Where Did My Money Go? Is Dental Insurance Driving Down Profits?

I just ended a phone call with a fantastic dentist in our ACT community who told me, with the most massive dose of sarcasm that I’ve heard in some time, that she was off to do her favorite thing; run the insurance adjustment report to see how much work she did for free this month.

If you're anything like this doctor, and chances are good you are, you know this feeling, the feeling that your profits are being swallowed up by the insurance companies. You know it all too well.

Every dentist I know got into dentistry because they wanted to care for, and improve the lives of their patients. I have yet to talk to an individual who  tells me “I was motivated by the idea of fighting with insurance companies to get an FMX covered more than once every five years,” or “ I got into dentistry for the love of writing narratives to fight for the care that my patients need.” Yet this is the reality for so many. Always fighting with insurance and trying to “prove” to patients that care is needed, even though their dental plan allowances “tell” them otherwise. 

As this insurance frustration was brought front and center in my mind, I wanted to dive a bit deeper into what dental insurance is, and what it is not. I also want to share the mindset we coach at ACT Dental to help our teams with the constant barrage of insurance questions, stemming from lack of knowledge and misinformation that they must deal with daily.

Is Dental Insurance Really Insurance at All?

When I think about insurance, be it car, home, life, or medical, I think in terms of protection, and specifically protection from catastrophic loss. Yes, there are “smaller” benefits along the way, and we all know that preventive care options are important for our health, yet this is not the reason we truly carry insurance. We have insurance plans for the BIG things so those big things don’t break us.

The first insurance company in the U.S. dates back to 1752 and was co-founded by Benjamin Franklin to insure the citizens of Philadelphia from the total loss of their homes by fire, a catastrophic loss. Medical insurance saw its big growth during the great depression, as it protected vulnerable citizens from the inability to receive needed medical care.

Now let’s think about dental “insurance.” A relative newcomer to the stage, dental “insurance” first appeared in California in 1954. It was an added employee benefit designed by the International Longshoremen’s and Warehousemen’s Union and the Pacific Maritime Association. These plans became reasonably widespread by the 1970s and offered a maximum benefit of $1000 to their customers. While $1000 paid for quite a bit in 1970, it’s fair to say that from its inception, dental insurance was never intended to be a plan that covered a catastrophic loss. These plans were meant to be a “benefit” to help members of the early unions afford basic dental care costs for themselves and their families.



Dental Insurance Today

Let’s start here; dental insurance companies are just that, companies that exist to make a profit. And these are big profits. According to Allied Market Research, “The global dental insurance market size was valued at $152.26 billion in 2019 and is projected to reach $237.11 billion by 2027”. This, my friends, is a big business.

One reason that these profits have existed, and continue to grow, is because coverage maximums have not kept up with inflation, and annual maximums have hardly changed since 1970, topping out around $2000 in some of the “better” plans out there. Limits in coverage, waiting periods, pre-existing condition clauses, these are all tactics that insurance companies use to reduce what they pay out. As I’m sure you are aware, the restrictions are only increasing. 

The growth of PPO and HMO networks have only increased the ability of these companies to turn a profit year after year. All they need to do is reduce their coverage options or their allowable fees; meanwhile, you’re left to figure out on your own how to cover your increased costs and help your patients understand that these “companies” do not have their best interest at heart.

Bottom line, don’t wait around for dental insurance companies to change their game, or to start caring about you, your business, or your patients.

Now What?

If you don’t want your business and your patient’s care to be so heavily dictated by dental insurance plans, begin by educating your teams, and inform your patients about the realities of dental benefits. Most importantly, consistently communicate the value of the services that you provide.

Maybe this blog is a great place to start. Have your team read it. Talk about it. Discuss what dental insurance is and what it is not. Print out a sheet with all the terminology that dental plans use and review it. Make sure everyone talking about dental insurance understands what they are talking about.

As with everything that we coach and believe at ACT Dental, the number one thing that you, as a provider and a leader, can do is ensure that you and your entire team continually convey the value of the treatment you provide to your patients. Coach your team members to view oral health and the work performed in your office as a lifetime investment. The more they genuinely believe this, the more they will convey this belief to the patients in your office.

The truth is, as a human race, we invest in the things we value. The day you and your team can help a patient value their health and value the way the services you provide better their life, more than they value their limited dental insurance coverage will be a good day indeed.