Coinsurance effects on dental prices

Abstract

For many Americans the cost of dental services represents a barrier to receiving regular dental care and maintaining proper oral health. The recent growth of the dental insurance industry, however, may partly offset this price barrier among insureds. Our purpose is to examine the relationship between coinsurance and dental prices for 16 dental services among a sample of Pennsylvania Blue Shield (PBS) adult insureds. The dependent price measure is the annual average gross price paid for 16 specific preventive, restorative, periodontic, endodontic, prosthodontic, and surgical dental services. Independent variables in the price model include the insured's age, education, coinsurance rates, time costs, market area, non-wage income, oral health status, area dentist-population ratio and usual source of care. Data sources are 1980 PBS claims and coinsurance rate data and a mail survey of sampled insureds. OLS regression analysis reveals that the model's independent variables explain little dental price variation. No variable is consistently significant across services, but market area, coinsurance rates, and time costs alternately dominate across equations. These results suggest that, among adult insureds, coinsurance and time costs influence dental fees in a minority of dental services. Insurance reduces the patient's sensitivity to money price, and non-price factors correspondingly seem to become more important in patient search.