What You’ll Learn
- Why cash pay patients leave at nearly nine times the rate of insured patients
- The three things every practice needs before dropping a single insurance plan
- Why your hygiene department is your farm and what crops you should be planting
- How to get your team to actually sell the membership plan
- The difference between a discount plan and a membership plan
The Data That’s Not Super Fun To Talk About
Paul Lowry has spent years inside the financial plumbing of dental practices. He runs Dental Menu, one of the most operationally sophisticated membership plan platforms in the industry. And he has a number that should make every dentist uncomfortable.
“We did a big research study on 250,000 new patients,” Paul told Adrian Lefler on a recent episode of the Byte Sized Podcast. “We looked at their first visit date and then five years later, how active were these patients still. 12% of the cash pay patients were still active within a five-year period. Insurance patients, 64% were still active.”
That means 88% of cash pay patients disappeared within five years. Nearly nine out of ten walked out the back door while the practice kept spending money to bring new ones through the front.
The assumption most dentists make is that their cash pay patients are loyal. They pay full price, so they must love the practice. The data says otherwise.
“Your cash pay patients aren’t as consistent as you think,” Paul explained. “You have in your mind like, I see Adrian every six months. Well, when you dig into the data, you are losing them out the back door and they’re not coming in consistently.”
Why Membership Plans Get Misunderstood
The pitch sounds simple. Drop insurance, launch a membership plan, and watch profitability soar. Paul hears this constantly from practices ready to make the leap.
“If I can come in and get doctors worked up in a lather and get real emotional because insurance is terrible, insurance isn’t paying, fight back the insurance company, you should go out of network, a membership plan is going to solve everything,” Paul said. “Those are partial truths. They’re not full truths.”
A membership plan is not a mechanism to go out of network. In reality, it’s a tool. Sure, it helps with retention and conversion, but it does not magically replace the patients who leave when you drop their insurance.
The practices that fail typically make the same mistake. They dump insurance plans quickly, expecting the membership plan to fill the gap. It doesn’t really work that way.
“Just because you have a membership plan and then go out of network doesn’t mean your practice is going to thrive,” Paul said. “That’s part of the fallacy and that’s where people get into trouble.”
The Three Things You Need Before Dropping Insurance
Paul laid out a clear framework for practices considering the transition away from insurance dependence.
First, analyze your insurance mix. Not all insurance plans are equal. Some reimburse poorly. Some represent a huge percentage of your patient base. Employer-sponsored plans are particularly sticky because the patient pays nothing out of pocket.
“If you’re in an area with a high military base, the government is paying for that insurance,” Paul explained. “You’re not going to go out of network and suddenly all these patients are going to pay out of pocket. They’re not paying for it.”
Converting a patient who pays $50 a month for their own Delta Dental is straightforward. Converting someone whose employer covers everything is nearly impossible.
Second, get your membership plan working before you drop anything. Start by converting existing cash pay patients to the subscription. If that conversion fails, figure out why before creating more chaos.
“If you’re struggling to convert your cash pay patients over, which should be easier than converting insurance patients, then we need to figure out why,” Paul said. “Most of the time it’s a team problem. Your team members don’t believe in it or they’re not presenting it right.”
Third, turn on marketing. Dropping insurance without external marketing to replace lost patients is a recipe for empty chairs.
“One of the first questions I ask is, are you doing any external marketing?” Paul said. “Most of the time it’s like, what do you mean what’s my marketing budget? I’m going out of network. I’m not doing any marketing. And it’s like, okay, well, if you’re not going to invest in some external marketing without any more patients flowing in, it’s going to be tough.”
| Step | Action | Why It Matters |
| 1 | Analyze insurance mix | Know which plans to cut first based on reimbursement and patient volume |
| 2 | Launch membership plan | Test conversion on existing cash pay before adding complexity |
| 3 | Invest in marketing | Replace lost patients with new cash pay patients who convert to membership |
Your Hygiene Department Is Your Farm
Paul uses a farming analogy that reframes how practices should think about long-term profitability.
“If you’re a farmer and you have 10 acres that you’re farming, and all 10 acres are corn, and you come and say, ‘Hey, Paul, I really want to eat some peaches,’ well, how are we going to eat peaches?” Paul asked. “We’re either going to cut down some acres of corn and plant peach trees, or we’re going to go buy some more acreage.”
The hygiene department is the farm. It drives restorative treatment. If 90% of hygiene patients carry insurance, then 90% of treatment will be insurance-driven. The math does not change just because the doctor gets frustrated.
“Until you change the farm, you’re going to be stuck,” Paul said. “If you’re wanting to make a change long-term, you’ve got to get more uninsured cash pay patients coming through hygiene on a regular basis.”
This is why retention matters so much. Emergency patients come in with pain, accept treatment, and disappear. Hygiene patients come back every six months and generate predictable restorative work over years.
“Your insurance patients fill up your hygiene. They pre-appoint. That’s what’s making doctors mad,” Paul explained. “They look at their schedule and it’s like, holy crap, all I’ve got today is these low tier, low paid insurance patients. Yeah, but that’s what you’re farming.”
