1

PPO Practice Case Studies:

The practice followed the traditional approach to participation by signing direct contracts with insurance companies. This strategy allows the practice to acquire new patients as an “in-network” provider and grow the business. Over time, directly contracted providers find that they are required to give discounts more than 40%, just for the privilege of being listed in the directory. These discounts eat into profitability and threaten the financial sustainability of the practice.

Solo practice located in Big Springs, AL with annual billings of $1,000,000.

Attributes

Before

After

Contracts

Direct with all insurance companies

Enrolled in Dental Advocacy Group

Discount from practice fees

42%

33%

Dollars lost due to discounts

$420,000

$330,000

Increased revenue from better fee schedules

$90,000

Results

Practice increased annual revenue by $90,000 by joining Dental Advocacy Group.

Solo pediatric practice located in Columbus, GA.

Attributes

Before

After

Contracts

Direct with all insurance companies

Enrolled in Dental Advocacy Group

Discount from practice fees

31%

13%

Dollars lost due to discounts

$349,000

$146,000

Increased revenue from better fee schedules

$203,000

Results

Practice increased annual revenue by $203,000 by joining Dental Advocacy Group.

Multi-provider practice located in Savannah, GA with annual billings of $7,200,000.

Attributes

Before

After

Contracts

Direct with all insurance companies

Enrolled in Dental Advocacy Group

Discount from practice fees

46%

32%

Dollars lost due to discounts

$3,312,000

$2,304,000

Increased revenue from better fee schedules

$1,008,000

Results

Practice increased annual revenue by $1,008,000 by joining Dental Advocacy Group.

2

Start-up Practice Case Studies:

Start-up practices are exciting to plan and build, but you need to acquire some patients….and fast! Often start-up practices participate in a variety of dental insurance plans to make themselves generally available to the market.

Multi provider start-up located outside Atlanta, GA with annual billings of $1,070,000

Attributes

Doors Open

1 Year In

Contract Strategy

Enrolled in Dental Advocacy Group

Enrolled in Dental Advocacy Group

Days open/week

Fri and Sat

5 days/week

Days per Dentist

1

4

Dollars Billed

$0

$1,070,000

Results

Both dentists worked one day per week at their new location, and 4 days a week as an associate elsewhere. Within 6 months, both dentists were working full time at their own location. Within the first year of operation, they had billed out more than $1M.

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3

Adding an Associate Case Studies:

Growing practices often find the need to hire Associates. Private practices must compete with DSO’s and other private practices to recruit and retain Associates. Associates are typically paid based upon a percentage of the collected revenue for their work. Opportunities to attract Associates are often dependent on projected income.

Multi-provider practice located in Augusta, GA with annual billings of $3,200,000

Attributes

Compensation

PPO Practice

Compensation

Dental Advocacy Group Practice

Associate Annual Billings

$750,000

$750,000

Collected Revenue

$405,000

$607,500

Associate Compensation is 35% of Collected Revenue

$141,750

$212,625

Practice Owner revenue

$263,250

$394,875

Results

Practice increased annual revenue by $394,875 by joining Dental Advocacy Group.

Multi-provider practice located in Savannah, GA with annual billings of $7,000,000.

Attributes

Compensation

PPO Practice

Compensation

Dental Advocacy Group Practice

Associate Annual Billings

$1,250,000

$1,250,000

Collected Revenue

$675,000

$850,000

Associate Compensation is 25% of Collected Revenue

$168,750

$212,500

Practice Owner revenue

$506,250

$637,500

Results

Practice increased annual revenue by $637,500 by joining Dental Advocacy Group

4

Acquisition Case Studies:

Acquiring dentist wanted to achieve higher revenue with similar production and working similar hours as the previous owner. She also wanted to invest in upgraded equipment and technology, all while paying off the purchase loan ahead of schedule.

Solo practice located in Columbia, SC with annual billings of $1,300,000

Attributes

Seller

Buyer

Contracts

Direct with all insurance companies

Enrolled in Dental Advocacy Group

Discount from Practice Fees

26%

19%

Dollars lost due to discounts

$333,000

$252,000

Increased revenue from better fee schedules

$81,000

Results

Buyer increased annual revenue by $81,000 by joining Dental Advocacy Group.

Solo practice located in Atlanta, GA with annual billings of $1,700,000

Attributes

Seller

Buyer

Contracts

Direct with all insurance companies

Enrolled in Dental Advocacy Group

Discount from Practice Fees

28%

11%

Dollars lost due to discounts

$482,000

$190,000

Increased revenue from better fee schedules

$292,000

Results

Buyer increased annual revenue by $292,000 by joining Dental Advocacy Group.

5

Fee for Service Case Studies:

Fee for Service is the goal for many practices. A fee for service practice holds no contracts with insurance companies and is designated as an “out of network” provider. This means the practice is not listed in any insurance directories. Fee for service practices acquire new patients through word-of-mouth patient referrals and marketing efforts directly to patients. Fee for service practices should remain so if they are able to acquire new patients at a comfortable pace. When that is not true, a fee for service practice may consider participation options.

Multi-provider practice located in Huntsville, AL with annual billings of $2,500,000

Attributes

Before

After

Contracts

Out of Network

Enrolled in Dental Advocacy Group

Discount from Practice Fees

0%

7%

Billed Charges to DAG payors

$320,000

$800,000

Increase in billings as a participating practice

$480,000

Results

Practice grew annual revenue by $480,000 by joining Dental Advocacy Group.

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