Deltanomics

Deltanomics

So my first real experience with insurance arrived just in time for my official impending departure from dental school. And at the time, I wasn’t so sure about my investing money into a scheme that would pay someone else lots of money only if I dropped dead…especially since I was only 24 years-old.

But the life insurance policy staked me collateral when I opened my own practice (the loan for 50 grand would, today, be good for about $350,000.) Seven years later, when I sent in the last ticket stub, I’d paid off the $72,000 total that was the bottom line after adding compound interest. Wheew! No more debt; Champagne anyone? Little did I know…?

And if you discount Disco, white guys with Afros, and double-knit plaid bell bottoms (for men) the early 70s weren’t so bad. The Vietnam War was finally coming to a close, the Lakers were winning 34 straight, and you could watch the best reality show ever, the Watergate hearings, almost all day and all night. Oh yeah, the average annual maximum dental insurance benefit was $1,000. In 1973, my dad bought a brand new juiced-up Camarro for $4,000. Shucks, $1000 was good for about six crowns per year.

Back in the 70s, Rosemead Blvd probably still sucked but I can remember seeing Old Yeller on the big screen that would now sit in the middle of a vacant lot that’s been blowin’ dirt for the past seven years of “intense” development. I used to think Temple City would be a neat fit for Norman Rockwell; we had soda fountains in drug stores and novelty shops that made their own candy. And even though the population hovered around only 35,000 or so, you could actually do all of your shopping without leaving town.

After paying insurance premiums for life, disability, professional overhead, worker’s comp, professional liability, personal liability, and fire policies (I know I’ve left out a few), it was awesome finding out one form of insurance could actually help generate revenue. Today’s Delta Dental started out as the California Dental Service back in the Disco Day and dentists were key in its founding.

A few weeks ago, I attended a continuing education forum provided by my stellar implant surgeon. Before the clinical presentation, one of the dentists shared an update regarding Delta Dental and the California Dental Association (CDA). I really didn’t have much of an opinion. Especially since 2008, I’ve focused on our practice’s economy, the only economy I can control. My contention was, in Temple City, I have no choice. The school system has Delta Dental coverage and the school system is why property values have been stable through some hard times; didn’t make sense tuggin’ on Superman’s cape.

So the CDA represents dentists’ interests working with Delta Dental but they have no real power. In January, Delta announced they would be cutting accepted fees for its Premier product an average eight to twelve percent, starting near the end of 2013.

The reasoning for Delta’s move goes to the economy. Employers have been forced to reduce benefits expenses; no employer group has purchased the Premier package in three years; today, Premier represents only 17% of Delta’s business in California.

Remember 1970? Naturally, things have changed. In dentistry, technology has developed materials, equipment, and approaches that have transformed the quality of care and the nature of a visit to the dentist. Delivering a high standard of care means major investments in human capital, space, and equipment, not to mention continuing education and marketing.

Today, the investments of the early 70’s have inflated some sevenfold for us all. And today, the average annual maximum dental insurance benefit remains $1,000. Higher premiums generate one-seventh the benefits. Decreasing fee reimbursement (accepted Delta fees are already the equivalent of 2003 private fees) means cheaper materials, less training, and fewer team members.

Since 2008, our practice has frozen fees; yet we’ve added jobs, retained benefits, and even devised our own Savings Plan for non-insured patients. We’ve had to suspend our Savings Plan for a while, but we’ll come back with the right numbers and make it work. We’ve experienced some serious business stress and celebrated multiple breakthroughs because we’ve taken risks.

Maybe you can remember having insurance premiums frozen; I can’t. If you were selling something and had no buyers for three years, would you consider lowering the price? Could I raise my fees, give patients one-seventh of a crown, and pay my technician less than I paid last year, even though I was already sticking to lab fees that existed ten years ago? Anyone else ever wonder why their yearly maximum dental benefit hasn’t changed since Nixon said, “I’m not a crook?”

Dental insurance was never meant to pick up the whole tab; having coverage is a benefit that helps pay the bills. It’s just that when research continues to show good oral health can mean a longer, higher quality life, it’s a shame the insurance industry can’t take a fraction of the risk small business and consumers assume just by waking up every morning.