The document discusses various mechanisms for paying for dental care, including: 1. Private fee-for-service, the traditional model where patients pay providers directly. This remains popular but limits access for many. 2. Prepayment plans like insurance, where a third party pays providers on behalf of subscribers. This includes commercial plans, non-profit Delta Dental plans, and prepaid group practices. 3. Public programs like Medicaid provide dental coverage for specific groups but have limitations in eligibility and coverage. Overall the document analyzes different payment systems and their ability to improve access to dental care.

1. Nazakat Ali Naik

2. INTRODUCTION
• Health care services traditionally have been provided on a fee for service basis
whereby the patients receive specific services and pay the provider for them
directly.
• As the costs of health care continue to rise, methods will be sought to ease
costs either by legislation or by the development of a variety of funding
approaches.
• Health for all by the year 2000 A.D is the goal of WHO.
• However in a developing country like India, the oral health status of the
population still remains very poor. As the costs of dental care continuous to
rise, the majority of the people cannot afford dental treatment, especially
when it is being provided on a fee for service basis.

3. MECHANISM OF PAYMENT FOR DENTAL CARE
The mechanisms by which dental practitioners receive payment
for their services can be grouped into:-
1. Private fee for service.
2. Post payment plans.
3. Private third party prepayment plans
• Commercial insurance companies
• Non profit health service corporations
E.g.: Delta dental plans, blue cross /blue shield
• Prepaid group practice
• Capitation plans
4. Salary
5. Public programs.

4. PRIVATE FEE FOR SERVICE
• Private fee for service, the two party arrangements, is the traditional form of
reimbursement for dental services.
• Dentists overwhelming prefer to practice under this arrangement and the ADA
defends fee for service as the most efficient way of providing dental care.
• Fee for service care is an integral part of private practice as a delivery method.
Advantages:-
• Culturally acceptable
• This system is flexible. Fees can be changed in accordance with market
conditions and the dentist is also able to practice what is called ‘’ price
discrimination’
• It is administratively simple.
• It is the only system under which some form of dental care likely will ever be
provided.

5. Disadvantages:-
• However, despite the flexibility and price discrimination, there
are still some potential patients who cannot afford dental care.
• These persons would fee for service were the only financing
mechanism for dental care.

6. POST PAYMENT PLANS
• Post payment or budget payment plans are mechanisms for the individual
purchase of service.
• While dentists have frequency arranged to allow payment for dental care be
made at intervals over a period of time this first step to offer this service through
organised dental society plan were taken in the late 1930’s by local dental society
in Pennsylvania and Michigan.
• Under the budget payment plan, the patient borrows money from a bank or
some finance company to pay the dentists fee.

7. POST PAYMENT PLANS
• After the application is approved by the lending institute the dentist is paid the entire fee. The
patient then repays the loan to the bank in budgeted amounts.
• At the time that they had been developed it was hoped that this would benefit large segments of
population, but they have do so as it was used primarily by the income group.
• The problems were associated with defaulted loans and low income patients would also have more
difficulty being accepted as credit worthy by lending institutions.

8. PRIVATE THIRD PARTY PREPAYMENT PLANS
• It is defined as ‘’payment for services by some agency rather than directly by the
beneficiary of those services’’.
• The dentist and the patient are the first and second parties and the administrator of
finances is the third party, defined as the party to a dental prepayment contract that
may collect premiums, assume financial risks, pay claims and provide administrative
services.
• The third party is also known as the carrier, insurer, underwriter or administrative
agent. Usually the term ‘’third party’’ refers to a private carrier such as an insurance
company.

9. • The economic consequences of this trend are just beginning to be felt in dentistry,
but have been at work in medical care for a long time. It has been practised in US,
Middle East countries, etc.
• Earlier dental care was considered uninsurable by carriers. This reasoning was based
on the assumption that the very nature of dental need violated the basic principles of
the insurance. To be insurable, a risk must
1. Be precisely definable
2. Be of sufficient magnitude that if it occurs, it constitutes a major loss.
3. Be infrequent.
4. Be of unwanted nature
5. Be beyond the control of individuals
6. Not constitute a ‘’moral hazard’’.

