Embrace Progress: Millennials, Memberships and Monthly Payments by Dr. Daniel Grob

Orthotown Magazine

by Dr. Daniel Grob, DDS, MS, editorial director, Orthotown Magazine


If you’re like many American families—especially millennials—monthly subscriptions are a regular part of your budget. Millennials are used to seeing services and even products presented to them in terms of monthly payments. My son has memberships in a monthly razor club and a wine delivery service. There are even a dozen subscription services available for socks, and it’s rare to go through a car wash without being offered a monthly membership fee good for unlimited washes. Another popular service popping up are tanning salons on college campuses, which allow students to stay bronze during the entire year.

Monthly payments have become a staple of the modern budget—so much so that several years ago, I became somewhat alarmed when told that having your FICO score at your fingertips was becoming a necessity. That’s right: Knowing your ability to make payments is almost as essential as your Social Security number or level of education. And of course, the service that provides your FICO score ... is charging a monthly fee to keep you up to date!

Recognize the trend before it ends

We don’t need to just be subscribers to monthly-fee models; we should also provide them. Yes, cost still plays a part in what we as consumers purchase, but the way they purchase goods is certainly different. The monthly-payment phenomenon affects the way we present treatment plans, render care, and even maintain or recall visits. Cosmetic dentists present a treatment plan, render the care over a period of weeks or months, and get paid. Many utilize a third-party billing company to allow patients to pay over time.

One only needs to have attended this year’s AAO annual meeting to realize how many services are bundled or added onto your existing software services—data storage, SEO?maximization, IT services, and other marketing initiatives—for an additional monthly fee. If one isn’t careful, many of the things that we take for granted or would like to add to our business will also add outrageous monthly fees.

Microsoft stock is now the most valuable on the planet. Stock analysts attribute the recent pop in the business valuation to its decision to embrace subscription services (via the cloud) for their software products, instead of one-time purchases. Adobe is in the same valuation and business category.

Gym memberships are in their own special category: Sell as many memberships as possible, hope no one shows up (just count the lockers!) and keep the rest. Does this sound like an HMO, anyone? So, we in the business of providing a service over a number of months are in the driver’s seat, right? Well, yes and no.

Make the most of every month

True, our services are delivered over several months, sometimes even years. However, treatment times and frequency of visits are decreasing. These two factors make it difficult to raise fees without adding additional services.

There once was an orthodontist I knew who valued starts as his profit for the month. Monthly payments, he said, only covered the overhead. I’m not sure that’s the way to think these days. You can, however, thank orthodontists for starting the direct reimbursement system. This shows that as a group, we are used to fending for ourselves when it comes to making our services affordable. Going forward, what are some of the ways that we can compete with the monthly billing systems and recurring payment options that have become standard fare in our patients’ lives?

Office location selection is important. I know that in the greater Phoenix area, there are some neighborhoods where patients have similar incomes and insurance benefits yet due to “preferable” ZIP codes, house payments fluctuate a hundred bucks or more. This is easily the monthly payment for orthodontic care! Locating in these “preferable” ZIP codes may not be the smart choice.

Payment slider apps and software to help patients decide on treatment have been useful. This feature, which is offered by third parties and may be bundled within practice management software, makes it easy to convey to patients the relative affordability of treatment.

For at least 20 years, my practice has offered plans of 24–36 equal payments, depending on the care rendered, age of the patient and expected time of appliance removal. Without having to pull credit checks, and occasionally finishing treatment ahead of schedule, we have had minimal problems with this arrangement. Once a practice is established, it’s all about the monthly income minus expenses. Some advocate for extending payment beyond 36 months. Problem is, a healthy orthodontic practice depends on the next patient starting care. If the first one is still being paid off, when do you get Patient No. 2? Breaking treatment into phases is a healthy way to manage payment options also.

Lastly, I recently took part in a webinar discussing in-office dental plans for uninsured patients. I’ve had several dentists in my area start these plans and I’ve been included on them. Orthodontists need to stay in the game and understand the market because for the time being, the market is full of monthly subscriptions, and consumers (and patients!) are willing to sign up for them.

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