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FINANCE IN DENTAL CARE

Presented
by:
S.M.M.Hussa

CONTENT

INTRODUCTION

INTRODUCTION
Health care services traditionally have been provided on
fee-for-service basis whereby the patient receives
specific services and pays the provider for service
directly
As the costs of health care continues to rise, the
majority of the people cannot afford dental treatment,
especially when it is provided on a fee-for-service basis
Methods have to be sought to ease costs either by
legislature or by development of a variety of funding
approaches
Dental personals owe it to themselves and to their
patients to develop the clearest possible understanding
of the social forces at work in this complex situation.

HOW DOES A DENTAL PRACTITIONERS


RECEIVE PAYMENT FOR THEIR SERVICES??
PRIVATE FEE FOR SERVICE
POST PAYMENT PLANS
PRIVATE THIRD PARTY PREPAYEMENT PLANS
a. Commercial insurance companies
b. Non profit health service corporation
c. Prepaid group practice
d. Capitation plans
.SALARY
.PUBLIC PROGRAM

PRIVATE FEE-FOR-SERVICE
The two party arrangement is the
traditional form of reimbursement
for dental services
Dentists overwhelmingly prefer to
practice under this arrangement and
this is considered as the most
efficient way of providing dental care
Fee-for-service care is an integral
part of private practice

PRIVATE FEE-FOR-SERVICE(cont)
Advantages
1. It is culturally acceptable
2. This system is flexible-fees can be changed in
accordance with market conditions & dentist
is also able to practice price discrimination
3. It is administratively simple- since dentist
need not keep a written list of fees for
procedure
4. It is only system under which some form of
dental care likely will ever be provided

If PRIVATE FEE-FOR-SERVICE were only financing


mechanism then

Despite the flexibility and price


discrimination there are still some
potential patients who cannot afford
dental care

Post payment plans


Also known as budget payment plans
for individual purchase of service
The first step was to offer this service
through an organized dental society
plan were taken in late 1930s by
local dental societies in Pennsylvania
and Michigan

Post payment plans


Under the budget payment plan, the
patient borrows money from a bank
or finance company to pay dentist
fee
After the application is approved by
leading institution the dentist is paid
the entire fee
The patient then repays the loan to
the bank in budgeted amount

Post payment plans(What actually


happened)
It was hoped that this plan would benefit
large segment of population but they have
not done
Plan was used by middle earning group
rather than in the lower income group
The patients were associated with
defaulted loans and low income patients
would also have more difficulty being
accepted as credit worthy by leading
institutions

Private third party


prepayment plans
Payment for services by some agency rather than
directly by beneficiary of those services
The dentist and patient are first and second parties
and the administrator of finances is third party
defined as the party to a dental prepayment
contract that may collect premiums, assumes
financial risk, pay claims and provide administrative
services.
The third party is also known as carrier, insurer,
underwriter or administrative agent.
Usually the term third party refers to a private
carrier such as an insurance company

Insurance principles and dental care


Earlier dental care was considered un
insurable by carrier
To be insurable a risk must
1. Be precisely definable
2. Be of sufficient magnitude that if it
occurs it constitute a major loss
3. Be in frequent
4. Be of unwanted nature
5. Be beyond the control of individual
6. Not constitute a moral hazard

Insurance company have found that dental


insurance can be made more feasible

1) Have patient share the cost


2) Limit the range of services available
3) Offering services only to group
4) Include waiting period after
enrollment before benefits become
payable
5) Use pre authorization and annual
expenditure limit

Different type of payments offered by insurer are

1. Deductible:
. It is stipulated flat sum that patient
must pay toward the cost of
treatment before the benefits of
program go into effect
. Some time called front end payment

Different type of payments offered


by insurer are
Co-insurance:
An arrangement under which a carrier and beneficiary
are each liable for a share of cost of dental services
provided
E.g.: a patient has to pay 20% of the cost of hospital care
the remaining 80%will be paid by insurance company
Also called co payment
It means that patient pays a percentage of total cost of
treatment
Insurance carrier limit the range of health care services
covered termed as limitation of benefits
It helps in keeping premium down

