"Make yourself a sheep, the wolves will eat you." -- Ben Franklin
Managed care varies in its market penetration across the country. In regions with a shortage of dental practitioners, dentists are capable of remaining non-participants in low-cost dental plans. Regions with intense competition force the dentist to compete for patient dollars and in some cases, dentists become trapped between rival insurance plans in a vice-grip with no escape. Rhode Island is one example on a growing list of insurance-controlled climates. The Ocean State has become a fertile proving ground for the insurance industry's most oppressive reimbursement policies. Conditions exist such that two dominant PPOs have flourished in an environment where they are not threatened by competition, government intrusion or loss of provider base. Is Rhode Island the canary in the mineshaft? Are we witnessing a forecast for the future of dentistry for the rest of the country?
Rhode Island has evolved into a market where two insurance companies control 95% of the market, each with approximately equal shares. The state is geographically small with a population hovering at approximately one million residents who boast the highest percentage of insured individuals in the country. 547 practicing dentists exist within the state of Rhode Island with a shockingly high participation rate in both dominant plans. Despite a national participation rate in PPO-type dental plans of 47.6%, Rhode Island has a 99% participation rate in both dominant plans. With such an overwhelming market penetration by the two PPOs, the stateis dentists perceive it to be impossible to avoid participation. Should one choose not to participate, the financial burden is transferred to the patient, whereby the insurer penalizes the subscriber by reimbursing up to 30% less than the already discounted fee profile. Daring general practitioners who have chosen to forego participation mid-career have met with economic disaster as their patient population migrated to the next nearest participant.
What has evolved is essentially a duopoly, a beast much more insidious than a monopoly. A parallel exists in a recent lawsuit involving two New York auction houses that control over 95% of their market. The accusation was that the two auction giants conspired to set fees and commissions, thus colluding to share market dominance, and ultimately profits. With similar aplomb, the insurance players in Rhode Island mirror one anotheris fee schedules to within a few dollars of the other, and fail to allow for fee increases without the other doing the same. The result is a depressed fee schedule that falls, in some cases, up to 38% lower than our northern neighbor, Massachusetts (see figure 1). The insurance industry rationale is always the same: the need to remain competitive in the marketplace. Marketing pressure dictates that one company must lower the cost of their plan to attract businesses to purchase their product over that of the competition. With each insurance company essentially offering the same product, and in a bit of irony the product is us, then the only difference between the two plans is one of cost to the consumer. When the need to offer discount plans to the consumer is coupled with the desire to garner record profits, the cost cutting solution to the equation can only be draconian reimbursement profiles. The two giants are locked in a battle for market share where one cannot move without the other and the dentist is trapped in the middle.
An example of the mirror moves of the insurance duopoly occurred recently. One player chose to raise the reimbursement profiles assuming that the other would as well. The other did not. In what was interpreted by the Rhode Island dentists as a blatant example of anti-trust, insurer #1 issued a letter threatening to rescind the fee increase based solely on the inaction of the competitor. Complaints ultimately pressured the insurer into honoring the fee increase, but failed to gain the attention of the state agencies responsible for anti-trust enforcement. The Attorney General passed the buck to the Department of Business Regulation who responded with the now infamous statement, direct from Rhode Island statutes: "the department's principal statutory responsibility is to regulate the financial viability of its insurer licensees...promote the affordability of coverage...[thus our] concerns about financial viability and affordability run counter to any interest that health care providers may have in maximizing revenue that they derive from subscribers of health benefit plans." This stunning revelation from governmental sources failed to suggest that there exists any source for regulation of insurance industry profits, in essence stacking the deck in favor of the insurance industry.
Rhode Island dentistry is at a unique crossroad. With 40% of the dentist population over the age of 50, the dentist stock will need replenishing. Despite being a pleasant place to live with unique opportunities for ocean recreation and a reasonable housing market, it appears that the "word is out" for young dentists to avoid Rhode Island as a practice location. Practices are difficult to sell, values are depressed, and young associates are a rare commodity. Many practitioners with ready access to Massachusetts or Connecticut are commuting to satellite facilities across state lines in search of equitable reimbursement. Despite insurance claims to the contrary, Rhode Island's access to care is the lowest in Southern New England.
There is hope that the tide will turn. Pending legislation such as the Health Care Fairness Act may provide some relief to our beleaguered profession. Legislators are becoming more savvy to what has occurred in the healthcare market. But until our state association and the membership engage in some out-of-the-box thinking, we will continue to suffer in an environment that has evolved with the following oppressive parameters: Health care insurers control the flow of patients to providers; Insurers dictate the fee that they will pay providers; Economic power of the health care insurers dominates the market; Two virtually identical insurers account for over 95% of dental healthcare insurance in Rhode Island; Health care contracts are offered on a take it or leave it basis with no input from the providers; Providers do not have sufficient market power to reject unfair provider contract terms; Unfair contract terms impede the provideris ability to deliver medically appropriate care without delay; Inequitable reimbursement reduces access to care by reducing the resources that providers can devote to patient care, thus decreasing the time available for the practitioner to spend with the patient.
With governmental authorities condoning the insurance industryis predatory practices, the state association proving itself thus far ineffective, and the ADA yet to intervene, the Rhode Island dentist has succumbed to apathy. The sensation that we are trapped has led some to leave the state, and others to avoid rocking the boat as they coast to retirement. We are at the endpoint where the pendulum has swung too far in favor of the insurance industry. When two companies are in lockstep, with total domination of the marketplace, regulators, legislators, and governmental authorities should step in. It appears that litigation and legislation may be the only options, but how do you fight a political system replete with highly paid lobbyists backed by corporate wealth?
Market control by the insurance industry in Rhode Island has resulted in predatory pricing for premium dollars with resultant reimbursement at dismal levels. Dental care expectations are vanishing as doctors become busier, treating more patients with progressively shorter appointment times per patient. The Rhode Island dentist has become the proverbial ideer in the headlights, absolutely trapped and unable to move. Dentists in the rest of the country should take notice, and prohibit this unfortunate cancer from spreading to their region. Prevent the deplorable situation of being held hostage by the insurance industry. Learn from us. Control your market. Make a wise, informed choice while a choice still exists.
Biographies
Dr. Thomas R. SanGiacomo is an oral and maxillofacial surgeon in private practice in Johnston, R.I. He is treasurer-elect of the Rhode Island Association of Oral and Maxillofacial Surgeons, is associate editor of the Rhode Island Dental Journal, and division director of oral and maxillofacial surgery at Roger Williams Medical Center.
Dr. Stephen T. Skoly is an oral and maxillofacial surgeon in private practice in Cranston, R.I. He is president-elect of the Rhode Island Association of Oral and Maxillofacial Surgeons and is a Cranston District Trustee to the Rhode Island Dental Association.
