Cost-Shifting

Many advocacy groups, the state Department of Health Services and state legislators have asked the WDA why dentists do not treat all people in need of dental care and cost-shift the losses on to private-sector patients as is done in medicine.

The WDA is the voice of the profession in Wisconsin representing approximately 3,000 or some 85 percent of all licensed dentists in Wisconsin.  As such, we are the most appropriate entity to provide an explanation for why dentists don’t cost-shift the burdens of an underfunded state Medicaid program on to private-pay patients.

1. DENTISTRY IS DEPENDENT ON THE DISCRETIONARY EXPENDITURES OF PATIENTS.

Unless in acute pain, the care being sought by most dental patients is not what they would consider “urgent” or life-threatening. Approximately 50 percent of all dental patients don’t have dental benefits, so their care expenditures are out-of-pocket.

Those who do have dental benefits find the coverage to not be a true “insurance policy” like that which exists in the medical model. Rather, it is more like a prepaid plan. It offers care up to an annual maximum dollar amount with co-pays or deductibles in addition to any costs exceeding the maximum or for procedures not covered by the plan.  These factors make dental patients very aware of the actual costs of procedures being performed.

This is not true in the medical model. Medical insurance often requires some co-pays and deductibles, but annual and lifetime limits are so high that patients generally pay little out-of-pocket for their care. Patients also perceive medical care to be more urgent and life-threatening in nature. They often are not directly involved in the payment for their care with their employers or insurance plans actually paying the bills. Over the past 20 years, it has been rare for a patient to know the actual medical charges applied to his insurance plan or the costs of services performed.

If dentists DID cost-shift the underfunded MA program on to private-sector patients, dental care costs would increase to a level that private-pay patients would have significant trouble justifying the spending of their hard-earned discretionary dollars on any dental care with the exception of urgent services.

This would lead to:

  • Delay of routine restorative and preventive dental care for the vast majority of private-sector patients.
  • Decrease in the number of private-sector patients to whom the costs for the underfunded MA program could be shifted.

Ultimately, more and more private-pay patients (a high percentage of who are elderly) would delay dental care to avoid the cost-shifting. Eventually, the system would collapse, because it could not successfully sustain itself by depending only on payments from private-pay patients in need of emergency dental services and/or private-pay patients with unlimited discretionary incomes.

The medical model is based on health insurance payment/coverage which disconnects most purchasers from their actual health care costs.

Thus, medicine and dentistry are viewed very differently by private-pay patients. Cost-shifting burdens in the medical model have been getting increased attention and are not viewed positively by many. Expanding cost-shifting into dentistry will worsen, not improve, the current situation.

Private-pay dental patients would notice more quickly and would defer care more frequently if they were faced with the burden of absorbing the cost-shifting necessary to sustain the under-funded dental MA program in Wisconsin.

2. DENTISTRY LARGELY REMAINS A PROFESSION OF SMALL BUSINESSES, WHICH MAKES IT MORE DIFFICULT FOR THE OWNER TO CALCULATE THE COST-SHIFTING NEEDED TO BE ABSORBED BY THE PRIVATE-SECTOR TO PREVENT GOING UNDER FINANCIALLY.

There is no comprehensive system of “free care” in Wisconsin. In the medical model, a “hidden tax” is implemented by hospitals and clinics in an attempt to collect the costs of absorbing enrollees from the state’s underfunded MA program.  This “hidden tax” essentially increases health care insurance costs for the rest of us (including dentists who are largely self-employed and small business owners). Eventually, this will decrease the pool of private-pay patients below what is necessary to sustain the underfunded state programs.

Dental MA patients experience barriers to care, because dentists limit their participation in the underfunded state program or choose not to participate at all and pick other (less-regulated) ways to provide charity care to patients in need.

3. THE GOVERNMENT HAS DECIDED PROVIDING HEALTH CARE (INCLUDING DENTAL) TO LOW-INCOME INDIVIDUALS IS A WORTHY GOAL, BUT HAS CHOSEN TO PAY THOSE WHO PROVIDE THAT CARE AT A RATE SUBSTANTIALLY BELOW WHAT IT COSTS TO DELIVER THOSE SERVICES.

Instead of paying providers up front for the costs of these services, the government depends on providers to either absorb the losses (this becomes increasingly difficult as rates go lower) or to do its job of “taxing” individuals to cover the costs by cost-shifting losses on to private-sector patients and/or their dental benefits plans.

The dental community believes the system would be more transparent and provide better access to dental care for those enrolled in government programs if the government would stand by its original promise and properly fund the health care programs policy-makers have established.

It should not be the job of health care providers to implement a hidden tax to fulfill promises made by the government or society as a whole. Providing quality care to MA patients is dentists’ responsibility; finding an appropriate mechanism to pay for those services is the government’s/society’s responsibility.

WDA