Different type of payments offered


by insurer are
Group insurance:
Health insurance offered only to groups
This is because illness experience is reasonably
predictable in a group
The probability of adverse selection is also
reduced by use of waiting period after enrollment
before any benefits become available
The waiting period ensures that persons with
existing diseases are not simply going to use
their plan to have that disease treated out and
then drop out

Reimbursement of dentist in
prepayment plans
The ADA has consistently supported the
concept of Usual, Customary , and
Reasonable (UCR) fee as the preferred
method for reimbursement for dentist in
prepayment plans
Apart from UCR fees the other only form
offer is the table allowances
Usual Fee: the fee usually charged for a
given service by an individual dentist to
private patient i.e his or her usual fee

Reimbursement of dentist in
prepayment plans
Customary fee: a fee is customary when it
is in range of usual fee charged by dentist
of similar training and experience for the
same service within the specific and
limited geographic area
Reasonable fee: a fee is reasonable if it
meets the above 2 criteria or it is
justifiable considering the special
circumstances or particular patient in
question

Reimbursement of dentist in
prepayment plans
A table of allowances:
Is defined as list of covered services that
assigns to each service a sum that
represents the total obligation of plan with
respect to payment for such service but
that does not necessarily represent dentist
full fee for that service
If the fee become more than that assigned
to that service by the carrier the remainder
will b collected by dentist from patient

Commercial insurance
Characteristics:
They can be more selective
Claim no obligations towards dental health of
community
Provides specific cash payment
reimbursement for specified covered services
Organize their levels of reimbursement
differently
Do not conduct fee audit and post treatment
dental examination

Commercial insurance
They can compete successfully
because their expertise in promotion
and marketing allows them to
present attractive total health
package plans to potential
purchasers
In India Commercial insurance now
started providing insurance for
dental procedures which do not
require hospitalization

Non profit health service


corporations
Delta dental plans:
It is a legally constituted non profit organization
incorporated on a state by state basis and
sponsored by a constituent dental society to
negotiate and administer contracts for dental care
Earlier known as National Association of Dental
Sciences Plans(NADSP)-1969
The majority of the board of directors of delta plan
are dentists
Other members represents the worlds of finance
insurance and consumer groups

Reimbursement of dentist in delta


plans
Delta dental plans almost exclusively use UCR concept
A participating dentist is defined as any duly licensed dentist with whom
a delta plan has a contractual agreement to render care to covered
subscribers
The dentist participating in the plan have to agree following condition
1. Pre-filling of their usual and customary fees
2. Acceptance of payment for their services at 90 th percentile of fees as
payment in full
3. Fee audits by auditors from delta plan who may check their office
records from time to time . The purpose is to ensure that dentist are
indeed charging their delta plan patient the same fee as they charge
their own patient
4. Post treatment inspection of randomly chosen patient to monitor the
quality of care
5. The withholding of a small amount of each fee to go into the delta
capital reserve fund

Non profit health service


corporations
The 90th percentile:
Suppose in an area there are 1000
participating dentist their fees range from
rs 50 rs 90 for oral prophylaxis then we
plot a graph with the fees in the x-axis and
percentile in y-axis
The percentile of data set divide the total
frequency into hundredths so that 90th
percentile is that value below which 90%of
the observation lies

The figure shows


About 10%dentist
chargers rs 60 or less
About 50%dentist
charges rs 65 or less
About 80%dentist
charges rs 70 or less
About 90%dentist
charges rs 78or less

Non profit health service


corporations
Blue cross blue shield association:
It is a federation of 38 separate health
insurance organization and companies in US
Provide insurance to 99 million Americans
History of blue cross in 1929
History of blue shield in 1939
The two organization merge in 1982
These organization over years have provided
limited dental coverage as a part of medical
policies

