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Some Management viewpoints on dental prepayment
Some management viewpoints on dental prepayment
George C. Foust, Jr.,* Philadelphia
Management at times views dental insur ance plans with little enthusiasm— they are just another fringe benefit. From the point of view of management, dental plans have low priority, they encourage many elective or cosmetic services, they are budgeting devices, they would result in increased dental charges, emerging plans follow no pattern and there is con troversy among the insurance organiza tions. In order to expedite management1s actions and expand dental coverage, sev eral recommendations are made: clarifi cation of the purpose of dental plans, education of the public and management about fundamentals of dental procedures and costs, education of the dentists and their suppliers about prepayment and in surance plans and recognition of the necessity to gain management’s accept ance of dental insurance or prepayment plans. The potential of dental insurance is limited until management’s acceptance has been won.
I am not an expert in dentistry. My spe cialty and that of my employer is “ em ployee benefits,” sometimes called “fringe
benefits.” We have been giving advice to management for over 30 years and conse quently feel reasonably qualified to dis cuss trends and developments in employee benefits in general and dental plan bene fits in particular from the management point of view. Much is known and has been written about employee benefits, their develop ment during and after the war, and their current importance to management, la bor, banks, insurance companies, hospitalmedical service organizations and to gov ernment. Many of those representatives present at this conference undoubtedly are familiar with the fundamental facts relating to the growth of employee bene fits and the essential trends in plan design and financing. By working continuously with management on these matters, a definite impression is gained that most management views dental insurance (or dental prepayment) plans with a distinct lack of enthusiasm. To them it is “just another fringe benefit” — just another part of an ever-increasing package. Our own company believes in dental insurance. Its medical benefit plans covers nearly all dental work (except for ex tremely routine procedures and orthodon tics) . We are aware that current estimates place the number of “ dentally insured”
94/174 • T H E J O U R N A L O F THE A M E R IC A N DENTAL A S S O C IA T IO N
people in the United States between 1 and 2 million and that dental expenses represent approximately 10 per cent of the total health bill of the United States. m a n a g e m e n t ’ s v ie w s
Why then is management less than en thusiastic? Why are they hesitating or at best moving slowly? Rightly or wrongly, many management spokesmen feel some what as follows: 1. Dental plans are low on the priority list. Employee benefit plans are like the hu man mouth— that is, in most instances they need attention, often serious atten tion. The benefits needing attention (or at least receiving it) are adequate pen sions, death benefits in the form of group insurance or widows’ pensions, income continuation during both short-and long term disabilities and medical care benefits for basic and major expenses while em ployees are active or in retirement. Management simply has benefit plan problems which to it are more important. When the subject of dental coverage was mentioned to one executive, he said: “ I worry about the house before the shrubs.” Still later in the conversation, he said: “Nobody dies from dental disease.” Actu ally, this may or may not be true and it confuses the issue— after all, nobody dies from a broken arm either. 2. Many dental plans are mainly budgeting devices. They smack of hand holding or pater nalism. Many plans are simply “ dollartrading” plans. Management, to a large extent, does not like to adopt benefit plans for budgeting routine expenses. 3. Dental plans cover and encourage many services that are elective or cos metic. This is a serious concern and it is cer tainly not lessened by the slogan of New York’s Group Health Dental Insurance Plan: “For good health and good looks.” It’s the “good looks” aspect that gives
some pause to the businessman who may be paying part of the plan cost. In this connection, I quote from a letter I re cently received from an executive: “ There are so many aspects o f dental expense insurance that reflect an employ ee’s personal wishes, whether in terms of not electing to follow good dental hygiene or in actually electing unnecessary dental care, that there seems to be clear justifi cation for proceeding cautiously.” 4. Dental plans would result in in creased dental charges. This controversial thought has been expressed several times recently. In one instance, a speaker advocating the es tablishment of a dental service corpora tion told dentists in his audience that the establishment of such a corporation would result in materially increased in comes for the dentists involved. Whether this increase was to result from handling more patients and providing more service or simply because fees would be increased was not made clear. This same accusa tion, of course, has been hurled at physi cians in connection with major medical plans. 5. Emerging dental plans follow no pattern. The field is currently so chaotic that delay in moving ahead seems advisable. At this time, it seems hardly necessary to do more than merely indicate the vast range of available patterns. At one ex treme are plans aimed at covering 100 per cent of costs for routine care both preventive and therapeutic but limited in their coverage of serious conditions. At the other extreme are plans aimed solely at helping members pay for heavy dental expenses. In between are plans with special schedules for certain types of expenses and deductibles for others. Some exclude orthodontics and procedures pri marily cosmetic in nature. Some are spon sored by dental societies, others by insur ance companies and still others by closed panels of dentists. The range in premium costs is tremen dous. Liberal plans can approximate the
