Further Thoughts on James Dwyer and Dental Insurance

Let’s start with what we know when it comes to dental insurance and patients.

First, the dental patient doesn’t really care if the dentist gets paid fairly or makes a different living. That’s the dentist’s problem, not theirs.

Second, dental insurance companies are out to make a profit.  And thus they benefit from under-utilization. Paying more for a treatment code, or for more patients being treated, doesn’t work. Neither does encouraging people to take care of their teeth.  All this either lowers profits or requires increased premiums. So what would seem to be the point of dental coverage––to get people to see a dentist and get treated––contradicts the business model it is managed through. But even when there is less utilization, these companies generally don’t lower premiums, but rather increase them every year.  That is, unless they do what Washington Dental Service did, which was cut payments to dentists so they could lower their premiums to businesses. These institutions are tax-exempt, but make no mistake, they are motivated by profit.  So dentists get to absorb the shock.

Third, for as long as I’ve worked in dentistry (since 1986), up until five years ago, the general trend, indeed the goal, was for dentists to gradually move their practices to full-fee-for-service, and not be a provider for any dental plan.  This came to a screeching halt in 2007, and has reversed itself continuously.  More and more practices are adding plans, for the simple reason that people are not spending money on their dental care like they used to.  The days when every month one or two patients would borrow against their home to do a full set of veneers or extensive implants are over.  Practices have had to adapt, accepting more plans, and in so doing have handed more power to the dental insurance companies.  And with this you get the arrogance exemplified in CEO James Dwyer’s remarks (see my previous blog on those, as well as Gary Takac’s call for Dwyer’s resignation.)

So the simple question is, do we want to go the way of general medicine, which is to say, let insurance companies call the tune?  For physicians, it is the insurance companies who determine the treatment, the fees and even the allowed medications.  If the doctor or the patient disagrees with that determination, then the patient has to pay out of his own pocket. And because 95% of physicians’ income comes from insurance, the average income for general physicians is now lower than that of general dentists. What’s more,  it is virtually impossible for a general physician to double or triple his income from the average level, while it is quite possible for most dentists to do so.  And everyone expects physicians’ income to continue to decline.  How’s that going to play out?

I think this problem needs attention right now, before control is fully surrendered to insurance companies, or before the government steps in to make sure that everyone in America has some sort of dental care, regardless of whether it provides a living income for a dentist who has a facility, leases, loans and employees to reckon with on a monthly basis.

And, as other people in this blog have mentioned, it’s not financially bearable for a dentist to drop the insurance provider when that company tries to cut their payments.  But in my mind that’s what your state dental society is for.  When Delta or any other company decides it’s time to do an across-the-board fee cut, then there ought to be an immediate call by the society for their entire constituency to drop that carrier the next month.  They don’t need everyone to comply; if 40% do, then the insurance company gets hit right where they care most–the profit end of their revenue.  It should be a swift, resounding and unequivocal response.  And my guess is after one or two states do it, and the results are proven, then an even greater number of dentists will join in the protest.  And the insurance companies will fall back into line.

Along with this response by the societies, there should also be a unified message sent out to each dentist’s patients as to why this is happening.  They should let all their patients know that the insurance company, in an effort to increase their profits, is paying less for the same services, and thus limiting care to the patients.  (In Washington, it was the insurance company who seized the opportunity, and communicated with the patients when a dentist stopped being a provider because of the fee cut, and recommended the patient move to a different dentist who accepted the plan, and even provided a list.  Outrageous behavior, unless of course you’re in business to make money, not provide dental care.)

This response by the society is only step one.  The next step is to take a hard look at how dental insurance is provided.  We live in a world where data can move instantaneously and simply between entities. Why do we even need a middle man to provide discounts on some dental services for a business’s employees?  In three months I could get five 20-year-olds to write a program that lets any business choose from a menu of services, calculate the premium, allow the employees to choose a dentist and get care, and subsequently the dental practice can file the claim and have the money in their account the next day.

Certainly there are regulations to follow, but does an enormous profit for an intermediary organization benefit anyone but that organization?  I don’t think so.  I say let them all work somewhere else where they don’t have a negative impact on the overall health of Americans.

One last point.  Dentistry in many ways is different from general medicine. There are millions of people in this country who will never be able to get high-end dentistry.  For example, we all know that implants are the ideal solution to missing teeth.  But this quite simply will never be insured, because eventually everyone will need them.  A quadruple bypass surgery is incredibly expensive, but not everyone is going to need one, so the cost gets spread over a thousand other people.  But as the population continues to live longer, most people are likely to lose some or most of their teeth. Either they can afford implants or they can wear dentures.  But it is not reasonable to imagine an insurance plan that provides virtually everyone with implants.  We need a wiser, more balanced solution that does not emulate health insurance.

