PRACTICE OF DENTISTRY

(BUSINESS ASPECT)

VS.

PRACTICING DENTISTRY

(PROFESSIONAL ASPECT)

Changes in the Delivery of Dental Benefits

Indemnity

Hybrids

PPO

HMO

Loss of control

FEE-FOR-SERVICE

THE DENTIST RECEIVES A FEE FOR EACH SERVICE

THE DENTIST IS NOT AT RISK

MANAGED DENTAL CARE:

… attempts to manage the cost and quality of dental care through the use of various delivery systems and reimbursement models

PREFERRED PROVIDER ORGANIZATION
“PPO”

A dental plan with a network of dentists
who have agreed to accept a specific
fees for covered services
Reimbursement is on a fee-for -service
basis
THE DENTIST IS NOT AT RISK

DENTAL HMO
“CAPITATION/PREPAID”
A dental plan that reimburses the
dentists on a fixed “per capita” basis, usually monthly for each individual
or family
Payment is made irrespective of the
number of services rendered or beneficiaries seen
THE DENTIST IS AT RISK

The Dental Marketplace -
Delivery Models

Current Dental Enrollment by Plan Type*

Trends in Dental Care

Nearly 60% of covered employees are currently enrolled in managed dental programs.

DPPOs are growing rapidly (>30% annually)
Growth in managed dental enrollment helped to control employers’ overall dental cost increase to 5% in 1999.

Dental Vendors

Participating dentists by major DPPO vendor

Major DHMO Vendors

Dental Vendors - Market Share
Participation in dental plans (employees and dependents)
•Total dental benefits market - 2000

Dental Care in Traditional and Managed Plans

Cost
¹
“Quality”
(or appropriate care)

Dental Care in Traditional & Managed
Plans

•No valid or reliable studies currently exist
which indicate that there is a “variance” in
quality between traditional and managed care
dental programs
•The limited studies available indicate there is
no distinction between the care delivered under
dental benefit programs with differing financial incentives for dentists
(E.G., Massachusetts Employees Study, Washington Delta Study)

Dental Marketplace Data

Surveys of more than 34,000 private firms in 1993 and 21,000 private firms in 1997 showed that more employees were receiving dental benefits coverage through their employers, not fewer as had been expected.

In 1993, said the Rand researchers, 59% of workers with health benefits also had dental benefits. The number climbed to 65% by 1997.

Managed Dental Care February, 2000

Dental Benefits Enrollment by Employer Type
- Full-Time Employees*

Percentage of Full-Time Employees by Size of Company

Percentage of Employees That Have Dental Benefits

Dentist Income

75% of dentists’ professional income is derived from 1/3 of population with employee dental benefit

Myth #1

That dentistry has “held the line” re: costs

Changes in the Dental Marketplace
1998 Consumer Price Index - Increases in selected Items

The Dental Marketplace
- Financial Overview

Trend rates

    •Traditional indemnity              7% - 10%

      - Many plans in excess of 10%

    •DPPO                                         4% - 7%

    •DHMO                                       2% - 4%

No abatement in trend increases is expected

Changes in the Dental Marketplace
Projected Spending on Dental Services 1999 - 2008
($ in billions)

Dental Providers

Effect of Managed Care on Dentists’ Net Income
(responses among managed care participant dentists)

The Changing Face of the Marketplace: is Managed Care Right for You?

RISK!

FINANCIAL

ADMINISTRATIVE

LEGAL

INDEPENDENCE

RISK

EXTENT/DEGREE OF RISK EXPOSURE

CAN RISK BE MANAGED OR MINIMIZED

WHAT ARE POTENTIAL BENEFITS

CHANGING DENTISTS’ MIND-SETS

THINK IN TERMS OF HOURLY INCOME, NOT FEE FOR A SPECIFIC SERVICE

ANALYZE INCOME FOR TREATING A POPULATION OF PEOPLE, NOT AS INCOME FROM EACH PATIENT

THEY ARE NOT ALL ALIKE
Robert Mehlman D.D.S.

In reality, there are good programs available and there are programs that are not beneficial for the average dental practice. In any given part of the country, the quality of dental health plan programs can vary dramatically.