FOUST . . . V O LU M E 49, A U G U ST 1944 • 95/175
“ standard” plans and is increasingly in cost of a good “comprehensive medical” terested in the “ tailor-made” approach plan. Although the wide range in patterns for his employees. Thus, he may change may be healthy, particularly in a new allowances for certain surgical proce field, the point here is that the many dures, reduce allowances for normal ma variations tend to confuse management. ternity, and broaden the definition of 6. Too much controversy exists among dependents to include older children or those who are disabled or other depend insuring organizations. Although perhaps not typical, here is ent relatives. He may refine the definition a statement made to dentists by the sec of “ hospital” to include those that spe retary of a state dental association. This cialize in the treatment of mental disease, statement appeared first in a dental soci alcoholism or problems of senility. 2. He has a detailed interest in where ety journal and was later quoted in the the premium dollar goes. Chartered Life Underwriters Journal (an More and more he demands periodic insurance periodical) : financial and experience exhibits which “ D o n ’ t be swayed by the hope that insur enable him to follow the trends for claims, ance com panies are the ones to handle your reserves of various kinds, carrier admin problem . T h e present policies are fine experi istration expenses and the like. He is ments, but insurance companies are in the business to make a dollar and you have no interested in the services provided by his control over their policies, even though they carrier and the costs for such services. He indicate they are willing to cooperate with is paying particular attention to “experi your society. T h ey w ill design plans for their ence rating” and to the possibilities of benefit— n ot yours.” “ self-insurance.” Contrast this preceding statement with 3. He is witnessing the fact that a the following statement by an insurance larger and larger part of the cost of health company executive: benefit plans is being paid for by the em “ O ur Am erican econom ic system is founded ployer. on the premise that open com petition w ill Either as a result of union negotiations produce the best service at the lowest price, or voluntary action, employee contribu and we feel that this is equally true in the field o f dental insurance as it has proven to be tions are being reduced, frequently at true in other forms o f health insurance.” the same time that plan benefits are im So much for some brief reasons why proving. This gives the employer an management, in general, is negative or, added reason for studying his plan design at least, is hesitating in the dental insur and analyzing what really happens to the premiums. When employees paid most or ance area. all of the cost for health insurance, the employer’s interest in these matters was m a n a g e m e n t ’ s a c t iv it ie s distinctly less. Now that the employer is Now it may be helpful to dwell on recent assuming a larger and larger part of the management activities regarding medical cost, he is analyzing his health insurance benefit plans. T o a large extent these ac plan (design and operation) just as care tivities indicate how management may fully as he analyzes every other phase approach the complex subject of dental of his business. He also insists that his car insurance. Some observations are as fol rier’s accounting and administrative methods be at least as efficient as his own. lows: If they are not, he is tempted to shift 1. There is greater management so carriers or “ do it himself.” phistication regarding plan design. 4. He recognizes that at least 90 per The modem benefit plan administrator cent of his health insurance plan cost is pays less and less attention to so-called determined by the actual claims paid un
96/176 • THE JO U R N A L O F THE A M E R IC A N DENTAL A S S O C IA T IO N
der the plan and consequently he is greatly interested in examining and an alyzing these claims. The subject of claims analysis and claims control of medical plans could well be discussed endlessly. Suffice it to say that today’s management is extremely concerned about rising claims under health insurance plans and the extent to which such a rise may be due to so-called “ claims abuse,” either unintentional or intentional. Top management insists that health insurance dollars not be wasted. Therefore, plan administrators are under continual pressure to achieve every rea sonable economy. For those in the dental profession, there is a lesson here, and that is that dental insurance will not be accepted by man agement on a broad scale until it has been carefully studied, understood and accepted by men well versed in the opera tion of medical benefit plans. Although medical benefit insurance has been ex tremely popular with employees, it has given anxious moments to many man agement men. These management men now are informed much better than they were in a former day; they realize that dental insurance may contain, for them, many of the problems they have encoun tered in health insurance. What can be done to decrease manage ment hesitation (or to improve the “man agement climate” for dental insurance) ? First, the fact must be faced that many organizations are ready and willing to un derwrite dental insurance or dental pre payment plans for management. These include dental service corporations, group practice plans, casualty insurance compa nies, life insurance companies and other similar organizations. Although some of these underwriters continue to refer to dental insurance as “ experimental,” oth ers feel that enough experience has been generated so that the coverage has moved beyond the experimental stage. Whether experimental or not, group dental insur ance is readily available for purchase today.
