Trends in Dentistry: Alternatives to Insurance

By Jason Mazda

The impact of declining dental insurance reimbursements on laboratories is no secret. When dentists are paid less for procedures, they demand lower fees from laboratories. In a 2016 Inside Dental Technology article, Gordon Christensen, DDS, MSD, PhD, posited that the profession was "ready to rise up with a major anti-third-party payment revolution," and that appears to have begun with the emergence of several new platforms that offer alternatives to traditional dental insurance.

Sefira Fialkoff authored an article for IDT's sister publication Inside Dentistry in September, titled "The Big Swerve," about alternatives to traditional dental benefits providing a new route to success. Fialkoff spoke to IDT about what she learned in researching and writing that article.

IDT: How significant is the need to decrease costs for patients and increase profits for dentists, and what role has private insurance played in this problem?

Sefira Fialkoff: The average cost of dental care is increasing, as a 2016 analysis found that for most adults with private dental benefits (69%), total financial outlays for premiums, copays, and coinsurance exceeded the market value of the dental care consumed. However, dentists are not seeing a commensurate increase in income; reimbursement rates from private insurance plans have declined over a 10-year period. The fees for the three most common prosthodontic and periodontal procedures increased from 2005 to 2014, but reimbursement rates for those procedures decreased over the same time frame. Recent studies have concluded that approximately 75% of the population visits a dentist annually, but the increase in demand has not translated into an overall increase in profit. Estimates vary, but most say dentists only end up with approximately half of what patients and their employers pay to traditional insurance companies.

IDT: What are some of the alternative payment models that are available?

Fialkoff: In addition to traditional fee-for-service and dental discount plans, there are now membership plans and self-funded plans. Membership plans are dental care plans offered by dentists to their patients; rather than simple discounts, these plans entail a flat fee on a monthly or annual basis that covers basic preventative and diagnostic needs, and then an affordable rate as set by the dentist for restorative and specialty treatments. Meanwhile, with self-funded dental plans, the employer uses a federal exemption to provide group dental benefits to its employees, working closely with care providers to control claim costs and utilize prearranged "leased" discounts.

IDT: How can these new services help?

Fialkoff: With Kleer membership plans, for example, dentists keep 90% or more of all patient payments, which is significantly more than the percentage they keep with traditional insurance. Patients make Kleer subscription and treatment payments directly to their dentists, not to an insurer or a third-party administrator. Services such as BoomCloud and Dental HQ, by contrast, provide software for dental practices to design and implement their own customized in-house membership programs; BoomCloud has only merchant fees for software usage and a flat fee that does not change as a practice grows, and Dental HQ only takes 8% residual on each membership processed. ProCare Dental Services, meanwhile, is unique from traditional self-funded group plans in that it eliminates adjudication, which means that no time is wasted arguing with administrators over what is and is not covered; it pays the dental provider his or her usual fee schedule in full, with no caps on utilization. Everyone who uses ProCare's system pays a small licensing fee, but the dentists work directly with employers so they collect 100% of the fees.

IDT: What are the risks of implementing these alternatives?

Fialkoff: They offer the opportunity to secure more patients and more income with a minimal financial investment, but when incorporated improperly, these alternatives may be risky both legally and in terms of the efficient use of office resources. Regulations vary by state, and administrative requirements will vary based on the specific plan and the size of the practice. Additionally, if all goes well, the office needs to be prepared to handle a large inflow of patients.

IDT: Of course, a large inflow of patients is generally a good problem to have. If these alternatives do make such a positive impact, how will that trickle down to the rest of the dental team, including laboratories?

Fialkoff: The impact remains to be seen. Some say it will be so significant that traditional dental insurance providers will be crippled; others say these new services will simply supplement traditional insurance. Regardless, any increase in patient volume and profit margin for the dental office should subsequently create more work for the entire dental team as well as higher budgets for laboratory bills.