Australasian Dentist Magazine May June 2021

Category Australasian Dentist 137 T he dental industry continues its evolution into a market dominated by three different groups: health fund owned and contracted clinics, corporate entities focused on short and long-term profit, and private independently owned practices. 1: Health fund owned and contracted clinics Their stated prime aim is to deliver basic dental care at a strictly cost controlled level. This is what is projected to governments as a way to lower the cost of dentistry in Australia and to justify their every increasing demand for more direct funding subsidies. Most health funds claim to be not for profit, but the reality is that they are driven by performances directed at maximising profit – which is retained, not shared with members, by way of lower membership fees. One only has to look at Bupa to see an example of how some profit funds are being dispersed contrary to a not-for- profit claim. Bupa is using some profit to build a wide property portfolio of funds owned and operated clinics. It was also found guilty of using inflated high interest loan rates on from its parent UK body to transfer profit without paying tax in Australia. Other major health funds are now adopting the ‘Bupa model’ and opening their own chains of clinics and actively directing their members to those clinics to maximise profitability. Bupa has a wide portfolio of other interests in the Australian health and aged care industries. In some of these industries Bupa has been found guilty of not meeting government standards of care – because of their drive for profit. Then there is the recent ‘contract’ issue with Bupa, forcing dental practices to agree to a revised Bupa Terms and Conditions or be faced with losing Bupa member patients because Bupa will not pay their members any benefit if they attend a practice that chooses to remain free of Bupa Health Fund imposed Terms and Conditions. The end result of this Bupa initiative is that some of their members lose the freedom to choose their preferred dentist. Of course, there are some small health funds that are genuinely trying to look after their members, but their market- share in the industry is too small to justify the claim that all health funds put their members’ interest first. 2: Corporate entities focused on short and long-term profit To their credit corporate entities do not dispute their drive for shareholder profit. However, it is hard to then justify that they put patient care before profit. 3: Private independently owned practices This group consists of stand-alone privately-owned practices, with between two to four chair clinics. Their scale of operation prevents them from competing in the dental market as major health fund owned chains and well-funded corporate entities do. Many smaller practices are on borrowed time as major players extensive marketing strive to convince the younger generation that bigger is better and flash premises deliver better dentistry care. The long-term survival of this group depends on their joining together and marketing under a common brand and creating a scale of operation that will enable them to operate at the same cost level as the major players. But what does the public with health cover membership think of it all? Too complicated to understand? I am only interested in what is best for me! I only want the lowest cost! Then there are the 54% of the public who think there is no real value in health insurance extras as it is not really insurance covering possible events and the benefits paid are minimal compared to overall costs. The end result is a fragmented dental industry that is costing the federal government billions of dollars and still not delivering effective dental care to the Australian public at an affordable cost. Where will it all end? The government will finally limit its subsidies level and small health funds will be financially unviable and seek takeover bids from the major players. The health funds will finally have to deliver quality care to their members or drop their practice fees to retain membership numbers. This will come at a cost to profit and the funds will struggle to remain viable. Because of their quality management and access to capital, corporate entities will continue on catering to a segment of the market that responds to strong advertising and location convenience. Independent dentists will eventually realise that they have to join forces to remain viable and competitive and continue building the high level of continuing personal care and trust which is at the core of their practices. In time all will be revealed but it is healthy to try and look at what is coming and be prepared. u Merv Saultry Health insurance – where will it all end? By Merv Saultry columnists