With managed dental care, everyone wins; joining a managed dental plan offers many advantages - includes tips on how to select a plan - Special Report - The Benefits of Managed Dental Care

Business & Health, Feb, 1994

When asked why they decided to contract with managed dental plans, employers typically offer the same responses: They were attempting to control costs; they wished to offer employees better benefits; or they wanted to do both.

Managed dental plans help employers meet all of these objectives. Moreover, dental HMOs are providing employers with benefits that many hadn't anticipated. Because there are no claim forms, administrative detail is greatly reduced. Also, good managed dental care companies have customer service representatives who can handle problems and complaints, thereby relieving beleaguered benefits managers of a difficult task.

A need to save It was the need to cut costs, however, that initially prompted the Chicago Public Schools to offer managed dental care to employees. "In 1990, the school system faced a budget crisis. Our decision to go with a managed care dental plan was purely a cost containment move," says Nancy Pendry, manager of employee benefits for the system, which covers 43,000 lives.

The school system switched from an indemnity plan to a new type of dual-option plan. Employees may choose fee-for-service coverage, which provides fewer benefits than their former indemnity plan. They can also select a dental HMO, which offers more benefits than either the old or new fee-for-service plans.

The dental HMO requires no deductible and covers 100% of services for the first $1,000 of care. After that, the plan pays for all preventive and basic services, such as filling cavities, 80% of the cost of restorative work, and 50% of major work, such as bridgework and dentures. School employees pay no premiums for their own coverage. Their dependents are covered only under the managed option, Pendry says.

Today, 24% of employees are enrolled in the managed dental plan, she says. More employees are joining as the network expands. As for savings, the switch to a plan that provided managed dental care saved the school system $4 million in the first year, and at least as much in subsequent years, she reports.

Unlike Pendry, Mary Kay Prout, director of human resources for the Ocean Grand Hotel, located in Palm Beach, Fla., says cost containment wasn't the main reason she decided to offer employees a dental HMO in 1992. In fact, she did so to offer an affordable and accessible benefit to current and prospective employees.

About 50% of employees at the hotel speak little English, Prout says. What's more, many employees do not have much experience with the health care system. They have had tremendous difficulty dealing with deductibles and claim forms.

Now, employees who opt for dental coverage may choose fee-for-service or managed care. All but three of the 250 employees who currently have dental coverage have chosen the HMO. Because the plan has no deductibles, copayments, or claim forms, it is very popular. It's a powerful employment and retention tool, Prout says. "Whatever we can do to reduce turnover is a positive. We believe this plan is having an effect."

Savings first

Managed dental care is also popular at the Community Hospital of Central California, in Fresno, which has had dental benefits "for as long as we have had insurance," says Patty Graves, benefits technician. Five years ago, the hospital decided to add managed dental to reduce expenditures and to lower costs for the 3,200 employees who had dental coverage, she says.

"The biggest drawback of the managed dental plan has been a limited panel of dentists from which to choose," she says. "The problem is that many dentists here have been unwilling to accept managed care."

The small provider selection has not stopped hospital employees from joining the HMO, however. About one-third of employees use the dental HMO each year, Graves reports. "Usually, people sign up with the managed plan because they have a greater need for care. They may also wish to have coverage for orthodontics or other more expensive services," she says.

Graves says the dental HMO has reduced her administrative burdens. Not having to deal with eligibility requirements or process claim forms has made her job easier.

Most employees choose managed dental options to get more coverage for less out-of-pocket cost. They also want to be rid of deductibles and claim forms. Some like the fact that network dentists initially are evaluated and usually must participate in quality assurance programs.

Members of the teacher's union of the Dade County, Fla., public school system have been enjoying the benefits of managed dental care for almost two decades, since 1975. "Usually, when you introduce something new, there are bugs to work out," says Susan Weiner, assistant superintendent of the school system's office of risk and benefit management. "But we've had managed dental for so long that there are now very few problems,"

Today, she says, the school system's 30,000 employees can choose from three dental options-two managed plans and an indemnity plan. Employees pay nothing for their own coverage in any of the plans. They must contribute either $15 or $17 per month for family coverage in the managed options, or about $28 per month for family coverage in the indemnity plan.