Pew report finds economic upside to midlevel providers

Dec 6, 2010

Most private-practice dentists who hire new types of dental care providers can serve more patients while maintaining or improving their financial bottom line, according to a report released December 6 by the Pew Center on the States -- the first to examine the effects of hiring hygienist or dental therapists on the productivity and profits of a private practice, according to Pew.

The study also assesses the effects of dental hygienists, who are currently employed by most dental practices. Dental therapists and hygienist-therapists are trained to perform a broader range of services -- including restorative procedures -- than hygienists.

“This report shows that hiring allied providers can produce a win-win outcome.”
— Shelly Gehshan, director, Pew
Children's Dental Campaign

The report, titled "It Takes A Team: How New Dental Providers Can Benefit Patients and Practices," applies an economic tool that Pew commissioned -- the Productivity and Profit Calculator -- to evaluate the effects for dental practices that hire one of these three allied providers. The calculator was created for Pew by Scott & Company, a California-based firm that works with organizations interested in developing or assessing new business models in healthcare, in close consultation with a panel of dentists, dental hygienists, and dental office managers, according to Pew.

The calculator tested multiple private practice scenarios: A solo, pediatric dental practice, with a dentist, two dental assistants, and administrative support; a solo, general practice, with a staff structure similar to the first scenario; and a small group practice with a dentist owner, two associate dentists, six dental assistants, and administrative support.

The calculator includes two new types of providers in addition to a registered dental hygienist. The first is the “dental therapist,” who would be certified to perform a limited set of preventive and restorative services. The second is the “hygienist-therapist,” who would have training necessary for a larger range of restorative and preventive services. These terms reflect the outlines of provider models being explored by states; however, this report is not intended to advocate for a specific type of allied provider, Pew noted.

In analyzing the calculator's findings for each private practice scenario tested, most showed that hiring new types of providers can enable a practice to expand services and see more low-income patients without experiencing a drop in profits, the report noted. Among the specific findings:

In solo dental practices devoted to serving the privately insured, adding any allied provider increased productivity and pretax profits. In every scenario tested, solo dental practices increased their earnings by a range of 17% to 54% when hiring a new provider.

In a state with an average Medicaid reimbursement rate (60% of dentists' standard fees), solo practice dentists serving only the privately insured could hire a dental therapist, shift their patient mix to 80% privately insured and 20% Medicaid patients, and still see their pretax profits increase between 6% and 7%.

In states with Medicaid reimbursement rates that are 30%, dental practices see reduced profits when they serve Medicaid enrollees. Yet even in these instances, Pew's study found that dentists fared better financially serving low-income patients with an allied provider rather than without one.

Although these scenarios represent typical dental practices, the specific impact of allied providers will differ from state to state and practice to practice. For this reason, Pew has made the Productivity and Profit Calculator accessible online to dentists and policymakers. Users can assess the potential effects of new providers by inserting data from their own dental practice to reflect the costs and market conditions in their area, as well as test the effects of providers with different scopes of service. The calculator is not intended as a business-planning tool to forecast actual profit and loss, Pew noted.

"We want to replace guesswork with data by giving dentists and policymakers a tool to help them understand the impact of new types of providers in their states," said Shelly Gehshan, director of the Pew Children's Dental Campaign, in a press release. "This report shows that hiring allied providers can produce a win-win outcome. Dentists can serve more low-income children without seeing their earnings decline."

Wayne Cottam, associate dean of community partnerships at the Arizona School of Dentistry and Oral Health, welcomed the report.

"Coupled with other emerging studies on new providers, this report should encourage an honest dialogue around what is best for the patient, the community, and the larger public," he said. "More importantly, this report brings much-needed evidence to help guide the vigorous policy discussions on this topic."

Nationwide, 17 million low-income children go without dental care each year. Multiple factors fuel this problem, including a shortage of dentists serving rural and poor communities. As a number of states consider authorizing new types of dental providers to fill this unmet need, dentists in private practice are looking at the effects of this potential change on their businesses.

The healthcare reform law enacted this year guarantees medical and dental insurance for nearly all children. This means an estimated 5.3 million more kids will secure dental coverage by the year 2014. States will be hard pressed to ensure that the supply of dental providers meets this greater need for care. New types of providers offer policymakers a sound strategy to significantly improve access for low-income and rural children, the Pew report concluded.