And the Big Winner Is . . .
A recent article in the ADA journal began with the following thought: "It has been argued that a reversal of economic incentives to dentists under the traditional fee-for-service system might be effective in reducing the cost of dental care in the United States." There followed a sentence written in plainer English: "Advocates of such changes see a need to transfer the financial risks of the system from the purchasers to the providers of care."
A brief glossary of terms is still needed:
Advocates = government agencies, third-party dental insurers, closed-panel operators, unions.
Financial risks = your fees x amount of dentistry performed.
Purchasers = advocates.
Providers of care = you.
Simply stated, the "advocates" believe that the way to control health-care costs is to fix professional fees and hospital charges at a lower-than-market level. The carrot at the end of the stick for professionals is the suggestion that there will be increased numbers of patients. Dentists have been falling for this for years. Recollect the ADA's own Delta Dental Plans that opted for lower fee schedules, closed panels of participating dentists, and coinsurance by dentists. The fact is that dentistry--and orthodontics--are not insurable. They are only prepayable. In the case of orthodontics, you can't insure an attractive service that almost everyone wants and needs. Limitations have to be placed on the amount of service and/or the amount of the fee. Although involving the patient in payment of some portion of the fee is a cost-controlling device, "advocates" would rather that patients paid nothing beyond their insurance premium. When that is the case, there must be either a further limitation on the service or an even lower fee or both.
Freedom of choice by the patient of physician, dentist, or orthodontist has been the backbone of the American private health-care system. Indeed, as recently as 1984, 96% of commercial health insurance plans were free-choice plans. By 1987, the percentage had fallen to 40%. It will be eroded further, and we may soon see the total demise of free choice in commercial insurance programs. The reason is that it is the only way that insurance companies can continue to offer dental insurance and control the cost. The substitute for free choice is closed-panel dentistry--dentists who sign up to participate in insurance company and other programs, again trading promised increased numbers of patients for lower fees. Participants may be referred to euphemistically as "preferred providers". It was encouraging to read in the ADA journal that Washington state recently enacted a freedom of choice law. However, only 16 states have such laws. Dentists in states that do not have such laws should be lobbying their state legislatures for their enactment.
Relative Value
It was recently reported in the New York Times that a congressional committee has recommended that Medicare payments to physicians be based on a fee schedule that would reflect the relative value of various medical procedures and of various specialties. Payments would be based on time, training, effort, and cost of various procedures performed by efficient physicians. Efficient physicians could very well be those who work fastest and with the lowest overhead, using the lowest-priced materials.
Training can only be evaluated on the basis of level reached. It would be impossible to evaluate what the relative strengths of various educational institutions may be or what each student got out of the training. A decision on the amount of effort is just a decision on someone's part that this procedure is harder than that one. Indeed, there is a yearning in many quarters to arrive at a computer program that will supply an appropriate treatment plan and fee for all procedures. Yet everyone has experienced a simple procedure that became complicated or a difficult procedure that went 1, 2, 3.
Some adjustment might be made for geographical differences, but relative value formulas have the same shortcomings as all restrictive fee schedules. They fail to take into account the personal relationship between doctor and patient, time spent developing and nurturing that relationship, quality of learning, variable levels of competence, variable consistency in results, extent of ongoing improvement, after-hours dedication to patient welfare, and probably a great many more intangibles. On top of all that is the impossibility of comparing apples and oranges--trying to set a relative value on procedures and specialties when relative value is in the eyes of the owner of the problem.
Relative value is just a formula to permit a government or commercial agency to simplify and minimize professional fees. In the end, it reduces the whole concept to the dollar value of 1--that is, the dollar value placed on the lowest value procedure. Everything else is a multiple of that. It lends itself to the manipulation of all fees merely by the adjustment of one number--up or down.
The relative-value concept has surfaced before in dentistry. If medicine accepts the concept-- and the AMA has supported relative value as a "scientific" way of determining fees--it might easily find support in dentistry. There is not now a great deal of orthodontic treatment being paid for by the federal government, but the concept could become a mode in state welfare programs and in insurance contracts, where it would have a sizable effect on orthodontics. Inevitably, this is a cost-control mechanism aimed at the lowest-cost, minimally satisfactory treatment. It is not the level that most orthodontists are aiming for.
Cost-Accounting Fees
In a related area, many orthodontists would find it appealing to establish a cost-accounting basis for orthodontic fees. They are uneasy over less precise ways of determining fees. This is another beguiling search for a "scientific" method of determining fees. The shortcomings of cost-accounting plans for health care are the same as those for relative value. They cannot account for the intangibles and they lend themselves to cost cutting, corner cutting, and shortchanging of the public. It is also incongruous to apply cost accounting to the determination of the fee and not to the delivery of the service, yet that is exactly the position orthodontists would be likely to be in. I never heard of an orthodontist who decided that a bracket or an archwire could not be replaced because its cost was not factored into the fee. If the one ever leads to the other, we will most assuredly no longer be a profession.
Market Value
As long as we operate in a democratic, capitalistic society, the market is the proper place to determine fees. How much do buyers value our service? That is the best way to regulate fees and services. Despite what bureaucrats may say about alleged restraint of trade or making sure that consumers are fully informed, there will always be an element of trust between doctor and patient. Orthodontics and virtually all health care cannot always be fully understood by lay people. Patients should be encouraged to participate in health-care decisions, but responsible professional advice and guidance is an essential part of the equation. If that were not the case, there would be little need for professional education.
Part of an orthodontist's covenant with the people is that patient welfare comes first. Responsible, ethical practitioners--and that includes the vast majority of orthodontists--act in the public interest in terms of patient care, maintaining competence, and setting fees. However, contributing to the bottom line of insurance company financial statements and surrendering professional prerogatives to businesses that have moved into health care are not in our self-interest or in the interest of better health care.
If this occurs in medicine and then general dentistry, it might then be time to consider whether orthodontics should refuse to be dragged along simply because we have been attached to the process for so long. If third-party payments approach 40% of orthodontists' incomes--they controlled 25% in the last JCO Practice Study (1987)--there will be an urgent need to reevaluate our position. There may still be time to jump into a lifeboat, rather than go down with the ship. However, take heart. Help may be on the way. A recent study showed up to a 10% higher mortality rate in the hospitals that were most cost-conscious. If people extrapolate that down the line of health care, they may be more inclined to resist the third-party blandishments of placing price before quality in dentistry and in orthodontics. This is an unfortunate way to find out what many have suspected all along: You cannot sacrifice the nation's health care on a cross of gold.
These various schemes are euphemistically called incentives. We generally think of incentives as instigators toward achievement of some higher goal. Looking at all these schemes to control health-care costs that are espoused by the government, insurance companies, and other purchasers of dental care, their incentives are aimed at reducing fees, reducing the amount of service rendered, and reducing standards of treatment from high quality to minimum satisfactory. Stay tuned.