KEY “REAL WORLD” FACTORS IN CHOOSING A MANAGED CARE PROGRAM

RECOMMENDATION OF A CURRENT PROGRAM PARTICIPANT WHOSE OPINION YOU TRUST

WHAT IS THE REPUTATION AND STAYING POWER OF THE PROGRAM?

IN CAPITATION (DHMO), WHAT IS THE PER MEMBER PER MONTH PROVIDER COMPENSATION?

IN A PREFERRED PROVIDER PROGRAM (DPPO), WHAT IS THE SCHEDULE OF MAXIMUM ALLOWABLE CHARGES COMPARED TO MY USUAL FEES ?

EXACTLY, WHICH SERVICES ARE COVERED BY THE PROGRAM?

KEY “REAL WORLD” FACTORS IN CHOOSING A MANAGED CARE PROGRAM

CAN PROVIDERS CHARGE THEIR USUAL AND CUSTOMARY FEES FOR NON-COVERED SERVICES? IF NOT, WHAT ARE THE RESTRICTIONS?

INA DHMO, WHICH SERVICES REQUIRE A COPAYMENT AND WHAT IS THE COPAYMENT AMOUNT?

HOW IS SPECIALTY CARE HANDLED?

WHAT IS THE TERMINATION PROCEDURE (FOR MYSELF; FOR THE PROGRAM)?


	Nearly 60% of covered employees are currently enrolled in managed dental programs.
	DPPOs are growing rapidly (>30% annually) Growth in managed dental enrollment helped to control employers’ overall dental cost increase to 5% in 1999.


	Participating dentists by major DPPO vendor
	Major DHMO Vendors


	Surveys of more than 34,000 private firms in 1993 and 21,000 private firms in 1997 showed that more employees were receiving dental benefits coverage through their employers, not fewer as had been expected.

	In 1993, said the Rand researchers, 59% of workers with health benefits also had dental benefits. The number climbed to 65% by 1997.

	Managed Dental Care February, 2000


	Percentage of Full-Time Employees by Size of Company
	Percentage of Employees That Have Dental Benefits


	75% of dentists’ professional income is derived from 1/3 of population with employee dental benefit


	Trend rates
	•Traditional indemnity 7% - 10%
	- Many plans in excess of 10%
	•DPPO 4% - 7%
	•DHMO 2% - 4%
	No abatement in trend increases is expected


	EXTENT/DEGREE OF RISK EXPOSURE
	CAN RISK BE MANAGED OR MINIMIZED
	WHAT ARE POTENTIAL BENEFITS


	THINK IN TERMS OF HOURLY INCOME, NOT FEE FOR A SPECIFIC SERVICE

	ANALYZE INCOME FOR TREATING A POPULATION OF PEOPLE, NOT AS INCOME FROM EACH PATIENT


	In reality, there are good programs available and there are programs that are not beneficial for the average dental practice. In any given part of the country, the quality of dental health plan programs can vary dramatically.


	RECOMMENDATION OF A CURRENT PROGRAM PARTICIPANT WHOSE OPINION YOU TRUST
	WHAT IS THE REPUTATION AND STAYING POWER OF THE PROGRAM?
	IN CAPITATION (DHMO), WHAT IS THE PER MEMBER PER MONTH PROVIDER COMPENSATION?
	IN A PREFERRED PROVIDER PROGRAM (DPPO), WHAT IS THE SCHEDULE OF MAXIMUM ALLOWABLE CHARGES COMPARED TO MY USUAL FEES ?
	EXACTLY, WHICH SERVICES ARE COVERED BY THE PROGRAM?


	CAN PROVIDERS CHARGE THEIR USUAL AND CUSTOMARY FEES FOR NON-COVERED SERVICES? IF NOT, WHAT ARE THE RESTRICTIONS?
	INA DHMO, WHICH SERVICES REQUIRE A COPAYMENT AND WHAT IS THE COPAYMENT AMOUNT?
	HOW IS SPECIALTY CARE HANDLED?
	WHAT IS THE TERMINATION PROCEDURE (FOR MYSELF; FOR THE PROGRAM)?