Dental insurance varies from provider; however insurance companies implement cost cutting techniques to save money for itself, and you. They do this by coordinating networks, encouraging preventative care and creating convenience for its customer.
Insurance companies are proactive in their cost cutting measures, especially when negotiating with doctors. Doctors communicate the procedures they most commonly perform, the “demand” so to speak. To cater to its subscribers and doctor counterparts, insurance companies negotiate subsidized prices in regards to reimbursements. Doctors participate because it increases their pay threshold ability, customers are more likely to pay a lower subsidized price and the insurance company keeps a popular service cost down. The communication also encourages doctors to practice preventative measures to keep higher costing procedures off the table. Insurance companies make investments in this manner to avoid larger costs to the company. Though it seems dubious, you save money because insurance companies negotiate.
Insurance companies encourage doctors and patients to practice preventative care. Whole organizations practice the art, often giving incentives to doctors who use examination methods as a preference to treatment (if it can be prevented). Again, a dubious prospect, but it gives more reimbursements for cost cutting methods, which in turn creates a lesser bill from a more serious condition, that (if left untreated) would cost patients and insurance companies more.
Like above, encouraging doctors to take popular procedures by cost are one way of insuring some costs are low. However, when insurance companies negotiate they also consider the broad network they are trying to service. It may seem like more of an expense to an insurance company, but the negotiations insurance companies undertake are in the grander scheme of cost cutting ideas. The wider the coverage, the more likely an insurance provider would maintain a subscriber. The wider the negotiations are, the lower the overall costs are (making money and saving money simultaneously).
Insurance companies have to be smart to balance costs, and reimbursements for its customers. However by coordinating networks, encouraging preventative care, and creating convenience dental insurance companies create reimbursements designed specifically for you.