E X P E D IT IN G A C T IO N
What, then, must be done to expedite management action in the field of dental insurance? 1. The purpose (or objectives) of den tal plans must be clarified. Management and the public and den tists themselves should understand what available plans are designed to do— not in terms of details, but in terms of funda mental objectives. Are the purposes basi cally different from those of a medical benefit plan? The life insurance companies and some segments of management favor what I will call the “insurance approach,” perhaps more accurately described as the “financial approach.” The aim is to pro tect the employee’s pocketbook against severe and unexpected drains arising from reasonable and necessary dental ex penses incurred by his family. This ap proach naturally leads to major medical and comprehensive medical patterns of benefits and is favored by those manage ments that already use these patterns for medical benefits and by insurance com panies that have successfully sold these patterns. A separate major or compre hensive plan of dental insurance may create favorable publicity for the em ployer, his employees and for good dental care, but the integration of dental benefits into an existing major or comprehensive medical plan seems more logical to some who study this subject. Contrasted to this “insurance ap proach” is the “ prepayment approach” which, in its simplest form, would budget the expenses a family could normally ex pect over the years for dental care. Al though such plans can and frequently do contain protection against the severe dental costs, the main emphasis in such plans is on the payment of “normal” ex penses. Still, a third approach could be labeled the “ preventive approach.” Here, the plan’s objectives would be to cover the costs of a great variety of preventive
FOUST . . . V O LU M E 69, A U G U ST 1964 • 97/177
measures but would also encourage the employee and his dependents to obtain better preventive dental care than would otherwise be the case in the absence of such a plan. This approach, which I un derstand is espoused by the dental pro fession, would unquestionably improve the dental health of the employees cov ered and, in theory at least, ultimately would be cheaper than paying the heavy costs which would result from dental neglect. This “ preventive approach” is frequently combined with the “prepay ment approach” ; and there have been occasional attempts to combine the pre ventive approach with the “ insurance approach,” although such plans involve a fairly complex design. Those who hope to interest manage ment in dental insurance should have logical answers to management’s ques tion: “ What should be the objectives of a good dental insurance program?” There is no easy or universally correct answer. My impression, at this date, is that man agement would place a much higher pri ority on protection against severe (and nonelective) dental charges and would attach much less importance to budgeting and prevention. 2. Educate the public and manage ment about the fundamentals of dental procedures and dental costs. Most people and most of management do not buy what they do not understand. People wonder to what extent dental pro cedures are elective (on part of the pa tient) or are cosmetic in nature. Surely, the dental profession should be able to reduce the mysteries here. Can dental procedures and their costs be broken down logically into broad classifications (understandable by lay men), so that dental insurance could be bought on a piecemeal basis. 3. Educate the dentists and their sup pliers about prepayment and insurance plans. Obviously the number of such plans and the people in such plans are unlikely to expand if the majority of dentists op
pose them or are even confused about them. Related to this is the danger (well known in medical insurance) that dentists will overcharge or recommend “ exces sive” treatment not realizing the basic principle that insurance does not create money, it merely distributes it. Most dentists are not statistical or financial experts, yet they should appreci ate that plans cannot be properly de signed or operated without careful and continuing actuarial scrutiny. The devel opment of dental insurance will result in the filing of dental claims. Dental claim charges (whether or not covered, partly covered, or fully covered) will be run through all sorts of electronic data proc essing equipment for statistical analysis. Dental insurance puts the dentist in a goldfish bowl. This forum, of course, indicates con cern that dentists become informed about dental insurance. Similar regional meet ings have been held, and such meetings are all to the good. American Manage ment Association seminars have touched on this subject lightly in the past and will probably concentrate more on it in the future; the results of such seminars may fall into the hands of dentists. Finally, it would seem advisable to include instruc tions in the dental schools about dental insurance since future dentists may collect a noticeable portion of their fees from such plans. 4. The leaders in the dental profession should recognize that management ac ceptance of and enthusiasm for dental in surance is the key to its rapid expansion. Until management is sold on the main principles of dental insurance, they will not set up such plans for their employees. This statement is not intended to under play the role of labor in dental insurance development (this role has been ex tremely important so far), or the role of consumer groups or of brokers and con sultants. It would seem to follow that unless dental insurance is accepted by manage
