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Professional News Articles : : ON PRACTICE MANAGEMENT by Janyce Hamilton : Could “buffet pricing” one day work for dentistry?

Could “buffet pricing” one day work for dentistry?

August 23, 2007

Have you ever pulled into one of those car wash operations where after a mechanical scrubbing, a young guy towel dries your vehicle? Usually there's a tiered pricing structure: The Basic (no dry) $8, Basic Plus (foam wax plus dry) $10 or The Works (all of the above plus mats and undercarriage washed plus your choice of air freshener) $14. All individual services can be added to The Basic for $3 each, but by paying for The Works, you save $4. If you are like me, you don't get your car washed every week. But once in awhile even I can't look at it anymore. Then it's The Basic and I towel dry it myself. Attending a family reunion? Lots of cash on hand? Then it's The Works all the way, baby. You pull out of that car wash, and for that moment you think, “Maybe I'm not such a shlub... I'm driving this lemon-scented clean car.”

Well, this month, I looked in the mirror at my face and my Irish gene pool stared back at me. I realized I couldn't take it anymore. The ugly mug needed The Works. Not the telltale red nose (yet), but a little rosacea on the beak and cheeks. A sprinkling of sun freckles, a few errant bumps. I'm sliding into middle age, so I shouldn't grouse. Oh, there's good news: no more acne. Thank you, Buddha. And I think I have another 20 years before it's “face-lift” off time.

Most days, I don't remember to brush my hair. But we all have some vanity. Remembering the positive results of my one-time professional tooth bleaching (they were blindingly white), I wondered if it was time to visit a skin doctor. I had put off seeing a dermatologist because my past experiences with doctors are that they code each type of problem and bill separately per treatment, condition, etc. My insurance was always billed a few hundred dollars for almost any type of doctors' visit (orthopedic, internal medicine, etc). Dentists were always the most affordable doctors. Unfortunately, my basic medical insurance plan today doesn't cover cosmetics and as a parent who works part-time, I put frivolity last on the list of things to save up for.

Finally this month, however, I scraped together $100 and decided I could spend it on myself. When I was searching for a dermatologist, all those I called explained the first visit was between $150-300, and that was just for the consultation. How discouraged I felt!

I was about to give up, but my tiny milia and sebaceous bumps had really gotten to the point where I felt my face was an eyesore, no matter who told me they were barely noticeable. (Friends lie to us because they love us: “Don't be silly, your hairline is NOT receding, Tom” or “Jan, you look as though you have lost 5 pounds in that new outfit, not gained 5!” ) I placed my last chance phone call to a dermatology practice I found on the Internet, whose front desk manager, explained the fixed $130 fee would include simple cosmetic care at the first visit such as removing my milia and smoothing my bumps. Sounded almost too good to be true.

Soon, I found myself in a crowded waiting room. When my name was called, I met this dermatologist for the first time. Feeling sheepish, I wanted to be upfront about my finances: “I only brought $150 with me, but it's $130 right?”

No worries, everything today will be done for $130. And we can do better than removing one milia, the doctor said. With that, he proceeded to zap perhaps a dozen bumps on my face and also removed two tinier milia (still so small, I couldn't even see them). I wanted to cry when I shook his hand afterward. My skin looked normal again and was no longer ugly. His treatment felt like magic. How touching it was that he didn't sneak in extra charges or try any “soft sell” on product lines and future services. Too many times, the bill is higher than the estimate and the patient is expected to write out the check, put it on the credit card or agree to make a deposit and regular payments. Instead, it was a buffet of services received for one set price. The doctor explained that with my skin type, I'd probably have to stop in once a year for the same thing.

Simple, honest and straight-forward. How relaxing it is to know that I'll probably never spend more than $130 a year (even I can save $11 a month).

And, his patients aren't the only ones feeling good. The dermatologist I visited talked softly and slowly, and smiled a lot. He seemed like a happy guy. And why not? He makes people happier about how they look, and they lined up to see him as if it was a Dairy Queen on a 90-degree summer night.

