With inflation soaring, payroll percentages creeping up, and supply costs on the rise, we’ve all felt the pinch. But while our expenses have climbed, PPO reimbursement rates have remained stubbornly flat. This growing gap is squeezing the profitability and the joy out of private practice, forcing a difficult question: Is it time to drop PPOs?
This decision is scary. We’re afraid of losing patients and ending up with empty chairs. But what if staying in-network with low-paying plans is actually the riskier move for the long-term health of your practice?
This is not about fear or emotion. This is a data-driven guide to help you run the real numbers, understand the actual risks, and make the smartest possible decision for your practice’s future.
How Profit Really Works (and Why “Busy” Doesn’t Mean Profitable)
First, we need to stop thinking about just keeping chairs full. We need to think about profit per hour.
Every practice has a break-even number—the amount you need to produce each hour just to cover your bills. Let’s say your overhead dictates you need to produce $400/hour to break even.
- A PPO patient whose plan only allows for $400/hour of production means you are working all day for zero profit.
- An out-of-network patient who allows you to produce
600/hour∗∗inthatsamechairmeansyouaremaking∗∗600/hour∗∗inthatsamechairmeansyouaremaking∗∗200 in profit.
Covering your bills is better than an empty chair, but working for free isn’t a sustainable business model. The danger of low-fee PPOs is that they keep you busy while preventing you from being profitable.
The #1 Fear: “Will All My Patients Leave?”
This is the biggest fear that keeps dentists trapped in bad contracts. But what do the numbers actually say?
Fear is emotional; data is rational. The data suggests that with a smart strategy, your losses will be far less than you imagine. Studies and industry reports show:
- An average of 60-80% of patients typically stay with their dentist after the practice goes out-of-network, assuming clear communication.
- With a dedicated retention strategy (like offering membership plans and filing claims as a courtesy), patient attrition can be minimized to as low as 2-5%.
- A recent survey found that 43% of patients would choose an out-of-network provider based on favorable online reviews alone, proving your reputation is more powerful than an insurance card.
The key takeaway is that most patients’ loyalty is to you and your team, not their insurance company.
Watch the full, in-depth guide on making this critical decision.
Your Playbook: A Step-by-Step Retention Strategy
To keep patient loss to a minimum, you must have a plan. Do not just send a letter and hope for the best.
- Train Your Entire Team: Everyone must be on the same page with a consistent, confident, and positive message. Role-play the common questions.
- Communicate Early and Often: Give patients at least 90 days’ notice through letters, emails, and, most importantly, personal chairside conversations.
- Emphasize What’s NOT Changing: Frame the conversation around your commitment to providing excellent care. Reassure them that you will continue to submit claims on their behalf as a courtesy.
- Offer an In-House Membership Plan: This is a critical tool to provide an alternative for patients who value a predictable payment structure.
- Strengthen Your Brand: Double down on what makes your practice great—your team, your technology, and your patient experience. Now is the time to ramp up your Google reviews.
The Math: How to Know When It’s Safe to Drop a Plan
Confidence comes from knowing your numbers. This simple framework will help you calculate the real financial impact.
- Calculate Average Monthly Production: Run a report to find your average monthly production from the specific insurance plan you’re considering dropping.
- Determine Your Discount Percentage: Compare the plan’s top 10 procedure fees to your standard fees to find the average percentage “discount” you are giving.
- Project Your Out-of-Network Potential: Take your average monthly production from that plan and calculate what it would have been at your standard fees.
- Apply an Attrition Rate: Now, reduce that projected number by a conservative patient loss estimate (e.g., 40%).
- Compare and Decide: Is the final number (your projected out-of-network production after losing 40% of patients) higher than or roughly equal to what you are currently collecting from that plan? If yes, it is likely safe to drop.
Pro Tip: Start with your smallest, lowest-impact insurance plan first. This allows you to go through the motions and train your team on the process with minimal risk. By the time you’re ready to drop a larger carrier, your team will be experts at handling the transition.
The Phased Exit: A Smart Roadmap Out of PPOs
This isn’t an all-or-nothing leap. For most practices, it’s a controlled, multi-year transition.
- Phase 1: Start by accepting many PPOs to fill your chairs and build a patient base.
- Phase 2: Once you are consistently busy, begin dropping your absolute worst-paying plans.
- Phase 3: Aggressively renegotiate fees with your remaining PPO contracts.
- Phase 4: Consider joining higher-paying “umbrella” networks to replace some direct contracts.
- Phase 5: As your reputation and new patient flow become strong and independent of insurance, begin phasing out of the remaining networks.
This strategic, phased approach allows you to regain control of your practice and your future without taking on unnecessary risk.