98/178 • THE J O U R N A L O F THE A M E R IC A N DENTAL A S S O C IA T IO N
ment as a logical employee benefit (join ing such other benefits as pensions, group life insurance, medical benefits and disa bility income), its potential is severely limited. Dental insurance should not be come identified largely with labor unions, consumer groups and associations of one kind or another. Surely there is a good possibility that dental plan designs will be developed that will appeal to manage ment and to labor alike as a proper part of an employee benefit package. P R E D IC T IO N S
Having been asked to do a little “ crystal gazing,” I will now indulge in this. Five years from now, I would expect to see five times as many persons covered by dental insurance as at present, say, perhaps 7.5 million people. This increase is not as fast an expansion as major medical experienced after start ing 15 years ago. Major medical covered
2 million persons at the end of 1954; five years later, more than 20 million, and today, more than 40 million. The reason for such rapid expansion is that major medical principles were accepted in large measure by management from the beginning. Speaking of crystal gazing, one author ity has forecast that by 1970, “ 50 per cent of dentistry will be provided under a pre paid plan of some type.” Another esti mated that in 9 years, 15 million people will be enrolled under dental prepayment plans. Dental insurance is bound to ex pand. How rapid this expansion will be depends on how closely the members of the dental profession and the various den tal insurance organizations meet manage ment’s objectives.
Presented at the Fifteenth N a tio n a l Dental H ealth Conference, C h ic a g o , A p r il 27-29, 1964. *V ic e president, Towers, Perrin, Forster & C rosby, Inc.
Are you going to the 105th annual session in November? If so, you may wish to see the majestic, towering redwoods at nearby Muir woods. This four-hundred-acre preserve of virgin redwood trees was designated in 1908 as a national monument to John Muir, the naturalist. Some of the giant trees soar more than 300 feet high, measure 20 feet in diameter, and are more than 2,000 years old. Located in a canyon at the foot of Mount Tamalpais, the park is about one-hour’s scenic drive northward across the Golden Gate into Marin County.
George C. Foust, Jr.,* Philadelphia
Management at times views dental insur ance plans with little enthusiasm— they are just another fringe benefit. From the point of view of management, dental plans have low priority, they encourage many elective or cosmetic services, they are budgeting devices, they would result in increased dental charges, emerging plans follow no pattern and there is con troversy among the insurance organiza tions. In order to expedite management1s actions and expand dental coverage, sev eral recommendations are made: clarifi cation of the purpose of dental plans, education of the public and management about fundamentals of dental procedures and costs, education of the dentists and their suppliers about prepayment and in surance plans and recognition of the necessity to gain management’s accept ance of dental insurance or prepayment plans. The potential of dental insurance is limited until management’s acceptance has been won.
I am not an expert in dentistry. My spe cialty and that of my employer is “ em ployee benefits,” sometimes called “fringe
benefits.” We have been giving advice to management for over 30 years and conse quently feel reasonably qualified to dis cuss trends and developments in employee benefits in general and dental plan bene fits in particular from the management point of view. Much is known and has been written about employee benefits, their develop ment during and after the war, and their current importance to management, la bor, banks, insurance companies, hospitalmedical service organizations and to gov ernment. Many of those representatives present at this conference undoubtedly are familiar with the fundamental facts relating to the growth of employee bene fits and the essential trends in plan design and financing. By working continuously with management on these matters, a definite impression is gained that most management views dental insurance (or dental prepayment) plans with a distinct lack of enthusiasm. To them it is “just another fringe benefit” — just another part of an ever-increasing package. Our own company believes in dental insurance. Its medical benefit plans covers nearly all dental work (except for ex tremely routine procedures and orthodon tics) . We are aware that current estimates place the number of “ dentally insured”
94/174 • T H E J O U R N A L O F THE A M E R IC A N DENTAL A S S O C IA T IO N
people in the United States between 1 and 2 million and that dental expenses represent approximately 10 per cent of the total health bill of the United States. m a n a g e m e n t ’ s v ie w s