Prepaid group practice


It is the term given to a group practice that
provides dental services on prepaid basis
Such group are now generally regarded as
open panels
Group practice is that type of dental practice
in which dentist some times in association
with the members of other health profession
agree formally between themselves on certain
central arrangements designed to provide
efficient dental health service -ADA 1969

Type of group practice


1. General practice groups composed
entirely of general practitioners
2. Single specialty groups where all the
members of group of same specialty
3. Multispecialty groups where certain
practitioners in two or more
specialty field of practice

Advantages for the dentist who


practice in a group are
I. It provides better ways of organizing once life i.e.
vacations and continuing education can be planned
more readily because colleagues in the practice can
temporarily care for a dentists patients during the time
II. There is less disruption in the practice caused by
illness to a dentist
III. Quality of care is set to be improve because of built-in
peer review
IV. Financial fringe benefits such as sick leave and pension
plans can be build into a group organization more
readily thus easing the day to day economic concern of
dental practice

Health maintenance organization


a legal entity which provides a prescribed
range of health service to individual who has
enrolled in organization in return for a
prepaid ,fixed and uniform payment
The 4 principle that characterize an HMO are
1) An organized system
2) Comprehensive health maintenance and
treatment services
3) An enroll group
4) Reimbursement

Dental personnel in HMOs


1.
2.
3.
4.

Staff model
Group model
Independent practicing association
Direct contract model

1. Staff model
. in this employees are salaried by
HMO
. May or may not be a dental director
2. Group model
HMO contracts directly with group
practice , partnership , or corporation
for provision of dental service

3. Independent practice association


Association of independent dentist or
physician that develops its own
management fiscal structure for
treatment of patient enroll in a HMO
4. Primary care capitated network
Similar to IPA except that HMO contracts
directly with individual provider for
provision of service

Caption plans
The basis of capitation plan is that the
contracting provider whether an HMO group
practice or individual dentist receives an
established negotiable amount monthly or
annually basis for each eligible patient
The money is paid regardless patient
utilizes care or not
In return patient is entitled to receive a
prescribed set of service over a specific
period

Salary
Dentists in some group practices, those in the
armed forces and those employed by public
agencies are salaried
Advantages
It allows a dentist to be largely free of business
concerns of running a practice thereby allowing
the dentist to concentrate on clinical matters
Fringe benefits are also often attractive
Disadvantages
There could be a lack of financial incentive that
some dentist needs to be highly productive

Public programs
Private practice is usually not able to
meet dental demands of all the public
Therefore a number of public program
are aim to meet the need of specific
groups in diverse society
Public financing of dental care:
A. Medicare
B. Medicaid
C. National health insurance

Public programs
Medicare:
o This program removed all financial
barriers from hospital and physician
service for all persons ages 65 and
above regardless of financial means
o By the mid-1970s Medicare has two
parts
Part A:hospital insurance
Part B:supplimental medical
insurance

Public programs
Medicaid:
It is a joint federal state program covering at
least these basic services
o Inpatient hospital care
o Outpatient hospital care
o Laboratory and x-ray service
o Skilled nursing facility services
o home health services for individual aged
under 21&older
o Physician services

Public programs
National Health Insurance
Introduced by Bismarck in Germany
Primarily a financing mechanism by
which health care service are paid
from publicly organized fund
Humanitarianism was a factor in their
development

Payment for dental health service in


India
1. Fee-for service:
2. Dental insurance
3. Government schemes
a) Employees state insurance scheme
(ESI)
b) Central government health scheme
(CGHS)

Conclusion
The financing of dental care is well developed
and well practiced in developed countries like
U.S
However in India fee for service is still most the
prevalent form of availing dental services
Although free dental services are provided by
the government at some of the health centers,
it is scarce and in-efficient
Dental insurance is in its infancy in which the
very high premiums , dental service is still very
far from the reaches of indigent.

Thank you