What if this approach could work for dentists? It would be tricky, but could it work in the future if the profession was lobbying around it as a part of “insurance reform”? The dental patient would be treated to the peace of mind of a flat fee for, say, “all that can be done in a 30 minute appointment” or “60-minute appointment” etc., of a buffet of services.

Maybe this would not work today, but hear me out for how it could in a fictional world of the future.

Dentists charge separately for each and every service with their ADA codes for diagnosis. What would happen to their patients' psyches if this was changed to a one-price, comprehensive care structure? What if it was $150 for everything there's time to fit into, say, 45 minutes? (exam, cleaning, X-ray, whitening, fluoride treatment?). As is, patients often deny X-rays and say no to whitening and fluoride trays because they don't want to add $75 here, $100 there, and $25 on top of their $95 cleaning.

After my appointment with the dermatologist was over and we said our goodbyes, I wrote a thank-you on a scrap of paper at the front desk. It seemed more than fair and I felt deeply grateful.

When I got home, I kept thinking about the one fee and how relieved I felt. I decided to call and ask the dermatologist about this laid-back approach he took to billing for services. For example, how did he know that he would still make enough of a profit by focusing on not exploiting his patients' pocketbooks instead of just doing what everybody else does?

Because of legal issues, the dermatologist asked to remain anonymous in this column and suggested calling it “a fictional account.” I granted him this wish because what he shared about how he approaches billing of patients is worth hearing.

The interview

Janyce Hamilton (JH): Charging a flat fee of $130 per visit for your services seems so simple for patients to accept.

Dr. Dermatology: I only wish that the issues were so simple! The flat fee concept is one that brings into discussion the very heart and soul of what makes an advanced society thrive. Certainly small businesses have to operate in the black, but health care providers (MD or DDS) also have to decide whether they simply want to do no harm as is the tradition, or, if they want to do some good with the skills that they have gained through practice and disciplined study. And so does everybody else.

JH: Being principled sounds good in theory, but how is it playing out in reality?

Dr. Dermatology: Unfortunately in today's society, what has been deemed as doing harm has been defined and re-defined by over-zealous lawmakers, profiteering lawyers, redundant (and often silly) regulations, ill-informed insurance companies and corporate and labor union greed.

The result is that the experience and relationship that a patient develops with a physician resembles a confusing, intimidating and frustrating mess.

JH: This is why patients are so suspicious and guarded about fees, which puts doctors and their staffs on the defensive. It's awkward more often than it should be, all because of this blanket lack of trust between patients and doctors.

Dr. Dermatology: So, what you experienced visiting me is what I call common sense ethics. I had an opportunity to buck the system by ignoring it. It was easy! And I thank you, in turn, for allowing me the rare opportunity to do some good instead of just do no harm.

JH: What do you think dentists could learn from your approach?

Dr. Dermatology: I choose to offer one fee for my patients who are not billing charges to an insurance plan. They too have a choice: follow the rules and settle with doing no harm, or do the right thing but risk getting your hand slapped.

JH: How long have you been charging the one-fee for all services, and why are you confident that you will continue to earn enough income using this approach?

Dr. Dermatology: Soon after I began practicing I realized that some things made no sense. When a patient has insurance that covers surgeries and treatments that have health benefits, we code and bill per diagnosis and treatment. That is profitable. When they don't have insurance, we save on paperwork so I can afford to “discount” services by bundling them. This is profitable, too. This makes my insurance participation seem fraudulent when comparing the fees, but they are no higher than any other doctor in my region charges to insurance for these diagnoses and treatments. I am reasonable and customary. But I care about people, which is why I'm a doctor and I want to make myself available to patients who wouldn't otherwise afford me. That's honest.

JH: Dental patients, like dermatology patients, don't have cosmetic/esthetic services reimbursed by their dental insurance plan, if they even have a dental plan. So professional tooth whitening, veneers, white restorations, orthodontics, are usually all wants not needs. How do you talk to your patients so that they don't feel silly spending money on services for their appearance, when, say, their spouse couldn't care less (wouldn't notice)?