Why then is management less than en thusiastic? Why are they hesitating or at best moving slowly? Rightly or wrongly, many management spokesmen feel some what as follows: 1. Dental plans are low on the priority list. Employee benefit plans are like the hu man mouth— that is, in most instances they need attention, often serious atten tion. The benefits needing attention (or at least receiving it) are adequate pen sions, death benefits in the form of group insurance or widows’ pensions, income continuation during both short-and long term disabilities and medical care benefits for basic and major expenses while em ployees are active or in retirement. Management simply has benefit plan problems which to it are more important. When the subject of dental coverage was mentioned to one executive, he said: “ I worry about the house before the shrubs.” Still later in the conversation, he said: “Nobody dies from dental disease.” Actu ally, this may or may not be true and it confuses the issue— after all, nobody dies from a broken arm either. 2. Many dental plans are mainly budgeting devices. They smack of hand holding or pater nalism. Many plans are simply “ dollartrading” plans. Management, to a large extent, does not like to adopt benefit plans for budgeting routine expenses. 3. Dental plans cover and encourage many services that are elective or cos metic. This is a serious concern and it is cer tainly not lessened by the slogan of New York’s Group Health Dental Insurance Plan: “For good health and good looks.” It’s the “good looks” aspect that gives
some pause to the businessman who may be paying part of the plan cost. In this connection, I quote from a letter I re cently received from an executive: “ There are so many aspects o f dental expense insurance that reflect an employ ee’s personal wishes, whether in terms of not electing to follow good dental hygiene or in actually electing unnecessary dental care, that there seems to be clear justifi cation for proceeding cautiously.” 4. Dental plans would result in in creased dental charges. This controversial thought has been expressed several times recently. In one instance, a speaker advocating the es tablishment of a dental service corpora tion told dentists in his audience that the establishment of such a corporation would result in materially increased in comes for the dentists involved. Whether this increase was to result from handling more patients and providing more service or simply because fees would be increased was not made clear. This same accusa tion, of course, has been hurled at physi cians in connection with major medical plans. 5. Emerging dental plans follow no pattern. The field is currently so chaotic that delay in moving ahead seems advisable. At this time, it seems hardly necessary to do more than merely indicate the vast range of available patterns. At one ex treme are plans aimed at covering 100 per cent of costs for routine care both preventive and therapeutic but limited in their coverage of serious conditions. At the other extreme are plans aimed solely at helping members pay for heavy dental expenses. In between are plans with special schedules for certain types of expenses and deductibles for others. Some exclude orthodontics and procedures pri marily cosmetic in nature. Some are spon sored by dental societies, others by insur ance companies and still others by closed panels of dentists. The range in premium costs is tremen dous. Liberal plans can approximate the
FOUST . . . V O LU M E 49, A U G U ST 1944 • 95/175
“ standard” plans and is increasingly in cost of a good “comprehensive medical” terested in the “ tailor-made” approach plan. Although the wide range in patterns for his employees. Thus, he may change may be healthy, particularly in a new allowances for certain surgical proce field, the point here is that the many dures, reduce allowances for normal ma variations tend to confuse management. ternity, and broaden the definition of 6. Too much controversy exists among dependents to include older children or those who are disabled or other depend insuring organizations. Although perhaps not typical, here is ent relatives. He may refine the definition a statement made to dentists by the sec of “ hospital” to include those that spe retary of a state dental association. This cialize in the treatment of mental disease, statement appeared first in a dental soci alcoholism or problems of senility. 2. He has a detailed interest in where ety journal and was later quoted in the the premium dollar goes. Chartered Life Underwriters Journal (an More and more he demands periodic insurance periodical) : financial and experience exhibits which “ D o n ’ t be swayed by the hope that insur enable him to follow the trends for claims, ance com panies are the ones to handle your reserves of various kinds, carrier admin problem . T h e present policies are fine experi istration expenses and the like. He is ments, but insurance companies are in the business to make a dollar and you have no interested in the services provided by his control over their policies, even though they carrier and the costs for such services. He indicate they are willing to cooperate with is paying particular attention to “experi your society. T h ey w ill design plans for their ence rating” and to the possibilities of benefit— n ot yours.” “ self-insurance.” Contrast this preceding statement with 3. He is witnessing the fact that a the following statement by an insurance larger and larger part of the cost of health company executive: benefit plans is being paid for by the em “ O ur Am erican econom ic system is founded ployer. on the premise that open com petition w ill Either as a result of union negotiations produce the best service at the lowest price, or voluntary action, employee contribu and we feel that this is equally true in the field o f dental insurance as it has proven to be tions are being reduced, frequently at true in other forms o f health insurance.” the same time that plan benefits are im So much for some brief reasons why proving. This gives the employer an management, in general, is negative or, added reason for studying his plan