10. • Since illness is not predictable, insurance carriers have found ways to get around these
problems, by offering different types of payments like
1. Deductible
2. Co insurance
3. Group insurance
Deductible: -
It is a stipulated flat sum that the patient must pay toward the cost of treatment before
benefits of the program go into effect. It is sometimes called a ‘’ front end payment’’.

11. Co insurance:-
• It is also called as co payment. It means that the patient pays a percentage of the total
cost of treatment.
• Dunning defined co insurance as an arrangement under which a carrier and the
beneficiary are each liable for a share of the cost of the dental services provided.
• Insurance carriers limit the range of health care services covered. This is termed,
‘’limitation of benefits’’. Co insurance helps to keep premiums down.
Group insurance:-
• Health insurance is a first offered only to group.
• This is because illness experience is reasonably predictable in a group.
• The probability of adverse selection was also reduced by the use of waiting periods after
enrolment before any benefits become available. The waiting period ensured that
persons with existing disease were not simply going to use the plan to have that disease
treated and then drop out.

12. REIMBURSEMENT OF DENTISTS IN PREPAYMENT PLANS:
• The ADA has consistently supported the concept of usual, customary and reasonably
(UCR) fee as the preferred method for imbursement for dentist in prepayment plans.
• Apart from UCR fees, the only other form of payment plans is table allowance.
• Prepayment plans can be subdivided into 4 types.
1. Commercial insurance plans
2. Delta dental plans
3. Prepaid group practice
4. Capitation plans

13. Commercial insurance plans
Characteristics:-
• They can be more selective about the group to which it chooses to offer dental
insurance.
• They claim no obligation toward the dental health of the community.
• They sometimes arrange an indemnity program that provides specific for cash payment
reimbursement for specified covered services.
• Commercial insurance companies also organize their levels of reimbursement
differently.
• Commercial companies also do not conduct fee audits and post treatment dental
examinations.

14. • Commercial insurance companies can compete successfully because their expertise in
promotion and marketing allows them to present attractive total health package plans
to potential purchasers.
• Their large financial reserves also allows them, if necessary, to offer a reduced dental
premium to a particular group as a ‘’ loss – leader’’ in order to get a toe hold on the
market.
• However, since they operate for profit, they charge higher premiums.

15. Delta dental plans:-
• Delta dental plan is synonymous with dental service corporation.
• A dental service corporation is legally constituted non- profit organisation incorporated
on a state by state basis and sponsored by a constituent dental society to negotiate an
administrator contract for dental care.
• They are usually subjected to the insurance law of the state in which they are
constituted.
• The National Association of Dental Service Plans (NADSP) was formed in June 1966
with the help from ADA.
• The NADSP changed its name to Delta Dental Plans Association in April 1969.
• The underlying philosophy of the Delta Dental Plans is that the dental practitioners can
adapt their traditional practice to meet the demand for group purchase of dental care.

16. • The majority of the board of directors of most Delta Plans are dentist. Other board
members represent the worlds of finance, insurance and consumer groups.
• The Delta Plans have specific approaches to insure the quality of care provided and
to keep a program’s cost within its limits.
• Quality of care is monitored to insure that
• The care claimed and paid for has in fact been provided.
• It is of ‘’acceptable ‘’ quality.

17. Reimbursement of dentists in delta plans
• Delta dental plans almost exclusively use the UCR concept.
• The way in which a dentist is participating or none participating in the plan.
• A participating in the plan.
• A participating dentist is defined as any duty licensed dentist with whom a Delta plan
has a contractual agreement to render care to covered subscribes.
• Non participating dentist can also treat patients covered under Delta Dental Plan.
They are paid at a considerably lower percentile than 90th, often at the median or 50th
percentile.
• They however do not need to profile their fees and are not subject to fee audits.
• In comparison to the giants of the commercial insurance world, the Delta Plans are
small.
• Yet they have managed to grow to a healthy state and to compete successfully in a
highly competitive market place.

18. Dentist practipating in the plan have to agree to the
following conditions :
1. Pre-filling of their usual and customary fees.
2. Acceptance of payment for their services at 90th
percentile of fees as payment in full.
3. Fee audits by auditors from Delta plan, who may
check their office records from time to time.
4. Post-treatment inspection of randomly chosen
patients to monitor the quality of care.
5.The withholding of a small amount of each fee to go
into the Delta capital reserve fund.

