Health Insurance And Dental Benefits In The U.S.

The dental benefits industry quickly grew out of the blossoming health insurance market. Hopefully, we can better appreciate the dental benefits industry by becoming more familiar with its roots and natural progression.

Health insurance began to appear in the United States around 1850 and it only offered benefits to those who were disabled by accidental injury.5 Benefits for medical treatment didn’t begin to emerge until 1910, and coverage for hospital, surgical, medical and nursing care expenses began in 1930.5 The earliest health insurance models were traditional fee-for-service plans (also known as indemnity insurance plans). They were quickly followed by numerous prepaid health plans, considered the precursors to today’s managed care insurance models including health maintenance organizations (HMO) and preferred provider organizations (PPO).

The first instance of managed care insurance came about in 1917 in Tacoma, Washington when the Western Clinic began providing the lumber industry with prepaid physician services.6 In 1929, Dr. Justin Ford Kimball was instrumental in establishing the Blue Cross brand by introduced a prepaid hospitalization plan for local teachers sponsored by Baylor Hospital in Texas.6 The Blue Shield program was adopted in 1939 for participating prepaid physician plans.6

One of the pioneers responsible for making quality healthcare and insurance available to Americans was industrialist Henry J. Kaiser. In 1938, Kaiser recruited Dr. Garfield to help create prepaid clinic and hospital care for his Grand Coulee Dam project.6 In 1942, Kaiser and Dr. Garfield established a prepaid healthcare program for the employees of Kaiser shipyards and Kaiser steel mills that helped popularize health maintenance organizations.7 Kaiser Permanente remains prominent in the HMO insurance market to this day.3

By 1949, there were 81 Blue Cross hospital plans and 44 Blue Shield medical insurance plans, covering a total of 24 million Americans.6 Blue Cross companies and Blue Shield insurance plans covered 52 million and 40 million Americans respectively by 1959.6 After merging, Blue Cross Blue Shield collectively covered 87.4 million Americans by 1979.6 So Blue Cross Blue Shield, one of today’s top insurance providers, was very influential in the early managed care insurance movement.

Benefits grew and expanded in the 1950s as traditional fee-for-service health insurance plans flourished and coverage expanded to include other expenses, such as vision care.3 Most insured individuals were covered by either Blue Cross Blue Shield or by private commercial insurance companies at this time.3 Despite this progress, the 1960s and 1970s brought about a tumultuous time for the health insurance industry.

The term “Health Maintenance Organization” was coined in 1970 by Paul Ellwood, who was instrumental in promoting the Health Maintenance Organization (HMO) Act.6 HMO insurance came about as the insurance marketplace adjusted to employers’ and individual consumers’ concerns with the high premiums associated with traditional indemnity insurance.

After debating various bills for a national health insurance plan in the 1960s and 1970s, Congress passed the Health Maintenance Organization Act in 1973.6 This Act provided grants to employers who implemented HMO insurance – considered cost-effective alternatives to private doctors and hospitals – and effectively encouraged employers to provide their employees with health benefits.

At first, HMO insurance was perceived as providing better value than traditional indemnity insurance, due to lower premiums. Yet employers and individual consumers quickly began to backlash against the strict restrictions, poor service and other limitations associated with HMO insurance. The first annual decline in national HMO enrollment was seen in 2000.6 As a result of employers’ and consumers’ concerns with restrictions and service, modern day PPO insurance began to surface in the 1980s as an alternative to HMO insurance. The choices and service provided by PPO insurance was very well received, despite having higher premiums. By 2006, the national HMO enrollment grew to 67.7 million and PPO enrollment grew to 108 million.6

During the 1970s, those responsible for paying for healthcare – consumers, employers, and taxpayers – saw that the associated costs were becoming unmanageable.3 This concern with the cost of benefits was not exclusive to the health insurance industry and it quickly crossed over into other markets, including the dental benefits industry.

The dental benefits industry in the U.S. began as a by-product of the health insurance industry. Supposedly, the nation’s first dental insurance plan was instituted in 1883 by the Denver and Rio Grande Western Railway’s Hospital Association.8 Introduced in 1959 on a group basis, traditional dental insurance plans encouraged preventive care and reimbursed the insured for the cost of dental services.5

Dental HMO insurance quickly became more popular than its more expensive counterpart, traditional dental indemnity insurance. Dental PPO insurance provided consumers with better service and fewer restrictions than dental HMO insurance, despite the higher premiums. Discount dental plans, an easy-to-use and cost-effective alternative to dental insurance, became a significant part of the industry during the mid-1990s.9 Discount dental plans provided consumers with the value they desired by offering access to affordable, quality dental care at a low price and with an emphasis on choice and service.

