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Third party payment: a mystery story
EDITORIALS
Third party payment: a mystery story
■ ■ D o you like mysteries? Well try this one: If ten people each need $100 worth of dental treatm ent for a total of $ 1,000, they can all get the same treatment for $25 each and a total of $250 if they participate in a dental insurance program. The dentist can still get his original $1,000 fee and the insurance company receives operational costs plus a profit. This strange mathematical phenomenon is be yond my understanding. The patient gets the same service for much less money and the dentist still receives the same payment—it does not make sense and we all know that it does not make sense. Something has to give. The result is bound to be less treatm ent, reduced fees, or more money—or a numbers game in which new money is coming in all the time to cover yesterday’s def icits. And the game will catch up with the players sooner or later. At the February Board meeting, a trustee reported that one carrier stated that in actuarial computations a $60 average per claim at a greater than 48% utilization of prepaid dental care within a program would result in economic problems. The most enigmatic factor in the dental profes sion currently is third party payment, dental health insurance, prepaid dental care, or what ever name you care to give it. And there certainly are some unprintable ones! That is not to suggest that third party payment is all bad. It is hard to knock a system that brings dental care to a great er number of people than ever before and for which the dentist will have practically a 100% collection of fees charged. That is not bad if the dentist is permitted to charge his regular fee and i f he is permitted to carry out his choice of treat ment plan. These are two well-known concerns, as is the “ everybody do his own thing” approach
to insurance forms. Third party involvement brings about other changes in the dental profession that were not foreseen as clearly. The United Automobile W orkers’ new dental insurance program in Michigan brought to light some other reasons for concern: Several months before the program was to go into effect, patients postponed their dental treatment until coverage began. This meant fewer patients and an economic recession for the dentist for weeks before the insurance program was started. Then when coverage be came effective there was an avalanche of pa tients; dentists and laboratories were working overtime and supply houses were running out of materials. More recently, large numbers of auto mobile workers have been laid off and again local dental practices plunged economically. (Some first-hand accounts of the dental practice seesaw related to UAW will be published in next month’s J O U R N A L .)
Dentists are not the only ones trying to fathom the mysteries of dental insurance. Patients seem to know practically nothing about prepaid dental care. Their sponsoring organizations and the in surance companies know something of the busi ness aspects of the program, but have little or no appreciation for the technical nitty-gritty of the dental services to be delivered. All of them seem to have some “ pie in the sky” expectations re garding the wonderful magic wrought by insur ance. Prepaid dental care can be good for both the patient and the dentist, but the dental profession must make every effort to guide this mammoth new element in our profession so that this mys tery story will have a happy ending. H .C .B. JADA, Vol. 90, March 1975 ■ 517
Third party payment: a mystery story
■ ■ D o you like mysteries? Well try this one: If ten people each need $100 worth of dental treatm ent for a total of $ 1,000, they can all get the same treatment for $25 each and a total of $250 if they participate in a dental insurance program. The dentist can still get his original $1,000 fee and the insurance company receives operational costs plus a profit. This strange mathematical phenomenon is be yond my understanding. The patient gets the same service for much less money and the dentist still receives the same payment—it does not make sense and we all know that it does not make sense. Something has to give. The result is bound to be less treatm ent, reduced fees, or more money—or a numbers game in which new money is coming in all the time to cover yesterday’s def icits. And the game will catch up with the players sooner or later. At the February Board meeting, a trustee reported that one carrier stated that in actuarial computations a $60 average per claim at a greater than 48% utilization of prepaid dental care within a program would result in economic problems. The most enigmatic factor in the dental profes sion currently is third party payment, dental health insurance, prepaid dental care, or what ever name you care to give it. And there certainly are some unprintable ones! That is not to suggest that third party payment is all bad. It is hard to knock a system that brings dental care to a great er number of people than ever before and for which the dentist will have practically a 100% collection of fees charged. That is not bad if the dentist is permitted to charge his regular fee and i f he is permitted to carry out his choice of treat ment plan. These are two well-known concerns, as is the “ everybody do his own thing” approach
to insurance forms. Third party involvement brings about other changes in the dental profession that were not foreseen as clearly. The United Automobile W orkers’ new dental insurance program in Michigan brought to light some other reasons for concern: Several months before the program was to go into effect, patients postponed their dental treatment until coverage began. This meant fewer patients and an economic recession for the dentist for weeks before the insurance program was started. Then when coverage be came effective there was an avalanche of pa tients; dentists and laboratories were working overtime and supply houses were running out of materials. More recently, large numbers of auto mobile workers have been laid off and again local dental practices plunged economically. (Some first-hand accounts of the dental practice seesaw related to UAW will be published in next month’s J O U R N A L .)
Dentists are not the only ones trying to fathom the mysteries of dental insurance. Patients seem to know practically nothing about prepaid dental care. Their sponsoring organizations and the in surance companies know something of the busi ness aspects of the program, but have little or no appreciation for the technical nitty-gritty of the dental services to be delivered. All of them seem to have some “ pie in the sky” expectations re garding the wonderful magic wrought by insur ance. Prepaid dental care can be good for both the patient and the dentist, but the dental profession must make every effort to guide this mammoth new element in our profession so that this mys tery story will have a happy ending. H .C .B. JADA, Vol. 90, March 1975 ■ 517