19. Health service corporations
• The health service corporations , of which blue cross / blue shield is the most important,
have for years offered limited dental coverage as a part of medical policies.
• Dental coverage was usually limited to servicers provided in a hospital.
• Health service corporations showed no enthusiasm for going any further into dental
prepayment on the grounds that it was a poor insurance risk, but their attitude changed
once dental prepayment was shown too feasible.
• Blue cross/ blue shield dental plans have adopted many of the cost control features
pioneered by delta plans.

20. Prepaid group practice
• It is the term given to a group practice that provides dental services on a prepaid basis.
Such groups are now generally regarded as open panels, though this has not always been
so.
• ADA (1969) has defined grouped practice as ‘’group practice is that type of dental
practice in which dentists, sometimes in association with members of other health
professions agree formally themselves on certain central arrangement designed to
provide efficient dental health service’’.
• According to the U.S Public Health Service (1971) , ‘’A group dental practice is defined as
a practice formally organised to provide dental care through the services of three or
more dentists using office space, equipment and/or personnel jointly’’.
• General practice groups composed entirely of general practitioners.
• Single speciality groups all members of the group are of the same speciality.
• Multi speciality groups certain practitioners in two or more speciality fields of practice.

21. • The advantages of for the dentist who practices in group are;
• It provides better ways of organizing one’s life.
• There is less disruption in the practice caused by illness to a dentist.
• Quality of care is said to be improved because of the built in peer review.
• Financial fringe benefits such as sick leave and pension plans can be built into a
group organisation more readily, thus easing the day to day economic concerns of
dental practice.
• Most group practises treat patients on the traditional fee for service basis and only a
few administer prepaid programs. Some of these group practises operate as closed
panels. Closed panel practise under a prepayment plan is defined by the ADA as
existing if patients eligible for dental services in a public or private program can
receive these services only at specified facilities from a limited number of dentists.

22. • It has been charged that closed panel clinics are unethical and that they deliver
care of inadequate quality. However , other are of the opinion on that dentistry
opposition to closed panels is because dentists are more concerned about the
possible loss of their patients to the closed panel.
• A legitimate concern is who controls a closed panel practise. If a union sets up a
dental care facility, lay persons may administer it to the extent that the lay
administrators dictate some areas of clinical management. In such facility dentists
could be instructed to extract the teeth and provide dentures to adult patients,
rather than to exercise their clinical judgement.
• Three features according to the definition of the U.S Public Health Service
characterise open panel practise, considered acceptable by the dental profession,
• Any licensed dentist may participate.
• The beneficiary has choice from among all licensed dentists
• The dentist may accept or refuse any beneficiary.

23. Capitation plans
• The basis of capitation is that the contrasting provides whether a Health Maintenance
Organisation (HMO), group practise.
• The Independent Practise Association (IPA) or individual dentist receives an
established, negotiated sum on monthly or yearly basis for each eligible patient. The
money is paid regardless of whether the patient utilizes care or not. In return, the
patient is entitled to receive a prescribed set of services over a specified period.
• Apart from the development of HMO’s, other third party carriers and even private
entrepreneurs are becoming involved in the marketing of capitation plans. Some have
‘open enrolment’ meaning that plans are not purchased by specified groups but that an
individual can try in. Many of these offer only limited services (such as examination,
prophylaxis, radiographs and treatment plan) and may be more saleable to participating
dentists because the risk assumed is low. In areas where there is a real or perceived
oversupply of dentists, these capitation plans could be attractive to both purchaser and
provider.

24. SALARY
Dentists in same group practised those in the armed forces and those employed by
public agencies are salaried.
Advantages:-
• It allows a dentist to be largely free of the business concerns of running a practise,
thereby allowing the dentist to concentrate on clinical matters.
• Fringe benefits are also often attractive.
Disadvantages:-
There could be a lack of financial incentive that some dentists, need to be highly
productive.