Sometimes you can’t just modify business models.  They become antiquated, or fail to serve their original purpose, diverging from their mission to one that is more self-serving, (like Congress!) and we need to abandon them and start over.  Why not create a brilliant, modern solution that helps the greatest number of people, and is the envy of the entire world?

I’m open to your thoughts, and I will do my damnedest to get them in front of the right people.


Post Script: I have been told that the FTC views any such action by dental societies to be illegal boycotting, and precedent has been set.  Sounds like the wrong lobbyists got to the right ears (and pockets) to me, but if that really is the case, then dental societies are virtually powerless in this situation, until that precedent is challenged.  The Washington State Dental Association spent many hours and legal dollars trying to deal with this within the parameters of the FTC ruling, so other avenues may be more appropriate.  I’m not sure that the FTC could have much say about dentists using Twitter to say that they are personally dropping the insurance plan.  I’m not fond of laws or precedents that protect corporations to the detriment of individual citizens, and I can’t accept that boycotting of a company by anyone or any group can be considered illegal.  But I’m no lawyer, so the pathway through this is not clear to me.

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14 thoughts on “Further Thoughts on James Dwyer and Dental Insurance

    • Thanks, Mike. I’m really trying to get some momentum on the discussion, because I think there’s an answer that serves dentists and patients both. I’m an optimist!

  1. The dental society making a move like you propose is considered a violation of anti-trust laws and price fixing — why the insurance companies can directly compare accepted and billed fees between the companies and not be called on the same law violation is beyond comprehension.

    However, something done privately by concerned citizens, who also happen to be dentists, is not a violation. Problem is, it is hard to get that kind of thing started.

  2. Yeah… first, it’s against the law for dental associations or even a coffee-klatch of dentists to discuss (collude) dropping a plan en masse.

    Secondly, even if it wasn’t illegal (in a big way), the spinally-deficient dental associations don’t even have the testicular fortitude to arrive at a consensus on whether Jeffrey Dahmer was a bad man. Seriously… they don’t. And, that’s why membership is declining precipitously.

    The Association has no interest in supporting the profession. It is a political organization that licks the government hands in hopes of gaining favor in a sort of Stockholm Syndrome fashion.

    • I’d like to see how that law reads, Mike. That sort of limitation itself seems unconstitutional, and if someone, like an insurance company, got it passed, then step one is to challenge it.

      • I agree on the constitutionality of it, Fred. I thought we were a free people in a free market. Yet, there are the anti-trust laws to which we are subject. Ironically, the inscos are exempt from those laws. It SHOULD be challenged. But, we can’t count on our “association” to stand up for us.

        Ultimately, on a “collective” basis, we have to individually make the “bold” decision to drop out of the plans. I started my practice that way (never joining the plans) and vowed to keep it that way. So far, so good. It ain’t easy. But, I am the “master of my domain.” 🙂 My success or failure are on my shoulders. I am beholden to nobody (except my own patients).

        But getting dentists to do that on a large scale is surely a tall order.


  3. Awesome post, Fred! Really good stuff.

    I think that Cletus is right. However, if this stuff spreads, it will be a lot easier to convince people to become nonpar.

  4. Bob, you are right. the McCarran-Ferguson Act of 1945 is out. However, even though the demise of the insurer-friendly law threatens the unfair collaborative habits of National Association of Dental Plans (NADP) members, that doesn’t mean that the FTC will suddenly permit officials of the not-for-profit ADA to sponsor boycotts against Delta Dental, and another sleazy non-profit I personally despise, BCBS of Texas.

    It’s well known that when ADA officials speak honestly about insurers’ unfairness to dentists, insurers often file complaints with the FTC. Even if unfounded, federal investigations are a strong disincentive for vetted ADA officials to exercise free speech. There are some rights dentists give up when they volunteer to serve.

    Here’s the good part: Now that the 66 year old M-F has finally died, anyone, including ADA officials, can file FTC complaints against NADP members. At least that’s something.

  5. I find this post extremely informative and an eye opener but part of its reality makes me sick to my stomach. I’ve been a member of the ASDA and the ADA since the freshman year of dental school. I make it a point to pay the voluntary contributions of the “American Dental Political Action Committee” and the “District of Columbia Dental Political Action Committee” every year; I think that goes to the ADA lobbying on Capitol, a mere 4 miles from me. I’ve been wondering though what difference that makes nowadays. I don’t feel I have enough mental stamina to take a lead on these things but I’d love to see someone do it.

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