Potential for Wellness Plans in Human Health Care

It’s no big secret that many private healthcare practices are struggling. According to a 2011 survey from CNN Money, half of all doctors in the nation operate a private practice, and many list reduced reimbursements, mounting drug costs, and changes in regulations as key factors hurting their profitability. While most physicians are more interested in helping patients than turning a profit, financial concerns may force them to turn away those in need of care. What’s worse, a practice forced to close its doors can leave a void of available healthcare in the community they once served. Even for those practicing on a larger scale, financial woes are hurting profitability, and preventing doctors from providing valuable care. Emergency room visits — often the only option for the uninsured or under-insured — have become a huge drain on regional hospitals. In a 2007 report, the Institute of Medicine described crowded emergency rooms as a “growing national crisis,” causing delay in patient care, ambulance diversions to other hospitals, and an inadequate capacity to handle sudden patient influxes from public health crises or other catastrophic events. Many patients crowding emergency rooms could instead be served proactively and preventatively at a doctor’s office or clinic, but once again, financial barriers limit access. What’s needed is a realistic way to grant access to these patients, while still providing a steady income stream for doctors. As we’ve examined in previous blog entries, providers in the veterinary space — such as Banfield Pet Hospital, with over 1 million pets on wellness plans — have used a membership model to great success. Pet owners get access to regular visits and preventative care at a price they can afford, leading to healthier pets and happier [...]

2016-10-29T16:36:44+00:008:44 am|

Paving the Way for Wellness Plans in the Dental Industry

In 2009, Dr. Dan Marut, DMD founded Quality Dental Plan – an Extend Credit Partner – out of his Dental practice in Ashland, Oregon. Dr. Marut’s motivations were simple: establish a way for dentists to reliably provide their services to patients without traditional insurance, through a system that is mutually beneficial to both parties “When people think of Dentistry, the first thing they think of is straight, white teeth. Unfortunately, the second thing they think of is cost,” says Dr. Marut. As a practicing dentist, Dr. Marut frequently witnessed the consequences of patients putting off dental care for financial reasons. For those without traditional insurance, the only alternatives to paying high, out-of-pocket costs for single dental visits are coupon programs such as dental discount cards. While these options may provide reduced rates on single procedures, they cause patients to “shop around” from dentist to dentist, providing little incentive to remain loyal to one provider. What’s more, even with the discount provided, patients still end up accessing each procedure at a cost similar to traditional insurance. “Let’s face it, anytime a third party is part of any economic transaction, their need to make a profit raises the costs and ultimately, the price of that economic model,” say’s Dr. Marut. “It is no different in healthcare or in our dental practices. On the other hand, Quality Dental Plan allows our dentists to offer savings to their patients, in part because the third party is eliminated, so the patient relationship stays between the dentist and patient — the way it should be.” By utilizing the QDP model, dental practices can offer membership programs to their patients at a rate competitive to dental discount cards and coupon programs. This grants the patient freer access to [...]

2017-01-18T17:54:07+00:008:45 am|

Wellness Plans: Leveraging the “Members-Only” Phenomenon

As we’ve discussed over the past two weeks, Veterinary practices across the country are employing Wellness Plans to increase office visits and customer loyalty, while ensuring consistent and personalized care for pet owners. The principle at the core of the Wellness model’s success is the strength of membership and loyalty programs, a concept tried and true in multiple industries. For a key example, we can look no further than the juggernaut of members-only-savings, Costco. In its nearly three decades in business, the success of the plus-sized wholesale chain is dwarfed only by the pallets of foodstuffs, appliances, and household items that line its aisles. By paying a small annual membership fee, consumers gain access to savings and benefits they wouldn’t find at any other retailer. Once they’ve committed to a membership (as 1 in 5 Americans have), consumers are consistently more likely to patronize Costco over competitors, and spend more freely due to the perceived savings afforded by the program. A 2007 Harvard Business School study referred to this phenomenon as the “fee-to-savings” link. Through field data research and a series of customized studies, they showed that fees can serve as a signal of price discounts. Stores that charge fees are perceived as offering better deals for identical items, and the presence of fees can increase consumer spending and overall store profitability. The study additionally showed that the presence of fees can drive choice of retail outlets, such that stores with membership fees are more popular even when they offer the same goods at the same prices as stores without fees. Furthermore, the loyalty that comes with a consumer’s commitment to a membership program carries benefits beyond that single member’s spending. A 2011 Colloquy Loyalty Census, entitled [...]

2017-01-18T17:56:01+00:008:46 am|

Customizing Wellness Plans: Convenience for the Consumer, Confidence for the Provider

Last week, we looked at how a budding Veterinary practice used Wellness Plans to offer reliable discounted services to pet owners, building a strong relationship with the community and creating the necessary customer loyalty to foster a robust first year in business. In today’s post, we’ll share how other providers are customizing Wellness Plan modules to provide a variety of convenient services to their customer base, while mitigating the risk of adding new features to their practice. As we discussed previously, a recent Bayer study found that financial obstacles often have a great influence on pet owners’ care decisions. While the flexibility afforded by Wellness Plans helped the young Vet in last week’s post generate customer loyalty in a lower-income demographic, discounted care is only the beginning. A well-established practice opening in the San Francisco Bay Area found that their more fiscally comfortable community was less concerned about cost, and more interested in quality, convenience and predictability in care. In this instance, the new practice found great success in offering pet specific, tailored plans to provide a full range of pet care services. Many successful Veterinary practices expand over time to incorporate other facilities — kennel space, in-house pharmacy, pet-care supplies, etc. — effectively becoming a “one-stop-shop” for pet owners. However, the risk associated with adding hard costs to the business can be daunting. Unsold pet food, expired medication, and empty kennel space can quickly add up to quarterly losses. The loyalty assured by Wellness Plans acts to mitigate the risks of opening up new features, ensuring consistency and predictable consumption of products and services. Offering all of these services in-house makes the decision easy for many pet owners, as going to their family Veterinarian for these services brings with [...]

2017-01-18T17:56:56+00:008:47 am|

Wellness Plans: Help Patients, Grow Your Business, Build Loyalty

Dr. J, a young Veterinarian, and her husband set out to build their own clinic early last year. While building a practice from the ground up – as opposed to buying one outright from another practitioner – can lead to a numerous rewards and a great deal of independence, it often comes with countless challenges. Like many entrepreneurial vets, dentists, and other practitioners before them, this young couple found their greatest challenge in building and maintaining a stable client base. Traditional marketing offered mixed results, and most promotional deals and coupons lead to single visits, but did little to increase loyalty. Furthermore, the many potential patients in their community found the cost of caring for their pets increasingly difficult to manage. According to the Bayer 2011 Veterinary Care Usage Study, pet owners overwhelmingly want quality veterinary care for their pets, but fiscal concerns often put price before loyalty. Many pet owners find themselves bouncing between lowest bidders for each procedure, instead of creating a lasting relationship with a particular doctor. In a community with mixed incomes, Dr. J needed a financial option that created customer loyalty, while ensuring pets got the care they needed. By employing a Wellness Plan module, they were able to meet these needs and create a comfortable financial base for their budding business. Already quite popular in the Veterinary space, Wellness Plans allow patients to select a monthly payment option and care plan directly through the provider. The young Vet was able to create a variety of care plans that fit the needs of her community: puppy plans, feline plans, senior plans, etc., each uniquely suited for the needs of different pets. By paying a moderate monthly fee –averaging $40 a month in the [...]

2017-01-18T17:58:39+00:008:49 am|