FINANCE IN DENTAL

CARE

GUIDED BY SUBMITTED BY
Dr. ROSINA BHATRAI GAURAV KUMAR SAH
Dr. SANTOSH ADHIKARI ROLL NO: 22
DEPARTMENGT OF COMMUNITY
DENTISTRY

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 CONTENTS
INTRODUCTION
WHY
MECHANISM OF PAYMENTS
FINANCING DENTAL CARE IN NEPAL
CONCLUSION

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 MCQs
1. Which one is two-party payment
method?
a. Public programmes
b. Post payment plans
c. Private fee- for service
d. Private third party prepayment
plans
2. Which is the traditional method for
payment?
a. Public programmes
b. Post payment plans
c. Private fee- for service 3
3. The third party is also known as
a. Carrier b. Insurer
c. Administrative agent d. All of the above

4. Post payment plans was first introduced in

a. 1940s b. 1910s
c. Recently d. 1930s

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FINANCE: Process of raising funds or capital
for any kind of expenditure.

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 INTRODUCTION
Traditionally health care services have
been provided as a fee for service where
by the patients receives specific services
and pays the provider for them directly.

As the costs of health care continues to rise,

methods are been sought to ease costs either
by legislation or by development of a variety
of funding approaches

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WHY?
Increase in health care cost due to:
 Increasing demand
 Ever-growing technology
 Lack of incentives in medical care to
keep down costs
 Higher quality of care
 General inflation
 Third party payment

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MECHANISM OF
PAYMENTS
1. Private fee - for services
2. Post payment plans
3. Private third party service plans
a. Commercial insurance companies
b. Non profit health service corporations
c. Prepaid group practice
d. Capitation plans
4. Salary
5.Public programs
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PRIVATE FEE - FOR -
SERVICE
 Private fee for service, the two party
arrangement is the traditional form of
reimbursement for dental services.
 Dentists overwhelmingly prefer to
practice under this arrangement and
considered as most efficient way of
providing dental care.

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ADVANTAGES AND DISADVANTAGES

ADVANTAGES DISADVANTAGES
 Culturally acceptable  Though flexibility and
price discrimination
 Flexibility - price
exist , there are still
discrimination - Robin some potential
hood approach patients who simply
 Administratively simple cannot afford the
 It is the only system in dental care offered if
which some form of private fee for service
were to be the only
dental care likely will
financing mechanism
ever be provided
for dental care.

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POST PAYMENT PLANS
 First introduced in late 1930's by local dental
societies in Pennsylvania & Michigan
 Here, the patient borrows money from a
bank or finance company to pay dentist’s
fee. After the application is approved by the
lending institute, dentist is paid entire fee.
Patient then repays the loan to the bank
 Mechanisms for the individual purchase of
service

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DISADVANTAGES
 Was used more by middle-income group
then low-income group
 Low-income group people were not
considered credit worthy by lending
institution

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PRIVATE THIRD PARTY
PREPAYMENT PLANS
 Defined as "Payment for services by
some agency rather than directly by
beneficiary of those services “
 The dentist and the patient are the first
and second parties & administrator of
the finances is the third party
 The third party is also known as the
carrier, insures, under writers or
administrative agent

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INSURANCE PRINCIPLES
AND DENTAL CARE
 Earlier dental care was considered
uninsurable by carriers as the nature of
dental need violated the basic principles of
insurance. To be insurable a risk must be:

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Be precisely definable.
Be of sufficient magnitude that if it occurs
it constitute a major loss.
Be infrequent
Be of an unwanted nature such as destruction of
a home through fire
Be beyond control of the individual

All health insurance violates some of these

Principles, since illness is not predictable for
the
Individual and health care is usually a wanted 15
Overcoming the deficiency:
 Having patients pay a share of costs –
deductible or co-insurance
 Limiting the range of services (coverage,
covered charges, or schedule of benefits) –
e.g. implants and cosmetic restorations not
covered
 Offering coverage only to groups – to avoid
adverse selection
 Offering coverage only to groups – to avoid
adverse selection
 Using preauthorization and annual
expenditure limit 16
Different types of payments offered by
the insurer are:
o Deductible (“front-end-payment)
o Co-insurance (co-payment)
o Group insurance

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REIMBURSEMENT OF DENTISTS
IN PAYMENT PLANS
 U.C.R. Fee
 Table of allowance
 Fee schedules
 Capitation

