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Giving consumers more choice in dental cover


The face of dental benefits is changing as market trends spur evolution in employer-sponsored dental plans.

The employer-sponsored model has been dominant for more than 50 years and some view current market influences, such as the rising cost of medical care, with alarm because they see the time-honored employer benefit delivery channel as being in jeopardy. Others see the change as being more benign, just another evolutionary modification. The range of opinions on the future of employer-sponsored dental benefits is widely varied. Yet, most experts agree that current market forces will bring about a fundamental shift in how benefits are viewed by employers and employees.

Tax incentives

From an employer's perspective, dental benefits have been an important part of the overall benefits and compensation mix for decades. According to LIMRA International Inc., which provides research and consulting services to insurers, dental benefits are second only to medical and paid time off in terms of employee popularity. The tax exemption for health care expenditures also doesn't hurt--on average, employers essentially receive a 40% government subsidy for every benefit dollar spent on the cost of providing health care coverage.

For employees, dental coverage has made care more affordable. Dental plans often cover preventive care entirely, and soften the out-of-pocket financial blow when more serious care is required. When offered through work, the economies of scale for group purchasers help keep premiums more reasonable for employees than if they had to shop for plans themselves. The workplace is also a natural risk pool, helping to insulate individual employees from experience-related uncertainty as the costs of care increase over time.

For as long as these elements remain in place, there will continue to be a place for employer-sponsored dental benefits.

While some things are likely to stay the same, there are big changes on the horizon. The prevailing wisdom is that the entire health care industry is moving toward increased consumerism.

Providing choice

As consumers begin assuming a greater responsibility for understanding and financing care, proponents of consumer-driven health care believe that patients will make smarter decisions about utilization, helping to reduce overall costs.

From an insider's perspective, this movement toward consumerism is good news for dental benefits. You could almost say the industry is ahead of the game since dental benefits already incorporate a number of consumer-based incentives.

Because most dental conditions are largely preventable, it makes sense to try to motivate patients to seek preventive care. Besides making good health sense, preventive care also makes financial sense. The Institute of Medicine estimates that for every $1 spent on preventive dental care, restorative treatment expenses are reduced by about $4.

Most dental plans are designed to fund preventive services at 100%, giving consumers a strong incentive to make smart decisions regarding utilization. At the same time, subscribers often are required to assume responsibility for significant out-of-pocket expenses for restorative services. With a greater stake in the process then, many patients these days are willing to take time to learn about different treatment options and their associated costs.

Evolution in progress

All of this is not to say that the dental benefits industry is already equipped to meet all the needs of a consumer-driven marketplace. Instead, dental benefits carriers must customize their offerings to create more choices for consumers.

One of the biggest opportunities is evidence-based plan design. Using the latest scientific research and patient treatment data from dental claim databases, some carriers are incorporating new plan designs that offer options that more closely address employees' specific oral health needs.

For example, the relationship between diabetes and oral health, specifically periodontal disease, is well-accepted in the medical and dental communities.

Recognizing that relationship, providing added cleanings and periodontal maintenance visits to patients with diabetes is one way of lowering their dental treatment costs while improving their overall health.

Similar plan designs exist for topical sealants for children's teeth, increased dental visits for pregnant women and a number of other options.

For such plan design changes to be effective, insurers also must provide educational tools for consumers and providers. Consumers need to understand their risks for certain dental diseases and how to mitigate or control those risks. This knowledge will help them use their dental benefits more wisely and, ideally, encourage better oral health outcomes. Dentists also need to be provided with information that helps them make appropriate decisions regarding patient care, supported by the latest data and scientific research.

Individualized care, coupled with education, will help employees make smart choices about their own oral health and dental expenditures.

Agility required

The employer-sponsored model in dental benefits will survive this latest move toward increased consumerism.

The market outlook points to changing products, enhanced options and new ways to present dental benefits to consumers so they better understand their choices.

For dental carriers to remain competitive, they must anticipate these changes and continue finding ways to improve access to care for consumers.