Managed Dental Care - Preferred Dental Provider Network

Dental Cost

The paradox of rising dental costs:

  • the supply of dentist per capita has increased dramatically
  • the need for dental services has declined because of better preventive care
  • the dental claims per individual rises much faster than the general CPI

Using the economic laws of supply and demand, we would expect the cost of dental care to decrease since the supply of providers has increased and the need for service has decreases. The traditional cost control measures of plan limitations and cost shifting are not as effective as anticipated.

Preferred Dental Providers

A preferred provider network eliminates those providers that do not provide good value. Service providers are paid fees for the services performed and not paid per patient like capitation programs.

A preferred provider network of dentists can:

  • eliminate excess services
  • eliminate unnecessary services
  • negotiate a lower fee schedule
  • reward dentists based on treatment outcomes


The network manager is responsible for:

Quality Control:

  • Regularly evaluate facilities of providers
    • equipment
    • sterilization techniques
    • emergency facilities
    • administration
  • Oral or written patient surveys
    • punctuality
    • office environment
    • staff attitudes
    • communication of treatment plan
    • pain management
    • perception of treatment outcome
    • communication of expenses

Cost Control:

  • negotiate lower fees
  • adjudicate predetermination of specialty services
  • analyze claims to identify unusual practice profiles
  • removing uncooperative practitioners

Funding Models

Dental Preferred Provider Organization (PPO) - Reimbursement

A defined benefit plan with a higher level of coverage if services are provided by a preferred provider. Discounts are negotiated and passed on to plan sponsors.

Dental Preferred Provider Organization (PPO) - Capitation

A defined benefit plan with preferred providers reimbursed fixed revenue per capita from the plan sponsor. Providers accept the financial risk. If fewer service are required than profit increases. Employees are limited in their choice of dentist.