programs are just crumbling under their own weight and they will be replaced, I hope, with offerings that will provide people a fair return on their dollar invested. Even though these premiums are negotiated and paid for by the employer, the money ultimately comes from the employee’s pocket as part of the compensation package. It doesn’t take John Q. Public very long to recognize a hustle when he sees one. And many of these PPO and HMO programs are truly hustles.""Have you had many of your patients go off to the other programs?""Not very many, but we’ve learned not to put their charts in storage because inevitably they come back. And when they do I get comments like ‘ I couldn’t wait to get out of there’ or ‘Good gosh, where did they find that guy’ or, ‘I had to cool my jets so long in the waiting room that I just left,’ or ‘They took the concept of rude to new heights’. And those were the complimentary ones. Most of the better plans have what they call a dual choice option so that if you decide to stay with your regular dentist they nick you for a few extra dollars. You can choose not to get thrown to the wolves if you don’t want to. So, my friend, that’s the story.""Good gosh, Doctor B., you certainly are eclectic, ingenious, cerebrally nimble, and erudite. I’m going to hop right out of this chair, get back to the office and tell the boss everything I learned today. I just don’t know how to thank you enough for keeping us from this momentous blunder."

OK so he didn’t really say that, but it’s my web page and I can end this piece any way I want. The point is that you might have to make a decision one of these days. You have three options. You can only pick two.