25. PUBLIC PROGRAMS
• Private practise is usually not able to meet the dental demands of all people. There are
therefore a number of public programs aimed at meeting the needs of specific groups of
recipients in the diverse society
• The public programs are sponsored by the government and also include community
health centres.
1. MEDICARE
2. MEDICAID
3. THE Veterans Administration (VA) program.
4. National health insurance

26. Medicare
• Title xviii of the social security amendments of 1965 is the program known as
‘’Medicare’’. This program removed all financial barriers for hospital and physician
services for all persons aged 65 and over, regardless of their financial means. By the
1970s, Medicare has 2 parts
• Part A, Hospital Insurance
• Part B, supplemental medical Insurance.
• Both parts contain a highly complex series of service benefits available and both parts
also require some payment by the patients.
• Medicare was brought into being because the voluntary health insurance system was
unable to provide adequately for persons over age 65. The medical assistance to the
aged (MAA) program of 1966 attempted to low income of persons aged 65 and older,
but was too cautious to be successful.
• The dental segment of Medicare is limited to those services requiring hospitalization
for treatment, usually surgical treatment, usually surgical treatment for fractures and
cancer and hence constitutes a negligible proportion of the program.

27. Medicaid
• It is the name given to title xix of the social security amendments of 1965. The
original intent of the program was to provide funds to meet the health care needs of
all indigent and medically indigent persons.
• Medicaid is a joint federal state program. In order to qualify for the federal
governments share of Medicaid financing , every state Medicaid program must cover
at least theses basic services ,
• In patient hospital care
• Outpatient hospital care
• Laboratory and x-ray services
• Skilled nursing facility services
• Home health services for individuals aged 21 years and older.
• Early and periodic screening ,diagnosis and treatment (EPDST) program for
individuals under 21 years
• Family planning services
• Physician services

28. • Dental care is not a mandatory service, except for persons under 21(part of the
EPSDT program). The ADA supported the EPDST program, enacted into law in 1968,
because for the first time a federal program mandated dental care for indigent
children. EPSDT therefore had the potential for bringing into the dental care
system, millions of indigent children and youth.
• Medicaid is an extremely complex program as it is complicated and confusing to
many people. Although the program has reached a large number of people,
inevitably there are loopholes. Certain groups such as widows under 65 and families
without children have been identified as not being eligible for benefits of Medicaid.
Therefore many persons are still unable to receive the dental care they require.

29. National health insurance
• The national health insurance was introduced by Bismarck in Germany in the 1880’s
and in Britain by Lloyd George in 1910. While humanitarianism was a factor in their
development, a more powerful stimulus was probably the awareness that a healthy
and secure society led to political stability and greater economical and industrial
strength.
• The NHI is primarily a financing mechanism by which health care services are paid
for from a publicly organized fund. Opponents of NHI said that the program would
be inflationary for care. Supporters of NHI say that while the global costs of health
care services would be likely to increase, the load would be more equitable
distributed and the end result would more likely be a healthier, more secure and
more productive society.

30. FINANCING DENTAL HEALTH SERVICES IN
INDIA
1.Fee-for service
A majority of dentist in India provide dental services on a fee
for service basis. Other facilities providing free for service are
a) Private hospitals
b) Private doctors
c) Facilities of private firms / enterprises
d) Medical education / research and training in the private
sector.

31. 2. Dental Insurance
Insurance companies have now started offering dental
insurance, which covers not only those dental treatment
which require hospitalisation, but also covers dental
check up, oral prophylaxis, restorations and dental
extractions.

32. 3. Free or discounted rates
Hospitals of State government.
Dispensaries of the State government.
Health services.
Rural and urban family welfare centers of state
government.
Facilities of various Central ministries (such as Defence
and Railways)
Facilities of Employees State Insurance Scheme 1948
[ESIS]
Facilities of Central Government Health Scheme 1954
[CGHS]
Facilities of autonomous institutions and societies

33. SUMMARY
• Private fee for service dentistry is likely to remain the predominant method financing
dental care in the foreseeable future.
• Other methods of financing care received through the private practitioner, however,
are likely to become more common.
• The traditional public health approach may need to be modified to use a mixture of
public and private funds if the dental needs of all people are to be met.
• Dental personnel can be certain that the financing of dental care is a dynamic area
with further rapid evolution still in store.