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This is the first of several reports that will address issues affecting dentistry today or in the future.
The Health Insurance Marketplace: After Managed Care
By Dr. Albert H. Guay
Managed care appears to have run its course and many of its features have been found unacceptable by providers and patients. It no longer can provide adequate relief from escalating health care costs for employers.
Newest Trend
The patient as a full partner in making decisions related to their health is the newest trend. The insurance industry claims that this empowerment of patients and their sharing of the stewardship over their own health will lead to better health care at more reasonable costs. Patients are being required to pay a greater share of health care costs and, in some instances, to select which health care services will be paid for by their employers. Limits are placed on the total amount of benefits employees may choose from the "cafeteria" of benefits offered by employers.
Elasticity
How will this cost containment strategy affect dentistry? Though the exact effect is difficult to predict and quantify, the general effect is clear and predictable. To understand the predicted effect, it is necessary to explain the term "elasticity." Elasticity describes the responsiveness of one economic variable in a system to changes in some other variable. In this instance, the change in demand for dental care that occurs with changes in the price (cost) patients directly pay for that care-the price elasticity of demand for dental care. As the cost of dental care that patients have to pay directly increases, the demand for dental care decreases.
It is generally believed that individuals will be certain that their hospital-medical- surgical costs are covered before their dental costs are considered. This shifting of resources from dental care to general health care when required will also have a dampening effect on the demand for dental care. Increased patient out-of-pocket costs for healthcare will exert downward pressure on the demand for dental services from these sources:
- Increased cost sharing for individuals with dental benefit plans
- Reduced financial resources for dental care due to increased cost-sharing
required of patients by their hospital-medical-surgical health plans.
- Non-selection of dental benefit plans by employees who are given limited selection of employee benefits (cafeteria plans)
- Employers discontinuing dental benefit plans.
- What can the profession do to reduce the impact on dental practices of this change in the health insurance marketplace?
The ADA suggests beginning to address this situation in the following ways:
1. Educate your patients on the need for continuing dental care
The ADA has several patient-education brochures available for distribution.
These include:
- Healthy Mouth, Healthy Body
which covers the systemic implications of periodontal disease
- Why Doesn't My Insurance Pay for This?
- and others under the Patient Education tab of the ADA Catalog
Click here to visit the ADA Catalog now.
2. Develop an in-office payment plan, if practical.
The ADA Business Enterprises, Inc., CareCredit product provides a patient financing mechanism and Paymentech provides credit and debit card processing.
Read about ADA Member Advantage options now.
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