Managed care bites benefit! Dental benefits may not be extracting the same amount of dollars as core benefits, but it's still important to keep them brushed and flossed

Business & Health, May, 1991 by Martha Glaser

On the dental side, says Gribben, self-insurance is increasing among companies covering at least 500 lives, and Eicher believes that "most every company with more than 1,000 employees self-insures its dental plan, because there's little risk involved. Dental costs, after all, are fairly predictable compared with medical costs."

The economics of self-insurance work out this way, Eicher explains. Administrative costs, even for a large client, can amount to 12 to 15 percent of claims dollars. Of course, that whole amount can't be saved, but Eicher figures that with self-insurance, administrative costs can be cut in half "so the employee gets a 5 to 6 percent greater benefit."

As Ben Schechter, senior vice-president, U.S. HMO Consultants explains, a self-insured company usually contracts with a third-party administrator. "That's the simplest level." he says. "It depends on the capability of the TPA whether it's simply paying whatever comes in or is actually assessing the appropriateness of the treatment plans presented to it. There's a price: Generally, the more management you have, the more it costs." But more controls also cut the amount of inappropriate care.

What's ahead in the next few years? Most likely, more awareness on the part of employers of the dental benefit, even though it's a relatively quiet area. But as Mariconi at Hewlett Packard explains, "Like most other employers, we've been focusing on health care cost management" because of the stratospheric rise in cost. "Many of us have done a great deal of work on the medical side. . . . But once you've gotten your hospital inpatient rates down to where they're going to be--you can only do so much there--I would expect to see more employers turning their attention to dental." And inevitably, that "would mean introducing more management into dental programs."

Martha Glaser is a freelance writer and contributing editor for Drug Topics magazine.