THE EDITOR'S CORNER
There is a feeling on the part of many orthodontists that third party coverage of orthodontic treatment will eventually increase and that this will solve the economic problems in orthodontic practice. However, while 48 million Americans have some form of dental insurance, case load in the average orthodontic practice is going steadily downward, at an accelerating rate for 1975, 1976, and 1977 (see Schulman, Orthodontic Economic Index--1978, June 1978 JCO).
Some insurance companies and government agencies consider orthodontics to be a cosmetic service, which limits the application of third party coverage and which prompts some orthodontists to advocate promotion of orthodontics as a health care to force an increase in third party coverage for orthodontics.
Insurance companies are in business to make money. In insuring orthodontics, they are in a difficult position. More and more, labor is desirous of receiving full service benefits. As orthodontic fees rise, the insurance company is less and less able to do this. If orthodontic demand were to escalate to include all children and adults who need treatment, which might be a reasonable target for future labor contract negotiation, insurance would not be involved any more. The insurance company would become an administrative fiscal agency, incidentally adding a cost to orthodontics. At the same time, insurance companies would increasingly become the advocates of their customers in efforts to lower orthodontic costs, and in matters of performance and quality of service.
The orthodontist is motivated to increase his patient load through the insurance mechanism which makes it easier for the patient to pay for orthodontic treatment; and he is also accommodating certain people in the community who have insurance coverage. Sometimes, in his anxiety to do these two things, the orthodontist has accepted the role of Participating Dentist in a non-profit or service benefits type of insurance program and with it has accepted restrictions of fee and requirements of administration imposed by the third party.
The patient is generally covered in a group plan through his union or his company for which dental insurance was a bargaining chip in contract negotiation. While theory may include the thought that the intention is to promote health care, and in practice it may become so, the origin of dental insurance coverage has been chiefly in the economics of labor negotiation. Since orthodontic treatment is a large dental bill to the consumer, it would be expected that people would want orthodontics to be included in their third party dental coverage, regardless of whether it was considered chiefly a cosmetic service or chiefly a health service. But, it could not be said that there has been general acceptance of orthodontics in insurance programs.
Insurance is not a magic way of creating money. It spreads the contributions to many individuals so that each may put in less, in order to offer a benefit that only some of that group will use at any one time. If all the group requires a benefit at virtually the same time, the risk element disappears and you no longer have insurance. If a substantial number of the group require the benefit at one time, it may work out all right if the company has gauged the utilization rate correctly and established a premium basis that is large enough to permit the contributions of the group to prepay the benefits that will have to be paid out, plus the cost of administering the program.
If third parties were able to generate large numbers of patients into orthodontic offices, the problem would not be with holding down orthodontists' fees. Orthodontists have demonstrated in the past that they can and do relate their fees to productivity--to the numbers of patients they treat. If third party coverage were open-ended, offering benefits to all, the question would be whether such a program could operate at any conceivable fee level.
Since the chances are that it cannot, then the insurance companies become involved in what restrictions they can place on their customers' utilization of the service. If they are too restrictive in benefits of money or service, they encounter problems with their customers because, at any level, insurance for orthodontic care is expensive to the consumer. If he must pay a substantial amount in addition, he is less likely to seek treatment. If fewer people seek treatment, the third party cannot deliver sufficient numbers of patients to keep orthodontic fees down.
If this appraisal is correct, orthodontists ought to reevaluate the prospect that third party coverage will have a substantial impact on increasing the average case load, which it has not been able to do so far, and whether, if third parties are pushed by their own economic needs, they may not be forced to be more restrictive on fee and service than we would find acceptable or workable.
