Employers that evaluate a dental provider network by size alone can potentially limit savings to their dental benefits plans and employees, according to benefits provider MetLife.
MetLife's new guide, Check the Label: Preventive, Diagnostic, Perio Services, offers tips for evaluating the value proposition of dental provider networks.
“While a large network is important with the access and potential savings it provides to employees, you should look beyond these numbers alone,” said Alan Hirschberg, vice president of MetLife Dental Products. “It is important to know whether the network size and the negotiated fees with each dentist are actually driving value and savings for your company. To do this, look at the effective discount, which takes into account a network's level of discounts and how often they're used.”
“It’s the combination of having the dentists that employees want to see, at competitive fees, that matters most to producing savings for the benefit plan and increasing employee satisfaction,” Hirschberg noted.
Determining Network Size
While network size is important to ensure appropriate access, size comparisons might overlook differences such as counting methodology, file maintenance and use of dentists in the network. Because there is no industry standard for counting network dentists, Hirschberg emphasized the importance of understanding what the numbers represent—and to consider if a dentist has significant patient volume or capacity for growth.
Determining In-Network Fee Discounts
When comparing negotiated in-network fees (i.e., discounts) among multiple provider networks, look beyond the basic numbers to understand if and how the negotiated fees drive the dental plan’s value and savings, Hirschberg recommended. For example, what are fees based on? Is the same denominator (ideally, the actual average area charges) being used when comparing networks?
Determining Effective Discount
Benefits managers should take their network analyses further to understand how the needs and behaviors of their employees align with how carriers balance network size, negotiated fees and utilization for effective discounts, said Hirschberg. For instance:
• Does the network provide good access and strong negotiated fees but have weak utilization because of other factors (e.g., plan design)?
• Would growing the network in certain areas increase or decrease effective discounts?
“Obviously, it is important to have a dental network that offers employees choice and location convenience, but there are many other criteria to evaluate in order to optimize plan value and employee savings and satisfaction. Like many big purchase decisions, it pays to ‘check the label’ up front,” Hirschberg advised.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Dental Benefits Undervalued Without Effective Communication, SHRM Online Benefits Discipline, August 2009
Small-Business Tips for Building Competitive Benefits Programs, SHRM Online Benefits Discipline, July 2009
Put New Teeth in Dental Coverage, Report Recommends, HR News, March 2008
Request for Proposal (RFP)--Managed Dental Plan, SHRM Online Benefits Discipline, November 2007
Smile, You’ve Got Options: The Future of Dental Benefits, HR Magazine, November 2004
SHRM Online Benefits Discipline