At first, the majority of people with dental benefits received them only through their employers. Despite this welcomed advancement, a large percentage of Americans still did not enjoy access to affordable dental care. Unfortunately, many employers did not offer dental benefits and individual dental insurance remained too cost-prohibitive to become a viable alternative. The dental benefits industry began to adjust and progress to fill the growing need for affordable dental benefits. The dental benefits industry began to experience a shift away from the high premiums of dental indemnity insurance as well as the poor service and strict limitations of dental HMO insurance, and toward the greater value, choice and service offered by dental PPO insurance and discount dental plans.

Thinking of Adding an Associate to Your Dental Practice? Be Prepared!

An old adage applies here – “If you fail to plan, you are planning to fail.” This is the time to set the course for success. Prior to the first interview, do your homework. Three simple but critical steps will help prepare you to discuss the structure of your association with confidence:

1. Complete a practice assessment.

Is your facility adequate for two dentists? Consider both short- and long-term demand for space, and be prepared to expand or move if space is inadequate.

Does your practice have the capacity or potential to meet the income expectations for an additional provider within a reasonable time?

Are effective management systems in place and running efficiently?

Is the practice overhead within a normal range?

Are you collecting at least 95 percent of production?

Is your entire staff open to change and completely committed to supporting an associate?

Is your appointment schedule completely booked for a sufficient period?

2. Quantify the financial aspects of an association.

Identify all fixed and variable costs related to adding an associate including staff, new equipment, instruments, laboratory, dental supplies, office supplies, expansion expense, legal, consulting, marketing, and associate compensation.

Calculate break-even numbers for the identified associate costs with and without owner profit.

Prepare short-, intermediate-, and long-term cash flow projections.

Have the practice appraised if a future buy-in or buy-out is anticipated.

3. Define the basic business points.

Relationship of the parties. Will the association be an employer-employee relationship or an independent con-tractor relationship?

Termination. Delineate causes for involuntary termination and notice period for voluntary termination.

Compensation. Compensation should be clearly defined. If compensation is based on a formula, it is typically a percentage of production or collections that may include a draft against future earning, or compensation may be set up as a base payment plus incentive bonuses. Be prepared to offer an illustration.

Exclusive service. It should be determined whether the associate will devote all professional time to the practice, and whether he or she will work full time or only be available for a limited number of days or hours.

Records. All patient files are typically owned by the practice and remain with the practice if an associate leaves, although access may be granted under specific circumstances. Identify any exceptions to the general ownership and access provisions.

Expenses. Outline who will be responsible for the cost of professional licenses, dues, continuing-education seminars, health insurance, malpractice insurance, benefit plans, dental and office supplies, laboratory expenses, and staff salaries.

Time off. How many days will be allowed for vacation, personal time, or attendance at continuing-education seminars. How much advance notice will be required for time off?

Covenants. Restrictive covenants, such as nondisclosure of confidential information and noncompete clauses (with reasonable time and geographic limitations), are typically included in associate agreements. Noncompete covenants may have an effective date different from the effective date of the agreement.

Future purchase agreements. Perhaps you are looking to build a relationship with the associate with a view toward the associate eventually acquiring an ownership interest. Consider an agreement to negotiate toward a possible agreement in the future with specific dates and performance requirements. Specify how the buy-out or buy-in price will be determined in the future and be prepared to offer a current practice appraisal and business points for a future purchase and partnership, if applicable.

Sedation Dental Care – What’s it All About?

Patients unfamiliar with sedation dentistry can find it confusing and wonder about safety. They often don’t understand how or if it is used in conjunction with “traditional” anesthetic approaches used in dentistry. One of the most significant changes in the field of dentistry is the availability of sedation dental care – providing the same levels of comfort that are routinely provided by doctors of general medicine and related fields of specialty. The ADA and regulatory state dental boards across the U.S. are facilitating this change in dentistry and helping to ensure that dentists who provide sedation dentistry do it safely. The questions and answers below are intended to help you understand both some of the history as well as a broader explanation of how dentistry is safely being made more comfortable than ever for patients.

