Managed Care in Dental Markets: Is the Experience of Medicine Relevant?

Objective: This paper reports on factors that predict the market penetration and growth into the market of both medical and dental managed care, and the relationship between the two. Methods: Using data from the National Association of Dental Plans, the Interstudy Competitive Edge HMO Census, and the Area Resource File from 1987–95, we created an analytic data base covering the dental HMO market, the medical HMO market, dentist and physician supply, and regional market characteristics. Simple correlation analysis and multivariate linear regression using ordinary least‐squares techniques were used to predict medical HMO penetration and dental HMO penetration in each state during 1994 and 1995. Results: The results show that although the penetration of dental HMOs has been modest when compared to medicine, its growth is predictable by the same factors, and closely follows the pattern found in medical markets. Conclusions: Despite the observed relationship between medical and dental HMO penetration rates, there are potential barriers to managed care in the case of dentistry that may explain the slower growth to date, and that may ultimately decide the extent of managed care penetration into the dental market.