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U.C.R. Fee
 U- Usual
 The fee usually charged for a given
service by an individual dentist to private
patients i.e. his or usual fee. Dentist
enrolls at insurance company, a
confidential list of fee that he charges.
The company uses this information to
decide the customary fee

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• C-CUSTOMARY FEE: A FEE IS CUSTOMARY
WHEN IT IS IN THE RANGE OF THE USUAL
FEE CHARGED BY DENTISTS OF SIMILAR
TRAINING AND EXPERIENCE FOR SAME
SERVICE IN SPECIFIC AREA

•R-Reasonable: A fee is considered as reasonable if

certified by special circumstances, necessitating
extensive complex treatment

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Table of allowances
 A table of allowances is defined as a list
of covered services with an assigned
dollar amount that represents the total
obligation of the plan

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Fee schedules
 A fee schedule is defined as a list of
charges established or agreed to by a
dentist for specific dental charges

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Capitation
 It is the fixed amount paid per person
each month or year that entitles him or
her for the benefits. The amount paid
remains the same how much ever the
treatment is rendered.

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Commercial insurance companies
 They can be more selective about the
group to which it chooses to offer dental
insurance
 They claim no obligation towards the
dental health of the community
 Commercial insurance companies also
organize their level of reimbursement
differently

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•Commercial companies also do not conduct fee audits & post treatment
dental examination
•These charges higher premium in order to make profit

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Non profit health service
corporations

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• A dental service cooperation is a legally
constituted nonprofit organization incorporated
on a state- by- state basis and sponsored by a
constituent dental society to negotiate and
administer contracts for dental care

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Delta Dental Plans
 In June 1954, the Seattle District Dental
Society in Washington State was approached
by the International Longshoreman’s and
Warehouseman’s union Pacific Maritime
Association (ILWU/PMA) with a request that
the society submit a proposal for a
comprehensive dental care program for
children up to 14 years of age. This gave birth
to the first dental service cooperation

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 Co-operations grew by 1960s.
 The National Association of Dental
Service Plans (NADSP) was formed in
June 1966 .
 The NADSP changed its name to Delta
Dental Plan Association in April 1969
and the member corporations became
known as the Delta Plan for the
particular state

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Blue-Cross/Blue Shield
 Initially showed little interest in dental
prepayment as they considered it as
poor insurance risk
 The terms of benefits and administration
are similar to Delta Dental Plans

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HEALTH MAINTAINANCE
ORGANIZATION (H.M.O)
 An HMO is defined in the 1973 Act as “A
legal entity which provides a prescribed
range of health services… to each
individual who has enrolled in the
organization in return for a pre –paid,
fixed, and uniform payment”

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The H.M.O is based on ‘4’ principles:

1. It is a non-profitable organization
2. It delivers comprehensive dental care
3. It enrolls group members and families
4. It expects a ‘fixed or pre-paid’ fee.

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SALARY
 Dentists are employed by public
agencies as salaried personnel.
 Common especially in closed-panel
clinics
 Good for new graduates ; can obtain
good clinically experience

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Advantages and Disadvantages
Advantages Disadvantages
 Dentist is largely  There could be lack
free of the business of financial incentive
concerns of running for some dentists
a practice thereby who are highly
allowing him/her to productive
concentrate on
clinical matters.
 Fringe benefits
attractive.

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Public programmes
 Medicare
 Medicaid
 Children health insurance program
 The Veterans Administration Program
National
Health Insurance

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36
CONCLUSION
 The most prevalent mechanism for
payment of dental care in our country is
by “private fee- for service” method and
this method doesn’t seems to be fruitful
for every people.
 Post-payment plans, private third party
pre-payment plans, public programs
need to be encouraged in our country,
NEPAL.

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38
1. Which one is two-party payment method?
a. Public programmes
b. Post payment plans
c. Private fee- for service
d. Private third party prepayment plans
2. Which is the traditional method for payment?
a. Public programmes
b. Post payment plans
c. Private fee- for service
d. None of the above

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3. The third party is also known as
a. Carrier b. Insurer
c. Administrative agent d. All of the above

4. Post payment plans was first introduced in

a. 1940s b. 1910s
c. Recently d. 1930s

40
References
Soben Peter ( Essential of public health
dentistry)
@ ResearchGate

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