Preventing dentists from outsourcing nonclinical tasks to dental support organizations (DSOs) would limit dental practice efficiency and patients’ choice of providers, a study by the American Legislative Exchange Council (ALEC) reports.
DSOs perform nonclinical functions on behalf of dentists, including accounting, billing, payroll, marketing, compliance monitoring, and information technology services.
Studies have found DSO-supported practices charge an average of 11 percent less for non-Medicaid patients than non-DSO-supported practices, and DSO-supported practices can cost 32 percent less per Medicaid patient to operate, states the February report, “Overregulation Threatens Market-Driven Solutions in Dentistry.”
In recent years, state dental boards in Maryland, North Carolina, Texas, and Wisconsin have tried to pass anticompetitive legislation, including restrictions that would make it harder for dentists to work with DSOs, according to the report.
“[S]ome state dental boards have either directly via their regulatory authority or through the legislative process, sought to restrict or limit a dentist’s ability to contract with a DSO for non-clinical support services,” the report states. “This had led to both legal and public policy concerns about anti-competitive behavior.”
Bill Head, vice president of government affairs at the Association of Dental Support Organizations, says solo practitioners are trying to limit competitors by imposing regulations on larger practices.
“Solo dental practices see the DSO model as a threat,” Head said. “They have convinced legislators in some states to pursue legislation that would either seek to limit the administrative services a DSO can provide or empower the state dental board to regulate them, ostensibly in the name of public safety, despite no empirical evidence that such action is necessary.”
State dental board opposition to DSOs is driven by special interests, says Dave King, senior vice president for human resources and communications at Benevis, a DSO supporting hundreds of practices.
“With few exceptions, these dental boards merely serve to protect the incumbent dentist in the market,” King said. “They view us as Home Depot coming to town and running out the Ace Hardware, and Walmart running out the five-and-dime.”
Claims by state dental boards that DSOs put patients at risk lack evidence, King says.
“What they constantly try to do is put in regulations that they claim are consumer protectionist, to protect consumers from harm,” King said. “Yet, they offer no evidence whatsoever that dental support organizations harm the general public, have any more complaints than other dentists, or have any more [disciplinary] board actions than other dentists.”
Serving the Underserved
The largest dental clinical organization Benevis services is Kool Smiles. Since opening in 2002, Kool Smiles has treated more than 16 million patients in its 124 offices in 16 states. Approximately 90 percent of Kool Smiles’ patients are enrolled in Medicaid or the Children’s Health Insurance Program (CHIP), according to documents King provided Health Care News.
King says Kool Smiles serves a different patient base from those of most individual practices.
“Kool Smiles doesn’t typically compete against the traditional practices,” King said. “Ninety percent of our patients are patients that are largely ignored: people that Dr. Jones down the street doesn’t want to treat.”
Medicaid patients served by Kool Smiles and other Medicaid-focused DSO practices are frequently cast off by smaller practices, King says.
“[When] the typical dentist first opens up his own practice, he takes everybody because he needs every dollar and every patient,” King said. “But as his practice starts to grow and mature, he gets rid of those Medicaid and CHIP patients as soon as he can.”
Making Medicaid Work
Medicaid’s bureaucratic hoops and low reimbursement rates create a disincentive for the individual practitioner to treat Medicaid patients, King says.
“He doesn’t want to get paid 60–80 percent of what he’s getting on commercial [patients],” King said. “He doesn’t want to have to deal with Medicaid and all the bureaucracy that goes with it. He doesn’t want to have to deal with credentialing and waiting to get paid.”
The DSO model enables Kool Smiles to help Medicaid patients keep their appointments, making affiliate practices’ income streams more reliable, King says.
“One of the big problems with Medicaid is the show rates are really low,” King said. “Our call center, through technology and other means, reaches out to those folks, reminds them of their appointments, and keeps them on the schedule, so we’re able to get a little better show rate than what you see in other practices.”
Efficiency as Access?
Head says dentistry lags behind other sectors of the health care industry, which have innovated to streamline administrative tasks.
“Dentistry hasn’t yet fully modernized the administrative functions the way every other major healthcare field has, including physicians, pharmacists, and optometrists,” Head said. “DSOs are the catalyst for that modernization.”
Relieving dentists of nonclinical tasks accelerates their maturation as dental care providers, Head says.
“By freeing up a dentist’s time on administrative functions, DSOs enable dentists to have more time honing their skills and focusing on the quality of care they provide their patients,” Head said.
DSOs expand patient access by helping dentists improve their quality and efficiency, Head says.
“Since we know cost is a barrier to care, any dentist who can lower patient costs while providing quality oral health care is, by definition, expanding access,” Head said.
Michael T. Hamilton ([email protected], @MikeFreeMarket) is a Heartland Institute research fellow and managing editor of Health Care News, author of the weekly Consumer Power Report, and host of the Health Care News Podcast.
Mia Palmieri Heck, “Overregulation Threatens Market-Driven Solutions in Dentistry,” The State Factor, American Legislative Exchange Council, February 2017.
Image via Thinkstock
This article has been updated.