Why dentists need to fight back against corporate giants

September 27, 2018

In an era where private practice ownership is declining, more dentists are banding together to fight insurance companies and dental groups.

After watching what has happened to independent doctors over the last decade, dentists have realized that if they’re not careful, they’ll be next.

Changes in the marketplace have forced many U.S. doctors to cash in their autonomy in exchange for hospital employment or private equity firm oversight. As they became cogs in the corporate wheel, these once independent doctors have lost control over where they can refer patients, how much they get paid and how many patients they must see a day.

To dentists across America, this is a cautionary tale. As more private equity companies buy up dental practices, turning them into employees of megabrands like Heartland Dental, Aspen Dental and Smile Brands, to name a few, other dentists are rallying together to make sure they don’t suffer the same fate.

They’re not only saying no to private equity but also fighting the insipid undertow of insurance plans.

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One group of dentists in Massachusetts has banded together to fight the trend. Betrayed by their own state dental society, these independent dentists formed the Massachusetts Dentists Alliance for Quality Care.

“Over the past five years, dental insurance companies and private equity groups have extended their tentacles into the private practice of dentistry, changing the way it is financed and ultimately diverting more dollars into their pockets and far less into the pockets of those actually providing the care,” says Dr. Jill Tanzi, a Boston-based dentist and founding member of the alliance. “Quite simply, they are using the medical model as their guide to extract as much money as possible out of the dental health industry.”

The model is simple: Sew up market share, control the dentists, cut their pay, leave them no way out through binding non-compete contracts, then raise premiums.

It’s good work if you can get it.

“As we have seen from our friends in the medical field, when you allow insurance companies and large partnerships to take over healthcare, it does not end well,” Tanzi says. “Sadly we are seeing the fallout as talented doctors and dentists leave their professions in droves.”

For the Massachusetts dentists, the final straw came in December 2016. Delta Dental sent its dentists a new contract, requiring them to sign it by Jan. 6 or face a one-year lockout. The new contract would cut their already substantially reduced contracted rates by as much as 30 percent, so the cut was closer to 60 percent, Tanzi says.

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By far the largest provider of dental benefits in the state, Delta services more than 5,000 Massachusetts companies and 2.2 million members. More than 95 percent of the state’s dentists participate in the Delta plan. The dentists were over a barrel - and they’re not alone. Delta is making similar moves in other states, including Washington and Wisconsin.

While Delta argued that it needed to slash payments to dentists to “control costs,” the nonprofit was paying eight top executives over a million dollars a year in compensation. In 2015, Fay Donahue, the top executive at Dental Service of Massachusetts, Delta Dental’s parent company, made $7 million.

Meanwhile, the average dentist salary in the United States is $151,090.

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Because it’s illegal for doctors to discuss their contracted rates with other colleagues, many of the dentists felt trapped and isolated by a choice thrust at them over the holiday season. The Massachusetts Dental Society let the plan slide through.

Tanzi and her colleagues, however, didn’t sit still. They petitioned the state attorney general, and, to gain nationwide reach, joined the Association of Independent Doctors, a national nonprofit trade association that works to educate consumers, businesses and lawmakers about the importance of keeping doctors and dentists independent and out from under corporate control.

Together with AID, they pushed back through an awareness campaign educating consumers that buying dental insurance may not be the best use of their healthcare dollars, advice many financial experts would support. In fact, largely because it provides such a poor return, dental insurance tops the list of benefits employers are looking to pare back.

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“Once upon a time we encouraged patients to get dental insurance if it was available to them because it offered value, but the tide has turned,” says Dr. Kristine Grazioso, another Boston-area dentist and alliance member. As dental plan administrators pocket more premium dollars and further the divide between patients and dentists, the question employees considering buying dental insurance must ask is: Where would I like my dental dollars to go?

The campaign asks consumers to consider several factors before signing on for dental insurance, including the cost versus the benefit. Nationwide, the average annual premiums for dental coverage is $360, while two cleanings and one round of X-rays a year will cost around $284. Also, unlike medical coverage, which after a point pays 100 percent, thus providing catastrophic coverage, dental coverage caps out usually at around $1,000, after which the patient pays all.

What’s more, although 77 percent of Americans have dental coverage, more than a third of those who do don't use it. That money could be better used to fund a health savings account or flexible spending account, which lets employees put away pretax dollars for health expenses, including dental care from any dentist they want. Plus, when patients pay a dentist directly, they can negotiate a cash price.

Many medical doctors have found a similar way out. Exasperated by the tyranny of insurance companies, and of the pressure to sell out to hospitals or private equity, doctors are opting out and partnering directly with patients or employers to set up direct primary care relationships, or DPC practices. For a set monthly fee, doctors provide primary care, eliminate the middleman, greatly reduce costs, and return the practice of medicine to a relationship between the doctor and the patient - where it belongs.

As the field of medicine goes, so goes dentistry – only maybe dentists can skip the ugly middle part.