Can Dental Benefits Have Everyone Smiling?

Yes, if they're built on a solid understanding of supply, demand, responsibility and consequences.

By Alan Vogel, DMD, MPH

Dental benefits are part of most employers benefit packages — especially among larger employers. MetLife's Employee Benefits Trend Study for 2002 found that 77 percent of surveyed employers offered dental benefits. The National Association of Dental Plans calculates that 61 percent of the U.S. population has some form of dental benefits and projects that the number will reach 65 percent by 2005.

While dental expenditures amount to "only" 4.5 percent of total health care expenditures, the tab came to $70.1 billion in 2002 and is projected to hit $118.3 billion by 2012, according to the most recent projection of national health expenditures by the Centers for Medicare and Medicaid Services.

From an employer's point of view, is the money well spent? Consider that dental problems have an impact on lost work time and other medical problems. The Surgeon General's 2000 report on oral health in America calculated that over 164 million work hours and 51 million school hours are lost each year due to dental problems. Other research is revealing a relationship between dental diseases and medical diseases that cause morbidity, mortality and lost work time. Improving employees' — and their families' — oral health may, therefore, increase productivity.

From a different angle, research conducted by Taylor Nelson/Sofres Intersearch last year underscored the importance employees place on dental benefits. The survey found that 78 percent of employees believe dental benefits to be "very important" or "somewhat important" when considering taking a new job.

Supply and demand factors

The Surgeon General's report found that individuals with dental benefits are nearly one and a half times more likely to seek dental care than those without. On the other hand, demographics are as great a force in dental care as they are in all of health care: Americans are living longer and keeping their natural teeth longer.

Across all generations, there is greater demand for preventive and cosmetic services as new technologies and techniques — bonding has largely replaced metal fillings, for instance — and Americans have become more educated about their teeth. The definition of oral health has evolved from simply feeling good to also looking good — evidenced by the rise in the amount of cosmetic services such as teeth whitening. Early detection and treatment of oral health problems — when intervention is minimized — are vital to improving and sustaining overall oral health, thus keeping direct dental care costs down in the long-term.

At the same time that demand is expanding, supply is shrinking. The American Dental Association points out the number of dental school graduates has been declining since 1985 and projects that by 2020 the number of dentists per 100,000 people will have dropped 7 percent to fewer than 51 compared with the current 54.4. Additionally, "available chair hours" are decreasing because the average practitioner is over 50, and dentists tend to work shorter hours as they get older. This supply and demand equation favors the dentist and is requiring dental benefits carriers and administrators to be innovative in attracting and retaining practitioners in their networks.

Therefore, it's important for employers to understand how the dental network builds and maintains its relationships with network providers. The number of providers in the network is only a starting point. Employers should also ask:

• Is the number growing?

• Are there strategies for growing the network in rural, suburban and urban areas?

• What is the provider retention rate?

The last point is an important indicator of network stability and the increased likelihood that an employee's favorite dentist will choose to remain in the plan.

Managing dental expenditures

Compared with the long string of double digit increases for health care overall, the 5 to 7 percent yearly increases for dental benefit costs are certainly less intimidating. Still, they are a significant expense and one that deserves careful management. The tactical options will be familiar to any employer who's been trying to rein in health care costs. You can try any combination of:

• Increasing employees' deductibles.

• Lowering the level of coverage.

• Reallocating services between different categories within the plan.

This last option is most effective for services that are high cost and low volume, such as removal of impacted wisdom teeth.

• Adjusting Deductibles: Suppose an employer's current dental plan has deductibles of $25 for an individual and $75 for a family per policy year for basic (oral surgery, fillings, endodontics, periodontics) and major (bridges, dentures, crowns) dental services. If these deductibles are increased to $50 and $150, respectively, an employer may potentially save between two and four percent on dental benefit costs.

• Refining Coverage Levels: Consider a dental plan that pays 100 percent of preventive services, 80 percent of basic restorative services and 50 percent of major prosthodontics. By changing coverage to 75 percent on basic services while maintaining the same rates for the other areas, the employer may potentially save between three and four percent on its dental benefits costs. Additional savings can be realized if the employer implements different coverage rates for the use of in-network versus out-of-network providers.

The ultimate goal for any dental plan should be to cover services that help reduce the incidence of disease and promote better oral health, and simply shifting costs to employees could well backfire.

Employers that understand the cost drivers in dental care are better able to offer their employees appropriately designed plans that support cost effective care. Equally important to cost effectiveness, however, is equipping employees to take responsibility for maintaining their oral health and become astute consumers of professional care when it is needed.

Alan Vogel is vice president and national dental director for MetLife, New York. He holds his DMD from the University of Pittsburgh School of Dental Medicine and his MPH from John Hopkins School of Public Health.

More Business & Health Articles About This Topic:

Dental Coverage Trends (March 2000)

Resources:

MetLifehttp://www.metlife.com

National Association of Dental Planshttp://www.nadp.org

American Dental Associationhttp://www.ada.org

Alan Vogel. Can Dental Benefits Have Everyone Smiling?

Business and Health

Nov. 7, 2003;21.