Most dentists view insurance as a necessary evil. For those eight who don’t, Delta is making it that much easier. Delta has quietly been changing its evil ways… and not at all for the better for doctors or patients.
A quick review: Delta Premier is/was/should be the best insurance for everybody. Dentists get reimbursed at or near their standard fees, meaning dentists can afford to take adequate time, hire well-trained staff, invest in technology, use premium materials, and send work to high quality labs. Employers get the widest network of dentists. Patients get the best possible care, through a wide selection of dentists who are compensated enough to provide high quality service.
By contrast, Delta PPO sucks. Dentists are typically reimbursed at 40 to 70% of their regular fees. Remember dental offices typically operate on average at 65-70% overhead. PPOs reimburse at less than the cost of running a business, or at best about break-even. This raises the prickly question of how a dentist can stay in business when each PPO patient actually costs the doctor money to treat. Wouldn’t it be cheaper to not see PPO patients and keep the office closed? There are a few things PPO doctors can do to keep their doors open, and a few things you may tell yourself so you can sleep at night:
- Lower expenses by hiring less experienced staff, using cheaper materials, and not upgrading equipment or technology
You tell your patients “you get what you pay for,” but that doesn’t necessarily apply to a $10.25/hour assistant or discount composite with foreign-language instructions
- See more patients per hour by working faster
Rushing through procedures; what could possibly go wrong?
- Use cheaper labs and cheaper restorations
There’s no certainty that the patient will experience an adverse reaction to a $19 PFMM (porcelain fused to mystery metal) that was made in an overseas sweatshop suspiciously located next to an auto scrap yard
- Up-sell elective procedures that aren’t covered/limited by the PPO
This creates an uncomfortable sell-or-starve atmosphere that is better suited to Time Share sales or an episode of The Dental Apprentice than to dental offices
- Increase the fees for your nice non-PPO cash-paying patients
Which penalizes non-PPO patients and is just plain unethical in some US states and Puerto Rico
I don’t mean to single out Delta’s PPO. Almost all dental PPOs rate sub-sewage, so I don’t mean to imply that Delta’s PPO is uniquely bad. I mean to single out Delta Dental as a company, because Delta happens to be uniquely bad in other ways… which I’ll explain now.
First understand that Delta Dental is a business, and good businesses make money, and Delta is a very, very good business. Several years ago, to increase profits, counter emerging Metlife and Aetna, and remain the Walmart of dental insurance, Delta began promoting its PPO over its Premier plan. This was originally done by switching Premier patients/employers over to PPO. That’s bad for dentists but not necessarily shady business. Non-PPO dentists who were in the Premier program were still getting reimbursed at their contracted Premier rates.
- Delta wants to claim the highest number of in-network PPO dentists
- Any dentist who wants to apply for Premier must also accept PPO
- When an associate joins a Premier practice, the practice must accept PPO or lose its Premier status
- Ditto for practices being sold to associates
Okay, you may shrug. So I have to accept PPOs as well as Premier. My Delta patients are all Premier so it won’t affect me… will it? The answer is a crushing YES.
Even IF the patient is a Premier partner, if the doctor accepts PPO as well as Premier (which doctors are being coerced to do), Delta will reimburse the doctor at the lower PPO rate.
Re-read that above statement 3 more times… Stings, doesn’t it? Even worse, Delta never announced this policy change. My dental friends suddenly and surprisingly found out, kind of like the Titanic captain found out there was an iceberg around. Some dentists are still blissfully cruising full speed ahead through treacherous waters.
How bad is the situation? Look at the ramifications.
- If you’re accustomed to your Premier income, you’re heavily disincented to take on an associate and slash those reimbursements in half
- If you’re buying a practice, the income and profitability projections under a Premier-only dentist will be much higher than you (as a new PPO dentist) can expect
- Banks know the above point, so getting a loan for a highly profitable Premier practice will be more difficult and expensive
- If you’re selling a Premier practice, it’s worth a lot less to a new dentist who can only collect PPO fees… which cuts the value of that heavy Delta Premier practice you were counting on for retirement
You can avoid this by dropping Delta, maybe, but Delta won’t go without a fight.
- Delta typically refuses to tell out-of-network dentists how much they can expect for reimbursement of most procedures
- Delta now refuses to pay out-of-network dentists directly, even if the patient signs the standard request that the money go to the dental office
- This forces out-of-network dentists to bill patients up front, with no clear idea of reimbursement expectations
So you might have to stick it out with Delta after all, which is a lot worse than expected but not catastrophic. Or so you tell yourself. Actually, the catastrophe is on its way to a state near you. In addition to the above maneuvers, Delta has also been cutting reimbursements systematically (state-by-state) to reduce everybody to PPO levels. There’s less outrage if one state gets nailed. After a majority of states have converted, it’s easier to tell the big ones like California and New York they just have to follow the trend.
- Delta reports they set the reimbursement fee at the 80th percentile of dentists “in the area,” which oddly seems to include rural Alaskan dentists-veterinarians-fishing guides, regardless of where you live
- In June 2011 Delta cut back those reimbursements in Washington state by 15% (meaning Delta is now reimbursing at the 68th percentile, assuming they actually started at the 80th)
- In November 2011 Delta cut the Idaho state reimbursements by 8%
- Delta seems to be converging its Premier and PPO fees, so even if you’re Premier and haven’t succumbed to accepting PPO fees, soon there won’t be much of a difference
As I said earlier, these are pretty evil developments for doctors and patients alike. Before you take out your Delta Voodoo Dolls or organize Occupy Delta rallies, this could be indicative of all insurance to come (meaning you’ll at least need more voodoo dolls). Insurance companies are exempt from Federal Trade Commission anti-trust laws and are therefore allowed to collude and prices and services, even though they are competitors. This looks like the beginning of a large-scale squeeze on doctors and their patients. On the other hand, if you’re an executive or shareholder of Delta Dental, evil can be quite profitable.
What do these three have in common?
Coming soon: what you can do to fight the future, besides unleash the Occupy My Street protestors on them…