Dental

How to Redistribute Scarce Dollars While
by Michael Schwartz

It is more important than ever to maximize the return-on-investment of benefits. Employee retention is still a top benefit objective, but it is balanced by the need to control costs. This issue is exacerbated by the current economy, which is exerting severe pressure on employers. Rethinking plan design can redistribute dollars to increase plan value and patient satisfaction. If a current or prospective client has been maintaining the same plan features for several years, there is no time like the present to suggest a review.

Since the majority of employers in California offer some level of dental coverage, you may already be fielding questions about how current and prospective clients can take a fresh look at this employee benefit. There are several areas you may want to address. Four are outlined below:

1. Rethink the Plan Design

Dental benefit plan designs have generally been slow to evolve. Many employers are offering plans that do not reflect current research or industry trends. Many employers have not reviewed their dental plan to make sure it reflects current concepts of dental care. A plan design that is not developed in accordance with evidence-based research or marketplace trends, with regard to treating oral disease, may actually contribute to unnecessary costs and even contribute to member dissatisfaction.

A dental plan that integrates current clinical research, consumer-value approaches, and marketplace trends can be more cost-effective and more clinically appropriate to meet consumer needs. It simply distributes benefit dollars more appropriately and adds value. This is accomplished in a number of ways. One is by placing higher coverage percentages for services that prevent the initiation and progression of dental disease and covering more elective services (not treating disease) at lower levels. The result of this approach and some other design approaches is a plan that focuses on value and member satisfaction and encourages participants to maintain good oral health. In addition, these changes usually lower dental benefit costs for employers and employees.

For example, a typical dental benefit plan may cover the removal of wisdom teeth as a “Type B” service at 80%. Historically, a large percentage of asymptomatic (not causing a dental problem) wisdom teeth were removed. But new research promotes the idea that wisdom teeth should only be removed if they are causing a problem or have pathology around them. You can see how this procedure adds expense under old plan ideas while adding only questionable value. Therefore, reallocating this type of procedure from “Type B” (80%) to “Type C” (50%) would reduce plan costs without compromising the plan’s value.

In addition to re-allocating certain procedures, plan design changes should take into account the frequency or age limitations on certain procedures. The following are some examples:

• Allowing up to four periodontal cleanings per year following completion of active periodontal treatment that matches the American Academy of Periodontology parameters of care. Periodontal cleanings are not the same as regular adult cleanings and it is important for the benefit plan to cover these services for proper periodontal follow up care.
• Modifying replacement limits. Replacement limits for crowns and other cast restorations are currently established at a 60-month interval, yet research supports the replacement at longer intervals – more akin to 10 years (120 months).
• Looking at the frequency of dental X-rays. Research supports placing tighter limits on survey films (films taken to look for problems when problems are not apparent).

2. Consider Dual Options

Some employers find that offering one dental benefit program serves their needs while other employers find it more cost effective for themselves and their employees to have a choice of dental plans. Dental HMOs (DHMOs) are very popular in California. In many cases, they are offered as an option in a dual-choice program. In fact, California had more people enrolled in DHMOs in 2007 than did any other state, according to the National Association of Dental Plans. An employer in California might find that it can meet benefit cost objectives and employee satisfaction goals by offering a dual-option plan that includes a DHMO and a dental PPO (DPPO).

Employees that are looking for basic dental coverage, for a lower cost, can choose the DHMO while employees who are looking for greater access to providers and coverage mobility can purchase the DPPO coverage.

In addition, there can be two DPPO offerings in areas where DHMOs have limited provider access. DPPO plans with different coverage levels, deductibles, and annual maximums can offer employees the plan they want at the right price. Again, this provides more choices and lets employees adjust their benefit expenditures to their personal situations. Therefore, these plans are likely to have more perceived value in a tight economy.

3. Offer Voluntary Dental Benefits Including for Retirees

Voluntary dental benefits can also be cost-effective in meeting employers’ objectives as well as employees’ oral health needs. When thinking about adding a voluntary dental benefit, don’t overlook its importance to an employer’s retiree population. The current economy has had a major effect on retirees’ asset values. In addition, over the past several years, dental costs have been increasing at twice the rate of the Consumer Price Index and dental benefits for retirees are very limited. So you can see how some retirees may be struggling to maintain their oral health with rising dental costs and limited access to group dental benefits.

A voluntary dental program, in which retirees pay 100% of the premium, gives them the advantages of group dental pricing. It also gives employers an opportunity to be responsive to retirees’ health needs without adding costs to their budget.

Administration of voluntary retiree dental program can involve negligible work for employers because the insurance carrier should be expected to handle marketing, enrollment, customer service, record keeping, and billing once the employer provides an eligibility file. A voluntary dental benefit fulfills an immediate need for retirees and can help employers retain valued active employees. Even Generation Y employees are concerned about affording healthcare in retirement. An employer that is able to add a benefit, especially while other items may be getting cut, is likely to engender greater employee loyalty and improved benefit satisfaction.

4. Provide Employee Education

The goal of a dental program should be to improve oral health. Therefore, educating members on the proper use of the dental plan and their treatment options is another way to help manage the costs of the plan. In fact, promoting good oral health can have a far-reaching effect on a person’s overall health since certain oral health conditions and medical conditions have been linked. Optimizing the value of an employer’s dental plan can not only help employees, but it can also contribute to business performance. In a tight economy, that is really something to smile about.
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Michael Schwartz is vice president, Dental Product Management for MetLife. MetLife is the largest administrator of dental benefit plans among all single commercial carriers, providing dental plan administration for over 21 million people. For more information on MetLife, visit www.metlife.com.