HMOs are catching on for dental care Pa. Blue Shield buys Towson firm


Consumers are increasingly likely to get their dental care through a dental health maintenance organization, a relatively new concept that is catching on as employers seek a cheaper alternative to traditional insurance.

Enrollment in dental HMOs shot up from about eight million in 1990 to 13.5 million in 1993 -- about 11 percent of all people with dental insurance, according to the National Association of Dental Plans, a managed dental care trade group.

HMO dental insurers are growing to serve the bigger market. This week a for-profit dental subsidiary of nonprofit Pennsylvania Blue Shield announced the acquisition of Dental Management Corp., the Baltimore area's largest dental managed-care business.

The purchase of Towson-based Dental Management, which serves more than 250,000 consumers in Maryland and Washington, is part of a Pennsylvania Blue Shield strategy to become a major regional and national force in dental insurance. Blue Shield has two million dental care customers in Pennsylvania and is expanding through its subsidiary, United Concordia Companies Inc., into New Jersey, Virginia, Ohio and Delaware.

Managed dental care is a new field compared to medical managed care, but it's catching up. Dental HMO growth may exceed 17 percent next year, according to the trade group, as dental HMOs sign up more dentists and employers and consumers recognize the price advantages. The average monthly premium of Pennsylvania Blue Shield's dental HMO is $36 a month for family coverage vs. $42 a month for Blue Shield's traditional indemnity dental plan.

Employers increasingly are asking themselves, "If managed care good for me on the medical side, why shouldn't it be for me on the dental side?" says Thomas A. Dzuryachko, chief operating officer of United Concordia.

HMO dentists are paid a fixed monthly fee for each patient, regardless of the patient's treatment, an arrangement that saves money by encouraging preventive care and discouraging unnecessary services, says Wayne Paul, chief executive of Dental Management.

In an HMO plan, patients pick a dentist from a list provided by the HMO. That dentist determines when the patient should see a specialist under contract with the HMO. Dental Management also runs preferred provider dental programs that enable consumers to choose from a larger group of dentists who are paid a discounted fee for each service. Preferred provider plans are more expensive than HMO plans, however.

Many dentists view HMO plans skeptically, but that attitude is changing as the plans become more important sources of patients.

"I think the dental profession as a whole would naturally prefer the traditional fee-for-service type of care where the patient has freedom of choice, the dentist charges what he'd like and he gets paid his full fee," said Dr. Murray Sykes, president of the Maryland State Dental Association.

Dental Management has contracts with about 750 dentists and specialists statewide, though most are in the Baltimore area. The company employs 43 people and expects gross revenues of more than $12 million in 1994. Dental Management customers include Blue Cross and Blue Shield of Maryland, which sells Dental Management dental benefit products in tandem with Blue Cross medical insurance plans.

Mr. Paul and Mr. Dzuryachko say the acquisition benefits both companies. It helps Pennsylvania Blue Shield expand its dental insurance business through its new United Concordia subsidiary; it helps Dental Management expand by providing it computer and systems support.

Mr. Paul says he expects Dental Management's business will increase 20 percent to 25 percent in 1995. He and other Dental Management employees will remain in their jobs.

The terms of the sale were not disclosed. United Concordia bought 100 percent of the stock of Dental Management, which was owned by a group of dentists who started the company in 1982.

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