How much is good healthcare worth? Is it worth $8,233 per year per person? That’s what we spend in the United States. This figure is more than two-and-one half times what most developed nations in the world spend on healthcare, including the relatively rich European countries like France, Sweden and the U.K.
In the U.S. healthcare costs are now 17.6 % of the GDP; in Australia, it is 9.4% of the GDP; Germany 11.3% of the GDP; and France 11.6% of the GDP.
What’s predicted is by 2025 healthcare costs in the U.S. will be at or above 20% or more of the GDP. Unsustainable. Untenable. Unmaintainable.
Now, put dentistry in the middle of this healthcare-cost quandary.
- Fact: The percentage of patients per population who see a dentist is dipping. Studies show this is due primarily to cost, but also due to the availability of dentists.
- Fact: There is a well-established connection between oral disease and chronic systemic diseases. Some of these relationships are now well-proven; others are still being explored.
- Fact: Dentistry significantly improves treatment outcomes for certain chronic diseases.
Those are the facts.
Given these facts, significant pressures will be laid on dentistry: economic, political, and social. Dentistry will feel a lot more pressure to figure out how to treat more patients at a cost that’s within the healthcare system’s budget.
If people with certain chronic diseases do not have access to a dentist, their disease will accelerate more rapidly. The bottom line? Without dentistry, it will cost the healthcare system considerably much more money to treat and manage certain chronic diseases.
Now what?
Impact on Dentistry
At $3 trillion, the healthcare system dwarfs the dental industry at only $140 billion. Systems rule — always have, always will. Dentistry is part of a system, although dentistry has been operating independently since it became a formal profession. But the healthcare system is dramatically changing, and dentistry’s isolation is coming to an end.
The system determines the kind of players required to make it work. The system determines how the players play. The system determines how dentists and primary care will best serve the system. Examples abound about the supremacy of systems: the New England Patriots, Zappos, Boeing, Aspen, the Marines. The system is the ultimate determinant.
All the stakeholders in the healthcare system — insurance companies, clearinghouses, hospitals, employers, government, suppliers, financial institutions, dental and medical schools, social media, professional organizations, and providers — all know treating chronic disease by adding dentistry keeps people healthier, more productive, reduces their co-pays, keeps absenteeism down, and holds the line on how much money is spent on healthcare.
Currently, dentistry is based on a fee-for-service model. You do a procedure, you get paid for it. The more procedures you do, the more you get paid. The more expensive the procedures, the more money you make. Dentistry has always been a for-profit business. That’s what worked in the old healthcare system, but it seems won’t work nearly as well in this newly emerging system.
Costs need to be controlled throughout the entire system — that’s obvious. Efficiencies need to be improved. Chronic diseases are the biggest guzzlers of the healthcare dollar. Dentistry can be a game-changer. Example: when you add dentistry to the mix, you save $7000 per year per patient on a substantial population of diabetic patients.
With these clinical and cost-saving outcomes, what kind of pressures will this put on dentistry when the system stops looking at dentists as independent operators? Dentists, like it or not, will be held more and more as able to be integrated with the overall healthcare system.
What will the future of dentistry look like?
What will dentistry look like, and how will it operate, when it is integrated with primary care? Ask Kaiser Permanente Northwest, who has a diverse, highly skilled group of 145 general and specialty dentists, as well as a broad PPO network with more than 6,000 dentists in Oregon and Washington. Kaiser is moving forward, integrating dentists into patients’ overall healthcare plans.
What will dentists do when they are added to the healthcare team with the other players — hospitals, physicians, insurance companies, pharma, patients, government? Being responsible to and within a group is a whole lot different than being responsible only to yourself.
Vertically integrated systems
As the healthcare system changes, one emerging trend is the vertically integrated system, which includes dentists. A vertically integrated system is an arrangement in which the company — usually a hospital or insurance company — owns the supply chain. Each member of the supply chain produces a different product or market-specific service, and the products combine to satisfy a common requirement.
A ready example of an integrated system is your local hospital, which is owned by a large hospital system that owns and operates multiple hospitals and outpatient clinics. They own the medical-dental office buildings just off campus. They own the land on which the buildings sit. They own the physician practices — primary, secondary and tertiary specialists — that occupy their buildings. And they also own a “chain” of ancillary services such as hospice, pharmacy, and in-home nursing services.
The hospital system wants to own as much of the downstream and upstream entities of their supply chain because vertical integration yields results, with far more cost control — for less time, less money, less hassle and aggravation, and fewer people to deal with.
Vertical integration is the future of dentistry
Hospitals such as Kaiser and insurance companies such as Guardian are currently moving forward with vertical integration. Just as consolidation — which is basically horizontal integration — caught fire, so will vertical integration.
It is inevitable that as the healthcare system pushes for better results at a reduced cost, dentistry will be required to restructure itself to integrate with the other system players.
Solo practice will not be able to adapt to this system. Some managed-group practices will be able to redesign themselves, to successfully partner with the other stakeholders, and be players in an integrated system.
Entrepreneurs who see the future as a juncture of horizontal and vertical integration, who know how to truly partner with the other players in the supply chain, will have the opportunity to create something that can make a real and lasting difference to healthcare— and be handsomely rewarded.
Get ready — vertical integration is the next big thing.
For more on this topic, click here: Integration of Dental Care with Primary Care: The Next Force of Change
