A Dental Revolution
When the world has seen the computer, it makes sense for companies to stop selling typewriters. Being on the wrong side of transformational change is never a good idea – in business or in life. For dentists, it might be surprising to learn that the dental insurance industry is headed for a “typewriter” moment.
Why Past Reforms Fell Short
Over the past several decades, there have been many industry-led attempts to modernize dental benefits. Three aspects of these efforts strike us as unsustainable over time:
- Plan confusion – offering numerous plan designs that just tinker with minor costs in the system
- Zero-sum negotiating – the belief that underpaying dentists or providers reduces costs long-term
- Lack of dialogue – refusal of providers and the industry to share in “win-win” opportunities financially
The right way to reduce costs while sustainably improving quality of care in this industry is to work together with providers against a pervasive issue: costs that neither stakeholder group really wants to pay. All sides, from the patient to the employer to the industry to the provider, then have a shared pathway to ongoing health, wellness, and prosperity. Independent industry consultants can see the logic in this as a sustainable model.
Attacking Costs and Improving Quality: The Double-Edged Challenge
ProCare has correctly identified the key costs facing every party in the dental industry. It has built a model that allows all sides to work together to eliminate those costs in a rational fashion. It begins with the dental practice, which faces both business risk and financial pressure from overhead costs that can total 50% to 90% of billings. Next, it moves to the insurance industry, which ends up translating that overhead into high per-claim or per-procedure costs and then adding to them with expensive, inefficient adjudications and cost controls. (Adjudication is the process by which an insurance carrier or third-party administrator decides whether to accept all or part of a dental claim.) Tack on reserves for fully-insured plans, distribution, and regulatory expenses, and it is not hard to see how the situation reached its current point.
By creating a system of rational advances and discounts, which eliminates the dentists’ cost of operation and pays them the full fees they set, ProCare is targeting the dentist and patient interested in quality of care. By eliminating adjudication, both the patient experience and cost of running a dental plan improve dramatically. Finally, by measuring quality of care explicitly, everyone in the system is assured that the shared gains from streamlined costs are now going into quality of care, not just enhancing profits for one side of the industry or the other.
The ProCare system attacks costs and business risks nobody wants and eliminates them in a win-win fashion. Even more valuable is the idea that the gains are being reinvested in better coverage, lower patient costs, measurement of quality, and an overall desire to properly pay everyone who generates value.
