Delta Dental of Minnesota continues to blaze new trails in their quest of profitability for their shareholders and customers. Insurance company customers are the employers who desire low cost fringe benefits as dental care. Delta Dental of Minnesota has always been a strong business force and by creating a bold new plan in 1999, Delta Dental has terminated the relationship with a selected group of dentists whom Delta felt had "over-utilized" the system. Delta of Minnesota is the first state to make this move and reaction from dentists is polarized.
Delta Dental of Minnesota studied its balance sheet in 1999 and noted that a group of dentists were "over-utilizing" the insurance system. They identified 464 Minnesota dentists who did not fit the statistical average of dentists. Delta labeled these exceptional dentists as "non-prime" and the remaining 2000 Delta providers were labeled by Delta as PRIME.
The 464 non-prime dentists were singled out by Delta with some significant consequences:
1. Their fees were frozen for a year (hoping to discourage Delta use or even become a non-provider)
2. Their patients were notified by Delta that their dentist was in the non-prime group and strongly suggested the patient utilize a PRIME dentist.
3. By the end of 2001, 74 of the 464 non-prime have been dismissed from Delta as providers. According to Delta spin-doctors, reasons for dismissal were not economically based but rather "to save patients from overtreatment."
Further, in 2001, Delta Dental has created among the remaining 2000 PRIME group a new network of "value" dentists. By profiling statistics on dentists, Delta invites particular dentists to be part of an exclusive network. Delta creates loyalty in this network by giving these dentists full reimbursement for their accepted Delta fee. Delta now can seek dental contracts with employers by offering the benefit to corporations of a value network of loyal dentists who demonstrate a statistically favorable usage for treatment. It would appear that the Delta network would be composed of dentists who do minimal treatment.
Delta Dental of Minnesota has discovered and is implementing a brilliant business plan. So brilliant and profitable that Delta Dental of Minnesota is the leader of implementing these PPO plans in other states. So strong is the infrastructure, Delta Dental of Minnesota is the leader in the growing market of dental PPOs and is looking at global networking and possibilities. One of the global connections is the outsourcing of claims processing utilizing minimum wage clerks in offshore locations.
The reaction of the Minnesota dentists to Delta Dental of Minnesota runs the emotional and political gamut. Some of the 74 dentists had been Delta providers since it?s inception and felt a part of the Delta family. They felt a professional tie and were hurt when dismissed. Other non-prime Doctors saw the handwriting and ended their Delta relationship before the dismissal. There is not a single dentist in Minnesota without an opinion on Delta and some are outraged.
Andrew Grove, founder of Intel said, "Sooner or later, something fundamental in your business will change. In Minnesota, the relationship of dentist, patient and insurance has definitely altered. Minnesota Delta is an early and strong player in a growing marketplace. Their impact will be greatly felt.
Some dentists are outraged. They want to change Delta, they want to sue Delta, and they take all their anger out on Delta. What good does that do? Delta is a business with a mandate to be profitable for its shareholders and customers. Decisions are made, not to be vindictive to dentists, but to do business and do it well.
Our outrage needs to be directed inward. We as dentists are the ones who made choices or failed to make choices. In 1993, I predicted that in ten years, 90% of dentists would be employees. The definition of an employee is that your employer controls work conditions, procedures, diagnosis and fees.
When insurance began in the 1970?s, the average dental overhead was 40-45% with a net of 55-60%. Since the 1970?s, overhead percentage in a dental practice has risen by 1% a year. Insurance promised lots of patients, which were delivered. Today, with the average overhead at 75%, it takes twice the number of patients as 1970.
The arrival of dental insurance in America is close to the classic story of the frog in a pot of water. Thirty-five years ago, when dental insurance started, it brought many patients to the dentist who had not been seen on a regular basis. Dentists were the frogs in a pot of water. Over the years, the temperature of the water has risen but the frog didn?t realize it and never jumped from the pot. Insurance companies started dictating fees, procedures and coverage. Dentists grumbled about fees as the temperature of the water rose but stayed in the pot. Insurance maximums have not changed but the frog stays in the pot and slowly boils to death.
With the actions of Delta Dental and choices dentists are making towards optional care and no insurance support, we are developing a several-tiered system. Insurance mentality early on was that all dentists are the same. But are dentists all the same? The paradigm of equality and sameness is being challenged. The question of tiers is really optimal treatment plans vs. minimal care. Can dentistry accept the fact there will be different tiers of service offered or do we all need to be the same? This is a real philosophical shift in dentistry to have different levels of care. Is this alright? Other businesses successfully offer different levels of care and customer has a right to choose their level. The auto industry, clothing, computers, cell phone service are just a few examples.
Question for dentists is "what is your practice vision?" Clarity in this area is so critical to your decision-making. Men and women choose to be dentists for a reason. Find that reason. A powerful move is the individual choice by dentists as to their own path and destiny. Insurance companies are making their stand very clear. You have a choice. They are not holding dentists hostage in choosing the level of service you wish to provide.
To work well with insurance companies and the Delta Dental of Minnesota PPO, your vision needs to be clear. If your vision is a PPO employee relationship and minimal care for patients, this is your chance.
This is not just a black/white question. It is also very possible to continue to be an insurance provider and be mentally free of insurance. After 35 years of insurance, dentists, patients and staff have developed a practice culture where we allow insurance maximums to dictate diagnosis. We stop short of developing with patients their dreams for long-term dental health and instead, fix the worst one because we know the patient will accept the treatment.
Being mentally free of insurance maximums allows dentists to be part of the provider network, utilizing new patient flow and obviously accepting a lower reimbursement. Patients with insurance have warm relationships with their dental offices who can present long-term treatment plans, some of which is reimbursed by insurance. This is a choice, also. It is up to the dentist to determine to level of care, and not think about the level of insurance reimbursement during diagnosis.
If you have a mind-set to be totally free of insurance, you must develop the business skills for having excellent treatment accepted. You must learn leadership skills to position your practice of choice, you must develop marketing skills to replace the reliance you had on the insurance company to market for you, profitability emphasis must be learned as well as learning to communicate value with patients. Learn case presentation skills that put the patient at choice. Learn to ask value-based questions of patients to help them make choices themselves.
With a practice of choice, you are competing for discretionary dollars. You cannot just learn great clinical skills and become a non-provider. You must have excellent service skills, listening skills, leadership skills and a real vision of you and your patients. It takes courage, commitment and a standard of excellence.
Insurance companies are making their visions known. As dentists, you now have several clear choices to make. The rest is up to you and what ever you do, do it well.
Dr. Blatchford is a strong advocate of choices in dentistry. He coaches dentists to increased profitability, enjoyment, and personal freedom. Blatchford Solutions is recognized as the leading practice management firm. Dr. Blatchford is speaking at Great New York, Yankee Dental, Dallas Midwinter, and Delaware State Meeting. His monthly audiotape, called Blatchford FILES, can be ordered by calling (800) 578-9155 or contact the Web site at www.blatchford.com.