Dr. Dermatology: I tell them they are worth it, and to set an example to others they care about. They live with themselves 24/7, and need to be their own best friend before being someone's spouse, child or parent. Removing a wart or a mole once every year or two is reasonable self-care; it isn't acting like Paris Hilton.

JH: When patients are checking out at the front desk and they are asked to pay the fee they were quoted over the phone, or less, does it feel to them that you—the doctor—has “kept your word” to them?

Dr. Dermatology: Yes. They are relieved because they didn't trust me until they saw the fee didn't creep upward like it does when you add a slice of cheese or avocado to a $5 turkey sandwich at the Jimmy John's, which then rings up $8.

JH: But what if you run into problems (cosmetic not medical issue) during the $130 visit? Do you say “Next time you should think about... .” at the end of the visit? Or, do you instead ask if you can do more today, even though it will cost more? This is the dilemma dentists run into every day--should they do all the treatment they can now or not. On one hand, the patient may have dental problems sooner (plus they may never return so make money now). But on the other hand, if patients are walking out paying significantly more than what they had planned on spending when they walked in, will they feel financially exploited?

Dr. Dermatology: If it can wait (not a cancer risk), I don't mention other things I see. I know it'll just stress them out to hear “news” about “more problems” they didn't even know they had.

JH: Any last words of advice for dentists about balancing profits versus ethics?

Dr. Dermatology: Generally, federal law prohibits doctors from charging a flat fee to patients for medical services as long as the given doctor is a member of Medicare and/or is on contract with an insurance plan. The law considers the patient encounter as analogous to a deposition in the court of law, and each and every action (or non-action) has to be individually documented and charged for by the physician or else the given action (or non-action) did not take place. The law applies even to patients who do not have insurance and pay for their services with cash or credit card. Essentially, the law states that if a physician charges any given patient a fee that is lower than the given Medicare or insurance payment for the same service, then that physician is in breach of contract, and, when it applies to Medicare (which most physicians are participating providers) such a breach is considered insurance fraud.

I actually have met a physician who served jail time because he gave discounts and/or did not document his charges properly!

So what do most doctors do to ensure that they absolutely do not undercut any of the insurance plans that they have contracts with? They charge triple to quadruple the price knowing that insurance actually will pay only a small portion of that charge.

There is actually a special form that you can fill out that allows the doctor to check insurance first before he/she charges a mutually agreed upon fee, should you seek a service that may be considered outside medical necessity. Big brother, big time.

Nobody has the staff to file all of the forms. So I am going to have to take the sides of the doctors, including dentists, this time. They are not over-charging or being petty with their time and efforts. The charge has been determined by the government and the insurance companies. The doctors are likely not trying to stick it to the patient, and it is likely that they are not purposefully being allusive or confusing. They are just as confused and intimidated as you are, just trying to do no harm and work within the system.

It is all the lawyers' fault. They have sued every player in this game from the doctors to the hospital to the parking attendant. They get away with it because they can, and because they get paid whether they win or lose. I wish writers like you would write about this issue. Michael Moore intended to do so initially in his recent documentary on healthcare, Sicko, but he got caught up in the fashion-statement of Bush-bashing and the pseudo-popularity he has enjoyed from such. Doctors like me just live with just our good intentions, and keep it quiet.

Conclusion

Perhaps a one-fee pricing structure won't work for dental patients, considering some have insurance plans that require a breakdown for billing, and no one wants to be charged with insurance fraud. But, could some variation on this idea work in certain practices or for some patients if leaders in the profession put their heads together and lobby for change? Regardless of the feasibility of this approach in dentistry today, maybe take some time to think about what it is concerning payment that makes your dental patient nervous. What is it that makes you, a doctor, trusted like a good friend, versus one perceived as “just one of those dentists out for all they can get”?

Janyce Hamilton is a Chicagoland freelance dental writer and editor. Send suggestions for topics to be covered, or any comments on this column, to review@cds.org.

Copyright 2007, Chicago Dental Society