The field of dental care is where medical care was 40-50 years ago, as there are still thousands of dollars in price differences for the same procedure, and no standard practices, experts say.

The lack of transparency and cost variations lead to Americans skipping their recommended biannual trips to the dentist, which in return leads to increased health cost costs and lost productivity, according to industry experts.

According to data from the National Association of Dental Plans provided by Change Healthcare Corp., 57% of Americans have private dental insurance - while 85% have medical insurance.

With so few dental plans, insurance companies can't set rates, just as in the old days of medical care, says Nadereh Pourat, director of research at the UCLA Center for Health Policy Research. "When you don't have a lot of involvement with insurance [companies] scrutiny . . . variations in fees exist.

"In the old days in medical, you had usual customary and reasonable charges, so insurance companies [would] say this is a reasonable amount and this is what other doctors in the area charge," she adds.

Medical care eventually moved away from the model, Pourat says, but many dental plans still pay based on the reasonable amount calculation.

 

Cost difference

With no standard practices for dental care, the cost differences can be extreme. Research by Brentwood, Tenn.-based Change Healthcare found that in the same area the cost for a preventive dental exam ranged by nearly $150 - and there was a more than $2,000 difference for having wisdom teeth removed (see chart).

The variation is a function of a number of factors, says Doug Ghertner, the company's president. Among them are since many dental practices are solo operations, the offices hold leverage and providers may take cuts on less frequently performed services.

"If you're a provider that does a ton of fillings and very little root canals, you're going to be more willing to take a deeper reimbursement [cut] on root canals as long as [you can] preserve a higher reimbursement on the procedures you're doing more frequently," Ghertner, who was previously senior vice president of client solutions at CVS Caremark, reports.

Pourat adds that there are multiple treatments for the same problem. "With multiple treatments you can't really say, 'This is right or this is wrong,'" she says.

"Another example is a filling is not [just] a filling," she adds, since there are various substances that can be used in them.

The insurance companies agree. Dr. Rick Goren, second vice president and national dental director of group dental at Guardian, says that there is a variation from dentist to dentist and even within a given practice.

The same diagnosis, Goren says, can lead to multiple treatment plans being suggested, all of which are acceptable methods of care. He adds that since many dentists are in solo practice, the personality of the dentist will likely play a "major role in what type of dentistry and [the] perception of value."

Solo practices also more often mean less peer pressure to standardize dental procedures, Pourat adds.

 

Consumers fail to shop around

Consumers also fail to shop around for dental services, says Pourat, who is also a professor at the UCLA School of Public Health. "They don't think of dental [care] as a commodity like a TV, a car, a fridge. You don't think of it in those terms."

Many people only find out what the cost of care is during the procedure. While nearly $45 billion is spent annually on dental care, one will often "find out what something will cost you when you are sitting in [the dentist's] chair - and that's not the best place to be doing that," says Jake Winebaum, founder and chief executive of Santa Monica, Calif.-based Brighter.com.

Part of the problem may be not the lack of consumers with insurance, but the number of dentists who don't accept insurance. Goren estimates that while it is unusual to find a physician who doesn't accept insurance, 25% of dentists don't.

 

Lack of insurance means more problems

Nearly half of Americans lack dental insurance and in 2010 dental premiums increased at a higher rate than medical insurance premiums, according to Melbourne, Australia-based Empirica Research.

Without insurance, Americans will not go to the dentist unless they are in pain. According to an Empirica survey of 1,000 adults in May, 74% of Americans without dental insurance only go to the dentist when they believe there is a problem and 26% go for preventive care. Among those with dental insurance, 32% wait until there is something wrong and 68% go for preventive care.

Of those without insurance, they attributed two main factors for failing to go to the dentist: Cost (77%) and not knowing what the cost would be (73%).

While many people tend to ignore dental care, they do not realize "oral health is a gateway to other problems," explains David Neal, a director at Empirica, who works in the Los Angeles area. "People don't have a good grasp on the negative health effects of [failing to maintain] good oral health."

Those problems lead to an estimated 164 million hours of missed work annually, according to a legislator policy brief from The Council of State Governments' Healthy States Initiative. The report further found that nearly 25% of Americans aged 20-64 have untreated cavities, which can limit what a person eats, leading to malnourishment and weight loss.

 

Future outlook

As long as dental insurance remains an optional benefit, not everybody is going to pay for it, Pourat says. She suggests looking closer at what physicians are doing to find a way of 'standardizing' the care. "There is a lot of work to be done in that area," she says.

Some companies have started trying to find a solution. Change Healthcare looks at what others in the same area are paying and proactively reaches out to its plan members, Ghertner says. "When we push savings opportunity to someone, we see 48% of those individuals who have a saving opportunity open that email text and come into our portal and do something about it."

And Wienbaum, an Internet entrepreneur, says Brighter.com has recently expanded to small businesses. His site negotiates rates with dentists nationwide and then offers set prices to consumers, who pay an annual fee.

"Typically the price we offer is $49 per employee, per year," he says, and an employer can offer that price to their employee or pay it. While it is not insurance, it costs an employer less than what a full-on dental insurance policy would, which Winebaum estimates at a few hundred dollars a year.

"It's part of the solution," he concludes. "The dental care system for Americans is broken."

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access