To examine the impact of commercial dental insurer and provider concentration on dentist reimbursement.
We utilized provider data from the American Dental Association, reimbursement data from IBM Watson MarketScan Commercial Research Databases, submitted billed charges from FAIR Health, dental insurance market concentration data from FAIR Health, and county‐level demographic and economic data from the Area Health Resources File and the Council for Community and Economic Research.
We used the Herfindahl‐Hirschman Index to separately measure commercial dental insurance concentration and dentist concentration. We studied the effect of provider and insurance concentration on dentist reimbursement. Using two‐stage least squares, we accounted for potential endogeneity in dental insurer and provider concentration.
Across the dental procedures we examined, a 10 percent increase in dental insurance concentration is associated with a 1.95 percent (‐value = .033) reduction in gross payments to dentists. Conversely, a 10 percent increase in dentist concentration is associated with a more modest 0.71 percent (‐value = .024) increase in gross payments. A 10 percent increase in dental insurance concentration is associated with a 1.16 percentage point (‐value = .016) decline in the allowed‐to‐list price ratio, while a 10 percent increase in dentist concentration is associated with a 0.56 percentage point (‐value = .001) increase in the allowed‐to‐list price ratio. Similar patterns were found across dental procedure subcategories.
Dental provider markets are substantially less concentrated than insurance markets, which may limit the ability of dentists to garner higher reimbursement.