design at least, is hesitating in the dental insur and analyzing what really happens to the premiums. When employees paid most or ance area. all of the cost for health insurance, the employer’s interest in these matters was m a n a g e m e n t ’ s a c t iv it ie s distinctly less. Now that the employer is Now it may be helpful to dwell on recent assuming a larger and larger part of the management activities regarding medical cost, he is analyzing his health insurance benefit plans. T o a large extent these ac plan (design and operation) just as care tivities indicate how management may fully as he analyzes every other phase approach the complex subject of dental of his business. He also insists that his car insurance. Some observations are as fol rier’s accounting and administrative methods be at least as efficient as his own. lows: If they are not, he is tempted to shift 1. There is greater management so carriers or “ do it himself.” phistication regarding plan design. 4. He recognizes that at least 90 per The modem benefit plan administrator cent of his health insurance plan cost is pays less and less attention to so-called determined by the actual claims paid un
96/176 • THE JO U R N A L O F THE A M E R IC A N DENTAL A S S O C IA T IO N
der the plan and consequently he is greatly interested in examining and an alyzing these claims. The subject of claims analysis and claims control of medical plans could well be discussed endlessly. Suffice it to say that today’s management is extremely concerned about rising claims under health insurance plans and the extent to which such a rise may be due to so-called “ claims abuse,” either unintentional or intentional. Top management insists that health insurance dollars not be wasted. Therefore, plan administrators are under continual pressure to achieve every rea sonable economy. For those in the dental profession, there is a lesson here, and that is that dental insurance will not be accepted by man agement on a broad scale until it has been carefully studied, understood and accepted by men well versed in the opera tion of medical benefit plans. Although medical benefit insurance has been ex tremely popular with employees, it has given anxious moments to many man agement men. These management men now are informed much better than they were in a former day; they realize that dental insurance may contain, for them, many of the problems they have encoun tered in health insurance. What can be done to decrease manage ment hesitation (or to improve the “man agement climate” for dental insurance) ? First, the fact must be faced that many organizations are ready and willing to un derwrite dental insurance or dental pre payment plans for management. These include dental service corporations, group practice plans, casualty insurance compa nies, life insurance companies and other similar organizations. Although some of these underwriters continue to refer to dental insurance as “ experimental,” oth ers feel that enough experience has been generated so that the coverage has moved beyond the experimental stage. Whether experimental or not, group dental insur ance is readily available for purchase today.
E X P E D IT IN G A C T IO N
What, then, must be done to expedite management action in the field of dental insurance? 1. The purpose (or objectives) of den tal plans must be clarified. Management and the public and den tists themselves should understand what available plans are designed to do— not in terms of details, but in terms of funda mental objectives. Are the purposes basi cally different from those of a medical benefit plan? The life insurance companies and some segments of management favor what I will call the “insurance approach,” perhaps more accurately described as the “financial approach.” The aim is to pro tect the employee’s pocketbook against severe and unexpected drains arising from reasonable and necessary dental ex penses incurred by his family. This ap proach naturally leads to major medical and comprehensive medical patterns of benefits and is favored by those manage ments that already use these patterns for medical benefits and by insurance com panies that have successfully sold these patterns. A separate major or compre hensive plan of dental insurance may create favorable publicity for the em ployer, his employees and for good dental care, but the integration of dental benefits into an existing major or comprehensive medical plan seems more logical to some who study this subject. Contrasted to this “insurance ap proach” is the “ prepayment approach” which, in its simplest form, would budget the expenses a family could normally ex pect over the years for dental care. Al though such plans can and frequently do contain protection against the severe dental costs, the main emphasis in such plans is on the payment of “normal” ex penses. Still, a third approach could be labeled the “ preventive approach.” Here, the plan’s objectives would be to cover the costs of a great variety of preventive
FOUST . . . V O LU M E 69, A U G U ST 1964 • 97/177
