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Benefit Design Strategies to Better Position Your Company for the Future
March 17, 2005
Steven H. Keller, DDSVice President, Business Development
Institute for International Research, Philadelphia
POLITICS
“The gentle art of getting votes from the poor and campaign funds
from the rich, by promising to protect each from the other.”
-Oscar Ameringer
“If you are not confused by what is happening in the healthcare industry today, then you are
not thinking clearly.”
-Marc B. Cooper, D.D.S, M.S.D., C.P.C
A Clear Trends Towards PPOsDental PPOs are the fastest growing segment
in the dental benefits market.
Source: NADP
64.9 69.7
91.9101
111.4
54.1 5140.2 35.3 30.5
23.4 23.6 19.4 17.9 15.5 11.3
82.2
45.4
0
20
40
60
80
100
120
2002 2003 2004e 2005e 2006e 2007e
PPOIndemnityDHMO
Private Dental Coverage Impact on Dental Visits and Expenditures
$298.70$417.20Mean total expenditure
28.6%56.6%% with at least one visit
Without Private Dental Coverage
With Private Dental Coverage
Source: Manski, Macek, Moeller JADA 11/02
Healthcare costs are escalating
3 years of double digit medical increases
Employers are passing more dental costs to employees
Dental sales have been flat
In force subscribers increased only 1% in 2003
90% of employer groups with > 100 employees already have dental
“A Look at the U.S. Group Dental Market: Trends and Opportunities” a LIMRA-AHIP Study
“The ability to change more rapidly than the next organism
is the only sustainable competitive advantage.”
-Charles Darwin
Majority of employers (87%) offer only 1 dental plan
to their employees.
The Changing Group Insurance and Health Care Marketplace, LIMRA International, 2003
“If a man is standing in the middle of the forest speaking and there is no woman around to hear him….. is he still wrong?”
“Is it true that cannibals don’t eat clowns because they taste funny?”
“Do pediatricians play miniature golf on Wednesdays?”
-George Carlin
Triple Option Dental
Indemnity / PPO with wide access and/or high option
PPO with focused access and/or low option
DHMO
Company A2155 employees in the Baltimore/Washington areaHad PPO plan as only option in 2002Offered dual option plan 1/1/2003490 employees switched to DHMO in 20031094 employees were enrolled in DHMO in 2004
PPO DHMOSingle $27.00 $14.00Single +1 $53.00 $26.50Family $85.00 $34.00
Company A SavingsAnnual Annual Premium Savings
2002 PPO only $ 1,324,476 $ 02003 Dual Option $ 1,158,240 $ 166,2362004 Dual Option $ 973,356 $ 351,120
Voluntary Dental Plans
Growing nationallyResponse to rising medical costsMore virgin groupsMinimal participation levelsWorksite marketing
Self Funded Plans18% overall 46% with 500-999 employees56% with 1,000-4,999 employees69% with >5,000 employees
The Changing Group Insurance and Healthcare Marketplace, LIMRA International, 2003
Consumer Friendly IdeasFull benefits schedule onlineDirectory of dentists online Email accessReal person answering the phoneLimit or eliminate pre-authorizations for specialty careAnswer common questions on the web Download forms
“You should not confuse your career with your life.”
“No matter what happens, somebody will find a way to take it too seriously.”
“There is a fine line between ‘hobby’ and ‘mental illness’.”
“Never, under any circumstances, take a sleeping pill and laxative on the same night.”
“Your friends love you anyway.”
“Things It Took Me 50 Years to Learn” –Dave Barry
Dentist Friendly IdeasCheck eligibility online in real timeElectronically submit claimsCheck fees by ADA codeLimit or eliminate pre-authorization for specialty careAnnually review of MAC fees on PPO’sAnnually review capitation and copays on DHMO’s
“I think there is world market for maybe five computers.”
–Thomas Watson, Chairman of IBM, 1943
“640K ought to be enough for anybody.”
-Bill Gates, 1981
Definition of “Wellness”“Wellness”
A health care process that fosters awareness, influences attitudes, and identifies alternatives to unhealthy lifestyles so that individuals can make informed choices and change their behavior to achieve optimum physical and mental health.
Medical Costs of Chronic DiseasesTreating Dental Disease Costs Over $65 Billion Annually
National Center for Chronic Disease Prevention
0
50
100
150
200
250
CV & Stroke Dental Cancer Diabetes Arthritis
Interventions “DQV’s Wellness Approach”TODAY’S DENTAL
BENEFITS1950’s ScienceSurgical Repair– Anesthesia– Fillings– Root Canals– Gum Surgery– Crowns– Dentures– Extractions
TOMORROW’S DENTAL BENEFITS
21st Century ScienceMedical Healing & Wellness– Remineralization to heal
tooth decay– Medicine to heal gum
disease– Treating perio in expectant
mothers reduces pre-term deliveries
– Treating perio in diabetics lowers disease
Tomorrow’s Science Today’s Benefit Plan