The Capacity Question Most Practices Ignore
Before dropping any insurance, Paul asks one critical question: Are you at capacity?
“If you have capacity that’s sitting there, you don’t want to jump out of network and create more capacity,” he said. “It’s not going to increase your bottom line.”
A practice at 80% capacity that drops insurance and falls to 60% capacity just took a massive pay cut. The fixed overhead remains. The hygienist still needs to be paid. The operatory still costs money.
“You almost want to get to where you’re like 110% capacity to then decide to go out of network because you’re going to lose patients,” Paul explained. “If you’re 80% capacity, why do you want to go out of network and go down to 70 or 60%?”
The exception is lifestyle design. A 65-year-old dentist who wants to work two days a week instead of four can afford to lose patients. Everyone else needs to fill the chairs before creating more empty ones.
Getting the Team to Actually Sell It
Adrian raised the implementation problem that plagues every dental technology. The software works. The strategy makes sense. But the team member who needs to have the conversation with the patient does not do it.
“You launch this amazing membership plan. You hand it to the team and they can’t do it,” Adrian said. “That’s my claim.”
Paul did not disagree. The solution is alignment through incentives.
“For whatever reason in dentistry, selling and incentives seems very dirty,” Paul said. “Your team probably isn’t wired like salespeople. But we’re all motivated by money.”
Dental Menu builds incentive programs directly into the membership plan cost. When a patient signs up and pays a $99 enrollment fee, $25 automatically goes to the front desk team member who enrolled them. The patient pays for the incentive. The doctor does not come out of pocket.
“As soon as we say, out of the 99 bucks you get 25, all of a sudden it’s the best value in dentistry,” Paul laughed. “It’s so funny, but the patient pays that. It’s built into the cost of the program.”
The hygiene side is trickier. Many practices pay hygienists on production, but membership benefits get written off as zero in the practice management software. The hygienist actually makes less on membership patients than insurance patients.
“I’ve talked to multiple hygienists,” Paul said. “Why did you not bring up the membership plan? Because I don’t get my collection bonuses. I just assume he signs up for Delta Dental because it’s better for me.”
The fix is realigning compensation so providers make more per hour on membership patients than any other category.
Your Best Patients Are Getting Your Worst Deal
“There’s always that 80/20 rule. 20% of my clients are 80% of my revenue. Your best patients, you’re giving the worst deal to, which is messed up,” Paul said. “Your crappiest patients that you can’t stand and you’re beating the insurance company for, they’re getting the best deal.”
The loyal cash pay patient who has visited for 20 years pays full UCR rates. The insurance patient who shops around and complains gets negotiated discounts. The incentives are completely backwards.
“If you’re a doctor who’s complaining about insurance reimbursements, complaining about downward pressure on prices from DSOs, and then the third thing you tell me is, well, I don’t want to do a membership plan because I want to charge astronomical UCRs to the unsuspecting 67-year-old who’s been in my practice for 20 years,” Paul said. “That’s messed up. Stop complaining about those other two issues.”
In This Episode:
Paul Lowry, CEO and Co-founder of Dental Menu
Paul Lowry is the founder of Dental Menu, one of the most operationally sophisticated dental membership plan platforms in dentistry. Paul spent years doing external marketing for practices starting in 2008, tracking what actually happened to cash pay versus insurance patients over time. That research led him to build a platform that helps practices launch, manage, and financially optimize in-house membership plans with full software integration, team training, and incentive systems.
Adrian Lefler, CEO and Co-founder of My Social Practice
Adrian Lefler, CEO of My Social Practice, is a seasoned expert in the dental marketing industry with 14 years of experience. He is widely recognized for his engaging and informative presentations. Based in Suncrest, Utah, Adrian shares his life with his wife, four children, and a lively mix of pets. My Social Practice is a leading dental marketing company, and Adrian is passionate about helping dental professionals succeed in this dynamic field.
Frequently Asked Questions
What is the difference between a discount plan and a membership plan?
A discount plan offers reduced fees on services with no recurring revenue component. A membership plan is a subscription model where patients pay monthly for access to preventive care, creating predictable recurring revenue and improving retention. The subscription model mirrors how insurance companies make money through prepaid benefits, breakage, and consistent patient engagement.
How many patients will I lose when I drop insurance?
It depends on your insurance mix. Employer-sponsored plans where patients pay nothing out of pocket are nearly impossible to convert. Self-pay insurance patients who already pay premiums are much easier to transition. Practices typically see 10-20% patient loss when dropping insurance, which is why capacity should be at 105-110% before making the change.
Should I launch a membership plan before or after dropping insurance?
Before. Start by converting existing cash pay patients to the membership plan. If conversion struggles, identify why before adding the complexity of dropping insurance. This tests your team’s ability to present the plan and ensures the system works before you need it to replace lost insurance patients.
How do I get my team to actually sell the membership plan?
Align incentives. Build enrollment bonuses into the cost of the plan so the patient pays for it. A $25 bonus per enrollment motivates front desk team members without costing the practice anything extra. For hygienists, restructure compensation so they make more per hour on membership patients than on insurance or cash pay patients.