measures but would also encourage the employee and his dependents to obtain better preventive dental care than would otherwise be the case in the absence of such a plan. This approach, which I un derstand is espoused by the dental pro fession, would unquestionably improve the dental health of the employees cov ered and, in theory at least, ultimately would be cheaper than paying the heavy costs which would result from dental neglect. This “ preventive approach” is frequently combined with the “prepay ment approach” ; and there have been occasional attempts to combine the pre ventive approach with the “ insurance approach,” although such plans involve a fairly complex design. Those who hope to interest manage ment in dental insurance should have logical answers to management’s ques tion: “ What should be the objectives of a good dental insurance program?” There is no easy or universally correct answer. My impression, at this date, is that man agement would place a much higher pri ority on protection against severe (and nonelective) dental charges and would attach much less importance to budgeting and prevention. 2. Educate the public and manage ment about the fundamentals of dental procedures and dental costs. Most people and most of management do not buy what they do not understand. People wonder to what extent dental pro cedures are elective (on part of the pa tient) or are cosmetic in nature. Surely, the dental profession should be able to reduce the mysteries here. Can dental procedures and their costs be broken down logically into broad classifications (understandable by lay men), so that dental insurance could be bought on a piecemeal basis. 3. Educate the dentists and their sup pliers about prepayment and insurance plans. Obviously the number of such plans and the people in such plans are unlikely to expand if the majority of dentists op
pose them or are even confused about them. Related to this is the danger (well known in medical insurance) that dentists will overcharge or recommend “ exces sive” treatment not realizing the basic principle that insurance does not create money, it merely distributes it. Most dentists are not statistical or financial experts, yet they should appreci ate that plans cannot be properly de signed or operated without careful and continuing actuarial scrutiny. The devel opment of dental insurance will result in the filing of dental claims. Dental claim charges (whether or not covered, partly covered, or fully covered) will be run through all sorts of electronic data proc essing equipment for statistical analysis. Dental insurance puts the dentist in a goldfish bowl. This forum, of course, indicates con cern that dentists become informed about dental insurance. Similar regional meet ings have been held, and such meetings are all to the good. American Manage ment Association seminars have touched on this subject lightly in the past and will probably concentrate more on it in the future; the results of such seminars may fall into the hands of dentists. Finally, it would seem advisable to include instruc tions in the dental schools about dental insurance since future dentists may collect a noticeable portion of their fees from such plans. 4. The leaders in the dental profession should recognize that management ac ceptance of and enthusiasm for dental in surance is the key to its rapid expansion. Until management is sold on the main principles of dental insurance, they will not set up such plans for their employees. This statement is not intended to under play the role of labor in dental insurance development (this role has been ex tremely important so far), or the role of consumer groups or of brokers and con sultants. It would seem to follow that unless dental insurance is accepted by manage
98/178 • THE J O U R N A L O F THE A M E R IC A N DENTAL A S S O C IA T IO N
ment as a logical employee benefit (join ing such other benefits as pensions, group life insurance, medical benefits and disa bility income), its potential is severely limited. Dental insurance should not be come identified largely with labor unions, consumer groups and associations of one kind or another. Surely there is a good possibility that dental plan designs will be developed that will appeal to manage ment and to labor alike as a proper part of an employee benefit package. P R E D IC T IO N S
Having been asked to do a little “ crystal gazing,” I will now indulge in this. Five years from now, I would expect to see five times as many persons covered by dental insurance as at present, say, perhaps 7.5 million people. This increase is not as fast an expansion as major medical experienced after start ing 15 years ago. Major medical covered
2 million persons at the end of 1954; five years later, more than 20 million, and today, more than 40 million. The reason for such rapid expansion is that major medical principles were accepted in large measure by management from the beginning. Speaking of crystal gazing, one author ity has forecast that by 1970, “ 50 per cent of dentistry will be provided under a pre paid plan of some type.” Another esti mated that in 9 years, 15 million people will be enrolled under dental prepayment plans. Dental insurance is bound to ex pand. How rapid this expansion will be depends on how closely the members of the dental profession and the various den tal insurance organizations meet manage ment’s objectives.
Presented at the Fifteenth N a tio n a l Dental H ealth Conference, C h ic a g o , A p r il 27-29, 1964. *V ic e president, Towers, Perrin, Forster & C rosby, Inc.
Are you going to the 105th annual session in November? If so, you may wish to see the majestic, towering redwoods at nearby Muir woods. This four-hundred-acre preserve of virgin redwood trees was designated in 1908 as a national monument to John Muir, the naturalist. Some of the giant trees soar more than 300 feet high, measure 20 feet in diameter, and are more than 2,000 years old. Located in a canyon at the foot of Mount Tamalpais, the park is about one-hour’s scenic drive northward across the Golden Gate into Marin County.