Finances

How am I gonna get paid?

money stack

We’re no strangers to the “spare no expense” nature of our dental school education. “Debt” and “loans” are just as much a part of our vocabulary as “MOD” and “alginate.” While the complexity and intricacy of the financial systems in dentistry cannot be fully captured in a single blog post by a 4th year dental student, I hope to provide a very basic framework for what is and what might be when we are sitting at graduation with diplomas in one hand and food stamps in the other, contemplating the question, “How am I gonna get paid?

First, let’s talk about dental plans.
Currently, there are two very broad categories of dental benefits plans.

  • Fee-For-Service (FFS): A dentist will establish a set of fees for each service and be paid based on the services and treatments provided. This is the popular form of payment and generally the more lucrative route as it gives the dentist the most freedom to perform treatments without concern for what an insurance company will cover.
  • Managed Care Plans: These generally have more restrictions for both the dentist and patient but are cheaper for patients when compared to FFS offices. For dentists, insurance companies will list them as a provider in their network and send patients to their office, helping build a consistent patient base.
    • Preferred Provider Organization (PPO): Fees a dentist charges are established by the insurance company while patients are privy to benefits and discounts if they see a dentist in the PPO network.
    • Dental Health Maintenance Organization (DHMO): Patients usually have access to an even smaller network of providers while dentists are now paid through capitation, which means they are paid a designated fee for each assigned patient every month; services are then given to the patient at no cost or a reduced cost.

 
So this whole U.S. health care reform thing . . . will that affect how I get paid?
The big buzzword in health care reform right now is quality. Many believe that the dominant FFS payment system promotes over-diagnoses and over-treatment leading to the high cost of our health care system. New systems of payment have been suggested that are designed to incentivize providers to emphasize quality and not quantity of treatments and services. Known as Value-Based Purchasing, insurance companies essentially measure, track and evaluate the quality of care delivered by providers through pre-determined performance measures and metrics; while the provider may still be paid a portion through FFS or capitation, they may also receive bonus payments for meeting these quality measures.

This type of system is already gaining momentum in the medical field. At the beginning of this year, Health and Human Services Secretary Sylvia M. Burwell announced that the HHS has set a goal to move 30% of FFS Medicare payments to quality, value-based payments by the end of 2016 and to reach 50% of FFS payments by the end of 2018. Moreover, many large insurance companies have begun testing value-based payment systems. This January, UnitedHealth further departed from the FFS model as it pushed its commitment to over $43 billion for value-based payments to doctors and hospitals.

Is dentistry next?
While various entities across the U.S., from health systems such as HealthPartners and Kaiser Permanente to insurance companies such as Delta Dental, have piloted value-based payment programs, the dental financing system has remained largely untouched. The differences in the way medicine and dentistry are practiced, lack of insurance coverage, and the relative absence of evidence-based guidelines and performance measures have all been cited as barriers to implementing a value-based payment system. For example, according to the California Health Care Foundation, 42% of spending on dental services in 2012 was attributed to out of pocket, giving dentistry the second highest percentage out of eight other US health care spending categories. This large percentage is a natural barrier to a value-based system that relies on private and public payers such as insurance companies or the government.

So . . . how am I gonna get paid?
At the end of the day, who really knows in which direction the winds of health care reform will blow? While I can’t speculate on the future of dentistry’s payment system, it is safe to say that familiarity with the financing of dentistry is an important responsibility to ourselves and our patients. Understanding the ways in which various payment systems and plans affect our patients and the way we practice can help us be more effective, more responsible dentists.

~Alex Sheen, Columbia ’16

Alex Sheen

Alex is a fourth year student at Columbia University College of Dental Medicine and served as the 2014-2015 chair for ASDA Community Service. When he is not in clinic, he is eating ice cream. When he is not eating ice cream, he is in clinic telling his patients not to eat ice cream.

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