Innovative dental insurers are exploring tiered networks as a modern plan design that may save employers and patients money. Tiered dental plans are "certainly something that could emerge if there are excellent analytics and good thought put into it," says Kevin Jackson, vice president of underwriting and actuarial for Delta Dental. "This concept certainly has merit. I would guess that everybody's in some stage of research and development [of tiered networks]. Certainly we are."
Ethan Foxman, president of Denex Dental, agrees: "It's something that's going to be used going forward. It's clearly in the marketplace. It's going to be interesting to large groups."
The idea is to use tiers to steer workers toward dentists who are a better value and offer appropriate care without overtreating or undertreating.
"Most dental networks [have] some discounting arrangement," explains Mark Moksnes, executive vice president of sales and marketing for Securian Dental, which sells a tiered plan. He predicts that the old model won't work well in the future because "the number of dentists in the country is starting to shrink," leaving a supply that's smaller than the demand.
However, Brett Schor, executive vice president of sales for Denex Dental, comments: "I don't know if it's going to be big down the road. I think it's going to be more of a marketing tool. We're starting to hear about it more and more because people are looking for something that will have some market differentiation."
Jeff Album, a spokesman for Delta Dental, warns decision-makers to beware of grand pronouncements about trends because "it's a slow-changing industry. We don't seem to have a next-generation" plan type.
The advantages
By using tiers to nudge workers toward top-notch dentists, employers can cut dental costs by 15% to 19%, Moksnes estimates. With tiered plans, there are more guarantees in terms of transparency in price and quality, he adds.
Foxman says, "One of the biggest [advantages] is its potential cost-management."
This approach in the dental plan might support a broader company effort to promote health care consumerism and employee accountability for health and wellness.
"The tiered networks that are emerging have a distinct consumer-driven approach to them," Jackson observes. Gary White, chief sales officer for Securian Dental, adds a tiered plan "puts the power of information and consumer choice to work in reducing employers' dental claim costs on an immediate and sustainable basis. Consumers are rewarded through the long-term cost savings that they personally derive from the higher-ranked dentists' approach to care, and they're also rewarded through stronger coverage in their dental benefit plan design."
Even without formal tiers in the plan, "there could be market-driven behavior that could drive affordability" by using information about provider quality, Jackson says.
The downsides
There's potential for employee backlash if many find that their dentists aren't in the best tier. "The marketplace continues to value the size of the network. The employer doesn't want to limit the choice of dentists," Album says. "A tiered network by definition is going to be a disruption because you are narrowing access. It is a highly restricted form of managed care. The question is: Does the market want that?"
Moksnes confirms, "Employers want to have freedom of choice for their employees. They want to have stability."
Foxman concedes that a tiered network "does further channel the membership. It's resegmenting. It has the potential to upset the membership because the truth is, people don't like to change dentists."
In addition, some dentists oppose the idea of tiered plans, just as doctors have resisted pay-for-performance programs that differentiate by provider quality.
"Some dentists, especially those who don't score well, have started to push back a little bit," Dr. Richard Hastreiter, dental director and vice president of oral health analytics for Securian, admits.
Foxman explains, "You're taking a risk of disrupting your provider network. [Some dentists] are going to get upset that they're not in the [highest] classification and maybe leave the network" or start undertreating because they think that will move them into a higher tier.
Schor comments: "The one thing you want to avoid is a doctor treating a contract rather than a patient."
It also may be a challenge for the plan to maintain tiers, keep information up-to-date and move dentists to a different tier if necessary. Such maintenance "takes resources," Foxman confirms. "The hard thing is to really analyze which providers are giving the best service, the most reliable service," not necessarily the cheapest service.
Another disadvantage may be the complexity of the plan, given employees' lack of knowledge about benefits. "If I have too many choices, I'm not going to make any choice," says Schor. Like consumer-driven health plans, tiered networks require effective communication from employers and lots of education for patients to become better consumers. "That still remains a hurdle," Jackson says.
Early adopter
Securian Dental recently launched a new tiered dental program for self-insured groups in Texas. It plans to offer its tiered plan nationwide in the future. "This has got a lot of opportunity to grow. This has gotten a lot of interest," Mosknes observes.
The firm created an oral health management center to study utilization patterns and develop models for tiered networks. It formed tiers based on how dentists practice and their cost-efficiency, rather than price for a given service.
Patients who go to a dentist with a high score, deemed a better value, will pay less out-of-pocket, while those who go to a dentist with a lower score will pay more.
"Dentists practice differently, and those differences have economic consequences," says Hastreiter. "That's just a natural continuum," with some being more conservative and others being more aggressive in treatments.
Tiering "helps us identify dentists who do the right treatment for the right patient at the right time, compared to their peers. Utilization is where the cost is coming from, not necessarily just fees," Moksnes says.
For example, the frequency of teeth cleanings, dental X-rays and cavity fillings varies among dentists. Some may have a tendency to do the work earlier and more often than others. The timing of care should be based on medical guidelines and individual health needs and risks, not on what the patient's insurance covers, Hastreiter says.
"Tiered benefits, which take into account a provider's approach to care, are the best bet for taming health care inflation while putting the consumer in the driver's seat," White says. "The key to a successful tiered plan is ranking a meaningful percentage of the dentists in America on their approach to care."
The number of tiers can vary based on an employer's needs. There is "tremendous flexibility for a large group. We can tailor programs for the specific needs and goals of large groups," White remarks.
Meanwhile, Delta is analyzing its data warehouse to determine how tiers should be structured. Not having the right data might be keeping some carriers from establishing a tiered network, Album notes.
Jackson recommends looking at treatment patterns longitudinally, tracking the efficacy of treatments over time and separating the dentists who take a long-term view from those who take a short-term view.
However, he cautions, there are differences in patient populations that dentists can't control, which makes comparisons difficult. "Not every dentist is treating the same clientele. Dentists treat patients with different histories from different parts of the world and in different socio-economic levels. We need to look at the best delivery," he says. "It would be really easy to oversimplify."
