Parametric insurance: A captivating solution
Parametric policies, which pay based on the magnitude of an event, can bridge coverage gaps that are difficult to insure with a traditional indemnity policy.
Employers wield a great deal of power to support employee access to quality, affordable healthcare services in a convenient manner. Recent surveys show that dentists, physicians, and employers agree on the importance of access to oral health benefits, and patients value the connection between oral health and overall health.1 When evaluating the ability of employees to access oral healthcare, network size—the number of contracted dentists within a network—is not the only, nor necessarily the best, indicator of value. According to quarterly reports produced by the federal Health Resources and Services Administration (HRSA), dental Health Provider Shortage Areas (HPSAs) exist in all 50 U.S. states and many U.S. territories, indicating that while oral health services are in demand, there are areas where provider resource needs may be unmet.2
As a practical matter, employees value the ability to balance the cost of services with the amount of time they dedicate to obtaining them and the quality of services they receive. This white paper poses three strategic questions for employers to discuss with an incumbent dental plan, or during a request for proposals (RFP) or contracting process with potential dental plan administrators.
Geographic access to providers may be measured in different ways. This can depend on the tool or software the dental carrier uses to measure the geographic distribution of contracted providers, and the availability of geographic data about a given population of employees. “Geographic access” evaluates how many or what proportion of employees meet a certain criterion relative to the number of contracted dentists in a geographic radius, or proximity to a ZIP Code. By defining what is considered adequate or sufficient access—for example, two general dentists in a 10-mile radius of an employee’s address—an employer can start to understand how accessible a network is for its employees. Measuring geographic access doesn’t have to always utilize home addresses, as employers could consider access around their office locations as well.
While both methods are used to assess network adequacy, the Driving Distance method gives a practical, patient-friendly representation of the provider’s proximity and may be more useful to employers evaluating geoaccess standards.
A separate but related challenge with measuring access is the counting method that carriers use to quantify the number of dentists in a geographic area. Employers should request that carriers provide insight into their counting methodologies; do they count unique providers—i.e., each dentist counts as one provider—or provider access points, which may count multiple locations in which a single provider may practice. While the presence of a provider at multiple locations can be beneficial for access, there are more granular details to understand, like how many hours a provider spends at each location, or “access point,” which may dictate whether the provider accepts new patients at that location.
In areas where provider participation is low and employees appear to have inadequate access, employers may look to understand a carrier’s provider contracting strategy. Employers and carriers can partner to identify geographic areas where employees reside but have little access to network dentists or tend to obtain care from out-of-network providers. In some instances, carriers may be able to leverage the size of large employers to incentivize providers to participate in the contracted network. That being said, some providers may prefer to remain independent of insurance contracts, as they may already have a stable patient base and may not see the need to contract with insurers to increase patient volume. This may happen in particular in more rural areas where only a few dentists practice, giving them a hold on that local market.
The results of geoaccess analysis can help identify those employees who are left with few or no in-network provider options. As a result, these employees may be relegated to using out-of-network providers and potentially paying increased out-of-pocket costs. If there are few opportunities to improve the contracted provider network in those areas, another option may be to find cost-saving solutions for those employees. Patients may build strong relationships with oral health providers in areas where there are few provider options, and/or they may choose out-of-network providers based on personal preference. If a carrier is unable to increase network penetration via contracting, employers can work with it to design benefit plans that offer relief from high out-of-pocket costs for out-of-network care. Preferred provider organization (PPO) plans generally allow members to see providers out-of-network but may have different levels of plan coverage or higher member cost-sharing requirements for these providers.
Members who face high out-of-pocket costs as a result of limited or no in-network options may benefit from a network arrangement that acknowledges and addresses gaps in geographic access.
Employers and dental carriers can work together to identify geographic areas of highest concern by using a threshold for geographic access measures. Using existing claims data, employers can also identify which employees are regularly obtaining out-of-network services and paying high out-of-pocket costs. Then, via a combination of strategically focused provider contracting efforts and creative benefit plan design, a dental benefit may be developed that reduces or mediates unanticipated costs for employees in low-access areas. Some illustrative examples might include a funding arrangement to reimburse those employees for out-of-pocket costs related to obtaining out-of-network care, or a bifurcated benefit plan with richer cost sharing in certain areas. Member education also plays an important role to ensure understanding of how networks and benefits work together.
Balancing network breadth and plan costs is an ever-present challenge for employers looking to offer accessible, affordable provider options to their employees. Using the above questions to develop strategic priorities for working with a current plan administrator, network, or prospective contractor can help employers design benefits to reach plan goals and ensure satisfied, healthy employees.
1 CareQuest Institute for Oral Health. Survey: U.S. Oral Health System Is Failing, but Americans Know How to Fix It. Retrieved December 23, 2021, from https://www.carequest.org/about/news/survey-us-oral-health-system-failing-americans-know-how-fix-it.
2 Kaiser Family Foundation (September 30, 2021). Dental Care Health Professional Shortage Areas (HPSAs). Retrieved December 23, 2021, from embedded link.