When did dentists start using sedation?

Perhaps the better question is, “When did dentists start providing pharmacological pain management techniques?” Horace Wells, a Connecticut dentist, introduced the use of nitrous oxide in the 1840s. One of Wells’ students, William Morton, demonstrated the use of ether as anesthesia. They were progressive thought leaders in the field of pharmacological pain management for not only the field of dentistry, but also the field of medicine. Many, many decades have elapsed since then – long enough for the effects of many different types of anesthesia – both localized and general – to be very precisely understood. Different types of anesthesia are most appropriate for different types of treatment. The fields of dentistry and medicine at large now have an excellent understanding of the risks associated with all types of sedation/anesthesia.

What role does sedation play in providing comfort in dentistry?

There are actually two issues – anxiety and pain – that are often tightly intertwined when it comes to making patients comfortable during dental procedures. Dentists receive a tremendous amount of training that helps them understand this. They are taught about two techniques for managing both anxiety and pain – the psychological approach and the pharmacological approach.

Most patients have little or no awareness of dentists’ training in psychological anxiety/pain management, or that those techniques have been applied to them. At best, they will think that the expert in the psychological approach is nice, gentle, and caring – and that’s OK! Don’t worry, though – there’s nothing deviant about the approaches dentists use to make you more comfortable during your visit.

For many decades, the pharmacological approach used by general dentists has been centered on the administration of local anesthesia (often with needles) to numb the affected area. With new, expert training programs, dentists are starting to use broader approaches that nicely complement the use of localized (more traditional) pharmacological approaches. Patients are put in a relaxed state so they don’t mind having necessary or elective dental procedures performed. Sometimes this is needed to manage patient anxiety – including a phobia about the use of needles. Once the sedation is in use, the patient may become unaware of or uncaring about the use of a needle that is used to provide localized suppression of pain. So, expert pharmacological management of pain and anxiety involves the use of the right mix of sedation and local anesthesia – as appropriate for the procedure being performed.

Why don’t dentists use general anesthesia?

While general anesthesia (where the patient is rendered unconscious) is used by dentists in some fields of dental specialty (most notably oral surgeons), it carries with it a significantly greater patient risk. It also requires very specialized training. For this reason, general anesthesia is generally administered only in a hospital setting where an artificial airway can be maintained to facilitate an instant resuscitation attempt. Needless to say, the hospital setting (or equivalent investment in facility, equipment, and specialized staff members) makes it a costly option. Oral surgeons usually advise that lesser sedation techniques be used in conjunction with local anesthesia whenever practical to avoid the additional patient risk. Insurance coverage (or lack thereof) for using general anesthesia for lesser procedures is another consideration.

Are there different levels of sedation dental care?

The American Dental Association (ADA) has a general policy that discusses minimal, moderate, and deep sedation. The policy is fully described in Guidelines for the Use of Sedation and General Anesthesia by Dentists. However, it is important to realize that the ADA does not formally regulate the provision of dental care in the U.S.; the regulatory responsibility lies with each individual state.

The regulatory requirements on dentists who provide sedation dental care can vary from state to state. Some states provide requirements that define more granular levels of sedation dental care – each with an appropriate corresponding level of training and/or experience – for both the dentist and staff members. For example, the moderate level might be split into orally administered moderate sedation and intravenous moderate sedation. The latter carries with it greater patient risk. Some states are considering or have enacted new regulations for sedation dental care because of the increased public demand for sedation dentistry.

Aren’t all general dentists trained to perform sedation dentistry?

The state-administered regulations for sedation dentistry (when they exist) may be in addition to whatever state guidelines currently exist for the administration of “traditional” localized forms of anesthesia. (The use of local anesthesia may often be regulated by states by certifying that the practitioner holds a Doctor of Dental Surgery (DDS) from an accredited dental school, and may include some additional continuing education requirements.) The ADA is supportive of dentists who are appropriately trained in the use of minimal, moderate, and deep sedation. And of course, the ADA recommends that no dentist use drugs or techniques for which they have not been appropriately trained.

