Dental Check-Up: Feeling the Bite of the Recession

REGION – This time last year Traverse City dentist Dr. Fred Arnold had cut back his office hours and was experiencing a 25 percent drop in productivity.

The tip of decline was August 2008 and, as the economy unraveled, his patient volume took a hit.

"We definitely saw a downtick," says Arnold, who's been practicing dentistry since 1970, all but two of those years in Traverse City. "We went down to three days … and most days had big holes (unbooked appointments) in them."

Arnold saw a combination of situations: patients who lost employer-sponsored insurance, lost their jobs outright, or were so concerned about their jobs they were postponing their regular dental care. Add to that mix his patients who are General Motors retirees and lost their dental and vision benefits last July.

But by the end of last summer, things started to turn around.

"From an economic standpoint I think people with jobs, either with or without insurance, came to the conclusion that they were keeping their jobs," says Arnold. "And some may have been getting uncomfortable with the fact that they hadn't been to a dentist in a while."

At Deerhaven Family Dentistry, Dr. Steve Niergarth says while the office is "still doing pretty well," it did end 2009 down one to two percent. "For the first time ever we were down," he says of the 25-year-old Traverse City practice. Like Arnold, he saw a lot of patients who lost insurance, both through local job loss as well as from the General Motors benefits cut.

"We're seeing fewer patients willing to spend on crowns or cosmetics, and being pretty conservative in general," says Niergarth. The office also began offering payment plans to help patients. "We have relaxed our financial requirements a bit. We're trying to be more accommodating instead of requiring payment at time of service."

While local dentists aren't hearing much dental talk in the current health care debate, the industry will likely feel some impact from whatever kind of reform Congress ultimately passes. Regardless, area dentists and health insurance agents have seen the effect of the economic crisis and the ensuing changes to dental benefits over the last few years.

Keith Wright of Wright & Associates Insurance Group in Traverse City says if dental insurance premiums increase under new legislation, the first thing he expects to see is a rise in employer voluntary dental plans, which employees purchase through a payroll deduction.

"About half of my groups are on a voluntary basis already," says Wright.

Jay Hooper of Great Northern Benefits agrees. His average employer health care plan provides for between five and 10 employees. But dental coverage is a very small part of the business compared to medical. Where he sees the most interest in dental coverage is through voluntary plans.

"Some [of my clients] have said, 'I've got to keep health, but can no longer afford dental and vision,'" says Hooper. "Some would rather spend money on health and not do dental at all, or increase the contribution of employees."

Geoffrey P. Harris, CLU, owner of the Harris Agency in Traverse City, specializes in group and employer plans and says less than 20 percent of his employer groups currently offer dental insurance.

"In strong markets, with more large employers with better wages and benefits, you see much more dental insurance offered," says Harris, who has a 25-year career in the industry. "As the cost of healthcare rises, employers prioritize. Medical is at the top, and as the pool of money shrinks, the ancillary benefits start to go, including group life, vision and dental."

In most cases, that means upping the employee contribution if dental insurance is offered at all, switching to a voluntary plan or cutting the benefit altogether.

Dr. Arnold's practice doesn't accept any insurance, but his office does file the claims for his patients. He says it's a 50-50 split between patients who have insurance and those who don't.

Dr. Brian Klym, owner of Traverse City's Northwood Dental, does accept insurance, and he says the majority of his patients have it.

"The major employers in Traverse City still offer dental insurance," says Klym, "but even with insurance, patients are always making decisions based around finances."

He adds his office hasn't experienced a general decline through the state's economic woes, but that may be because of the array of specialized procedures his office performs, including implants, gum surgery and root canals. Even so, "our office does a lot more advertising than ever before." BN