And such incentives get amplified when healthcare is the only game in town in terms of economic activity.

Whoa whoa whoa, I'm the first one to call out perverse incentives in government programs, but even I would assume that dentists had meaningful ethics codes and enforcement that would largely mitigate this kind of abuse.

OTOH, if the "unnecessary" there just means "not satisfying the platonically correct cost/benefit analysis", and there's still some net benefit to the patient, and the government program didn't ask the dentists to use such CBA, then I wouldn't consider that abusive.

(I can imagine Frontline being equally outraged at dentists denying government-subsidized dental care on grounds of failing the platonic CBA too...)

Dentists do have an ethical code, government payers do look for patterns of abuse, and state licensing boards do investigate complaints of unnecessary procedures (to some extent). But many of these cases really fall into gray areas. Dentistry is still more an art than a science, and different dentists treating the same patient in good faith will often come up with completely different treatment plans. It's tough to really prove abuse. Financial incentives absolutely do encourage healthcare providers to err on the side of doing more procedures.

Medicare pays based on how many tests are performed. Hence, medicare patients get lots and lots and lots of tests done.

When the government provides a vending machine that dispenses gold coins at the push of a button, how many of us could resist pushing that button as much as possible?

A society cannot be run on expecting people to resist the powerful incentives set up for them.

You can see this effect in every aspect of government operations.

If too many of us would literally cut off the limbs of others unnecessarily to acquire said gold coins than we're done here. Let's just burn it all down and start over.

The best part about over-treating as a dentist is there's no evidence, and the patient might never know.

> Frontline did an episode a while back were dentists were performing unnecessary major dental work on poor people when the government had a program to pay the dentists for such work

I haven't seen this episode and so don't know what qualifies as "major dental work." However, as someone who has had government dental insurance, I wanted to chime in with a possibly irrelevant anecdote.

This dental insurance covered few things, one of which was having teeth pulled. When I was having major pain and other issues with a molar, the only covered treatment was to have the tooth pulled. Anything else would have to be paid 100% out of my own pocket. So the only viable option for most people in my situation would have been to have the tooth pulled, which certainly seems like "unnecessary major dental work on poor people", through no fault of the dentist.

Google:

Frontline Dollars and Dentists season 2012 episode 13

and see for yourself.