SYMPOSIUM PRESENTATION: Ethical decisions for the patient, provider and the payer

Aksu, Mert N.



•        What is insurance?  Insurance exists to spread risk. Risk pooling.

•        Insurance companies assume that not all persons insured will incur the risk.

•        Dental insurance…is it insurance?

•        You can insure your car against fire, theft, and collision…

•        You can’t insure your car against wearing out…Insurance is for rare but catastrophic events

–       A large number of people pay a small amount

–       A small number of unlucky people collect a large amount
     * Insurance cannot cover routine problems
     * Example: Dental Insurance - expensive
           Most dental expenses are routine
           Large expenses often foreseeable (crowns, etc.)

•        The more elastic or price responsive a
particular service is-
the more difficult it is to insure against.

•        Think of the  services where price affects demand.

•        What happens when you have dental insurance and then when you do not?

•        The complexities of insurance and the cottage industry of dentistry

•        Fee for service – FFS

•        Direct Reimbursement – DR

•        FFS paid by an indemnity insurance plan.

•        Dental Service Corporations – Delta/ BC/BS

•        Point of Service Plans – POS – FFS

•        Independent Practice Associations – IPA

•        Preferred Provider Organizations – PPO –

•        Exclusive Provider Organization – EPO

•        Capitated Plans

•        Dental Insurance…

              Administrative cost ranges for the various types of dental plans are indicated by the percentage of premium and are shown below.

              •            Traditional (indemnity) insured: 15% to 30%

              •            Traditional (indemnity) self-funded: 6% to 12%

              •            Capitated (DHMO): 25% to 45%

              •            Preferred provider organizations: 15% to 30%

              •            Direct reimbursement: 4% to 9%

•        Ethical issues in Dental Insurance
Central Values in Dental Practice*

  1. Patient’s Life and General Health.
  2. Patient’s Oral Health.
  3. Patient Autonomy.
  4. Dentist’s preferred pattern of practice.
  5. Aesthetic values.
  6. Efficiency in use of resources.

•        *Ozar, David and Sokol, David Dental Ethics at Chairside.

•        Dental Insurance? Is it really insurance or just cost shifting?

-         Insurance = Collective bearing of Risk. What is the economic function of insurance?  E.g., (1)  auto liability insurance;  (2) life insurance.

-         Usually we say that someone “insures against a risk.”

-         Reducing risk increases wellbeing:  Example- Probability of accident = 1/3.  Cost of accident = $300. If it costs $100 for a $300 payout in case of accident, then

-                       (1) profit = 0, 

-                       (2) accident does not change the expected net income of the insured (expected net income is wage minus $100 whether or not there is an accident), but reduces the variance in the net income. 

-         Insurance provides a reasonable degree of security and assurance to be protected in the event of a loss of any sort.

•        Dental Insurance? Is it really insurance or just cost shifting?

•        -             insurance defined-

-         How does dental insurance look like insurance, on how not.

-         Cost shifting to employer funded tax free benefit…why not flexible spending-

-         Between 12% and 26% of premium dollars go to administrative overhead.

•        Dental "insurance"* had its beginning in the early 1970's. Thought that "insurance" would encourage those patients who needed or wanted dental treatment to have these services performed.

•        The word insurance is defined as "protection against a loss". The term has been used in medicine, as catastrophic loss can occur as a result of sickness or accident.

•        This term has been used in dentistry, but it is a misnomer. "Benefit" more aptly describes the allowance which is negotiated for an employee between his/her place of employment and "insurance" company. All dental "insurance" companies have a table of benefit allowances which rarely exceeds $1500 per calendar year. This amount is very close to the benefits of the 1970's.

•        **If dental benefits were to have kept up with inflation such as they have with true insurance, they would amount to over $10,000 per year.

•        Dental Insurance and Ethical Issues

              Moral Hazard.

               Adverse selection/cream skimming

              Shift in the demand curve.

              Service limits.

              Missing tooth clauses.

              5 year prognosis.

              Limitations on materials.

              Reimbursement rates.

•        Ethical issues in Dental Insurance

–       Insurance business responses to shift in demand curve and moral hazard.-

•        Co-pay

•        Service limits – restriction on replacements

•        Reimbursements caps t0 70% of UCR

•        Annual limits

•        contracts

•        Insurance and the shift in demand

•        Per capita dental expendatures

•        Issues where insurance affects patient autonomy-

1. Least expensive alternative treatment) policies.

2. Fees which are higher than usual and customary and reasonable. (Does that mean we are unreasonable???)

3. American Dental Association data show that the average dental office overhead is over 70%. What is impact on care given an arrangement where DDS is discounting fees 20-30%

4. should cash paying patient, who is paying more, subsidize the cost of care?

•        Ethical issues in Dental Insurance

•                      Few patients realize that  for the most part  dental insurance plans are an agreement between the patient, the employer or plan purchaser, and the insurance company.

•                      Many patients blame the dental provider for dental insurance denials, delays or shortcomings.

•        Other factors to consider…the impact of insurance on ethical decision making models

•        Patient does not really get to choose how premium dollars are spent, employers negotiate and purchase plans  will little input from employee (exception - union in collective bargaining agreement )

•        Dentists are spending time and resources processing claims and advocating for the patients in instances where insurance claims are denied as medically unnecessary, lesser expensive alternative treatment is suggested.

•        Ethical Issues Reported by Dentists-
INGRID Y. GUO, PH.D. JADA, Vol. 126, November 1995

              Of the 382 forms returned, 121 did not include a report of an ethical incident and 28 included a statement that there were none to report. The remaining 233 respondents cited a total of 309 ethical incidents-

•        Fees too low 7 out of 309 comments

•        Pressure to join particular plan 16 out of 309 comments

•        Dictating treatment 18 out of 309 comments

•        Insurance Fraud request from patient 19 out of 309 comments

•        Dentists have been trained to provide the “best possible care”

•        Patient is financially coerced into accepting what the insurance will pay for…and DDS/DMD is financially coerced into providing an acceptable form of treatment, rather than “ideal”…

•        Treatment options often have several alternatives.

•        Risks and benefits of each may differ.

•        All may be “adequate” care, but insurance may not cover the “best alternative”

•        Dentist is place in awkward position of prescribing less that “the best possible”…