LIMRA September 2010

Using Competitive Information to

Optimize Dental Network AccessAaron Groffman

President, The Ignition Group

www.netminder.com

Discussion Topics

Dental networks will continue to be important

All dental networks are not the same

Using CI to optimize your dental network

Discussion Topics

Dental networks will continue to be important

All dental networks are not the same

Using CI to optimize your dental network

Dental networks save money

Procedure

Average

Charge

Average

Discounted

Fee

Discount

Percent

Exam $39 $26 33%

Cleaning $72 $54 25%

Filling $129 $87 33%

Crown $859 $682 21%

Source: Ruark Dental PPO Network Study, 2008 Edition

Dental networks save money

Average

Network

Discount

Network

Utilization

Effective

Discount

31.9% + 37.6% = 13.2%

Source: Ruark Dental PPO Network Study, 2008 Edition

It’s good to be a dentist

It’s good to be a dentist

http://smallbiztrends.com January 2009

But not quite as good as it used to be

But not quite as good as it used to be

Financial Forecast Center, LLC July 2010. http://www.forecasts.org/

Unemployment Forecast

Discussion Topics

Dental networks will continue to be important

All dental networks are not the same

Using CI to optimize your dental network

A word about measuring networks

Unique providers

Unique locations

Access points (providers at locations)

Practicing

Non-practicing

A word about measuring networks

A word about measuring networks

5 unique providers

A word about measuring networks

5 unique providers

4 unique locations

A word about measuring networks

5 unique providers

4 unique locations

9 access points

(providers at

locations)

A word about measuring networks

Practicing Location

Practicing Location

Non-Practicing Location

Practicing Location

Dental PPO networks continue to grow

0

20,000

40,000

60,000

80,000

100,000

120,000

Ave

rage

Nat

ion

al N

etw

ork

1.50

1.55

1.60

1.65

1.70

1.75

1.80

1.85

1.90

Ave

rage

Lis

ted

Lo

cati

on

s P

er

De

nti

st

Provider Locations 66,976 68,668 79,501 88,145 106,473

Unique Dentists 41,310 42,372 46,932 49,542 57,562

Locations Per Dentist 1.62 1.62 1.69 1.78 1.85

Jul-05 Jul-06 Jul-07 Sep-08 Sep-09

Source: NetMinder Sep09

+20.8%

+16.2%

Average National PPO Network

Contracted Providers

49,542

Contracted Providers

57,562

Available Providers

115,482

Available Providers

112,176

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Sep-08 Sep-09

Pro

vid

ers

Market penetration is growing but still low

Source: NetMinder Sep09

30.0%penetration

33.9%penetration

Average National PPO Network

Dentists are participating with more networks

Source: NetMinder Sep09

Network Participation

7.07.4

7.8

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

Sep08 Mar09 Sep09

Ave

rage

Ne

two

rks

Pe

r P

rovi

de

r

Though many still participate with just a few

42% of providers

participate with <=3

networks

Network Participation

1 network, 23.2%

2 networks, 11.6%

3 networks, 7.2%

4 networks, 5.0%

5+ networks, 53.0%

Network Participation

Source: NetMinder Sep09

Overlap varies by counting method

Network A:107.8K Provider Locations

59.7K Providers

Network B:104.4K Provider Locations

52.1K Providers

68% Overlap

(Providers)

Source: NetMinder Sep09

Overlap varies by counting method

Network A:107.8K Provider Locations

59.7K Providers

Network B:104.4K Provider Locations

52.1K Providers

52% Overlap

(Provider Locations)

Source: NetMinder Sep09

Overlap varies by state

80%

23%

74% 74%

64%

56%

49%

30%

72%67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

AL AR AZ CA CO CT DC DE FL GA

State

Ove

rlap

- P

rovi

de

rs

Source: NetMinder Sep09

Overlap: Network A vs. B by State

5.7

3.2

1.8

1.0

3.4

1.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Non Practicing Practicing

Location Type

Loca

tio

ns

Pe

r P

rovi

de

rNon-practicing locations skew the numbers

KS, KY, MO, VA

CA, GA, MN, TX

Average

Source: NetMinder Sep09

The right ones need to be added to impact

costs

13.5%

8.6%

0.8%

-3.6%-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Access Points Unique Dentists In-network utilization

(passive)

Effective discount

(passive)

Per

cen

t gr

ow

th 2

008

v 20

07

Source: Ruark Dental PPO Network Study, 2008

Edition

2008 Growth Rates

Discussion Topics

Dental networks will continue to be important

All dental networks are not the same

Using CI to optimize your dental network

Optimization Strategies

How many

X providers in Y miles access

Providers per capita

Penetration of available universe

Which ones

Already have

“NOT IN” locations for “IN” providers

“NOT IN” providers at “IN” locations

Others have

Practicing locations

Multiple networks, but not too many

Which providers to recruit

Summary

Dental networks will continue to be important

All dental networks are not the same

Effective use of CI can help you optimize your dental

network

What the future holds