Across the U.S., there is training on sedation dental care available through pre-doctoral, post-graduate, graduate, and continuing education programs which may be appropriate for some levels of sedation. Again, each state defines what training and certification procedures are appropriate for dentists practicing in the state – including sedation dentistry. The ADA indicates that deep sedation and general anesthesia training are beyond the scope of either pre-doctoral or continuing education training programs. Check with the state dental board for your state for additional information about sedation dentistry regulations that apply to you and your dentist.

Delta Dental Insurance is the Largest but are They the Best?

Delta Dental Plans Association is the nation’s largest dental managed care insurance company. It boasts over 47 million people in over 81,000 employer, veterans and retiree groups across the nation. Their provider network is contracted with 118,000 dental practitioners in all fifty states and Puerto Rico.

These numbers are rather impressive considering dental coverage has significantly lagged behind health maintenance organizations (HMO) in popularity for years. It is believed that the reason for this slow growth is that providers are asked to take significant discounts to be a part of the dental provider network.

Research has shown that patients’ relationships with their dentists seem to outweigh out-of-pocket cost in importance to the end consumer. Understanding this, the dentists may not feel a need to join a managed care plan, and accept discounted reimbursement, when they know that the patients they have built relationships with will likely continue to visit their offices for dental services regardless of network membership. Accordingly, there has not been the demand for these insurance plans from employer groups because the employees and their dependents may not want to join a plan in which their dentist is not a contracted provider. For this reason, employers may choose to offer traditional dental benefits to employees, that bear little, or no, significant cost to the employer.

Internet research showed only a few complaints about Delta Dental Plans. Among the complaints posted on an insurance consumer website noted that there seemed to be problems with the timeliness and accuracy of documents shuffled between the insurance company, the providers and the members. There was also a complaint about being able to reach a live customer service representative and having problem issues addressed in a timely manner. One of the complaints found – and this probably has less to do with Delta than with the providers – that there were not enough providers in the area that accept Delta insurance. (Incidentally, this is normally just a consequence of rapid growth. Most insurance plans are responsive to member requests to add providers) Finally, there was a complaint about having difficulty in understanding and gaining information about the schedule of benefits for the member’s specific plan.

However, finding only a few complaints among 47 million members leads one to conclude that the vast majority of members are satisfied with the Delta Dental Plans. The complaints forum on this consumer website are typical of those one would find regarding any insurance plan, so it is hard to verify that Delta is doing a poorer job in these areas than their competitors. Certainly the continued growth of the company is a clear indication that there is a demand for their product, and that customers are satisfied with the job they are doing. This, in and of itself, would lead one to conclude that in this case, the biggest probably is the best.

How to Collect 100% of the Dollars Your Dental Practice Produces

Now more than ever businesses everywhere are struggling to stay afloat, let alone show a profit. Dentistry is no exception. In fact, statistics have shown that dentists are among the last to be paid by consumers, right above the veterinarian.

A study by the Independent Business Association indicates that the chances of getting paid by a debtor decrease from 95% at day 1, to less than 5% at day 270. This is just one more reason for having well orchestrated financial guidelines in place as well as making sure employees are exceptionally well trained and empowered to motivate patients to pay on time.

Sometimes this can be very challenging, and unless your staff is fully prepared and possess excellent verbal skills the results may not always be win-win. Furthermore, when things aren’t handled properly, you may not only lose dollars, but patients and their future referrals to your practice as well.

Basically there are good reasons why patients refuse to pay or falter on their financial commitments. Listed below are what we will refer to as the “dirty dozen” pitfalls to a healthy accounts receivable.

  • Hiring the wrong people for key positions
  • Lack of proper training of staff
  • Lack of structured financial guidelines
  • Lack of support of Doctor and Team to uphold practice financial policy
  • Patient doesn’t accept responsibility for fees, but thinks their insurance company is responsible to pay.
  • Patient not quoted properly prior to treatment
  • Insurance benefits not properly confirmed prior to rendering care
  • Insurance benefits not accurately estimated
  • No valid financial agreement in place prior to treatment being performed
  • Insurance not properly submitted
  • Ineffective claims reconciliation and follow up
  • Ill timed notification to patient when insurance challenges do arise

There really is no magic involved, just pure and simple common sense. In addition to learning how to establish an effective accounts receivable management system, learn the proper, legal protocol for handling any balances currently showing as past due in the practice receivables files.