April 8, 2015

Health Funds – Premium Increases and Belt Tightening


Recent increases to health fund premiums have averaged 6.18%, which is way above the rate of inflation. We are well aware that our patients are trying to balance the home finances and dental treatment is often an unexpected burden on the budget.

About health insurers

NIB and Medibank Private are public listed companies that have to make profits to pay dividends to shareholders. BUPA is the Australian subsidiary and sends its profits to a large British fund.  It is logical that most Australians would choose a mutual fund, which is any fund except those three, as the funds put any profits back into their reserves which support their hospital cover. However having ancillary (or extras cover) still represents appallingly poor value.

Hospital related costs are rising at a much faster rate than ancillary costs because they have an ageing population prone to having more expensive procedures, such as heart surgery, procedures which in many cases were unknown fifty years ago.

22% premiums skimmed off – ADA President Dr Rick Olive has complained to the Australian Competition and Consumer Commission (ACCC)  because for ancillary insurance, funds only pay out 78% of the money they collect. Total health fund management expenses in 2014 was $1.7 billion.  Consumer group Choice spokesman, Tom Godfrey, has indicated that people would be better off keeping the premiums in their bank account and paying their own ancillary health bills.  There are reasons that many members would retain hospital cover however.  For major needs, such as hip surgery or heart surgery, they can go to the front of the queue and have the surgery done by their choice of surgeon in a private hospital, and enjoy a private room rather than enduring considerable ongoing pain while on an indeterminate waiting list for an operation in a public hospital.

What can we do?

Some people will find the cheapest dentist possible and this may be by seeing one of their health fund’s preferred providers, and others may be keen to get treatment overseas with the growing popularity of dental tourism.  While this is tempting, and many good services are obtained this way, there is no second chances when it comes to you health.  We do not advise buying a half price parachute on eBay.  We continue to recommend a preventive approach, and high quality dental services.  We do greatly reduced fees for children and adolescents and recommend most people see a dentist every 6 months.  Regular care can avoid large expenses and surprises, and has been shown to be cheaper than the money spent on health fund extras.  Larger problems that become considerably expensive to fix usually are not covered much by extras cover anyway.

Consider the following 2 cases:

The first picture shown is a 35 year old who has paid a large amount of money with poor dentistry and a poor preventive approach.  The crown and root filling on the top middle tooth is about 5 years old, does not fit, is not cleanable,  and the tooth will soon be lost. The fillings go under the gum and there is damage to the jawbone due to infection.  This person has a future bill of thousands of dollars to try and fix this problem without dentures and may still be alive in another 65 years.

The second photo is of a 55 year old patient that attends regularly, and has paid for 2 crowns that fit well.  The top crown is the same tooth as the previous patient and is also 5 years old done at Nundah Village Dental.  The bottom crown is 30 years old and well fitting and well maintained.  This person may be alive in another 45 years and their dental expense is likely to be just regular 6 month checks and cleans.

We believe in spending the time to do our job right and still will not compromise our services by signing on to being a preferred provider to any health fund.  These schemes aim to attract budget dentistry done at a faster speed with less time for emphasis on prevention.  Many people think a filling or a crown is the same no matter where they go.  The first patient above would have spent much more in the years leading up to now regardless of her health cover due to a lack of preventive care.  The second patient has had a dentist that took the time to do it right.  To keep healthy mouths takes good hygiene and diet, preventive care, regular dental checks, and quality dental treatment when indicated.  Quality dental treatment means we stand by the work we do, and will do everything we can to get the best result for our patients, as long as they also accept a preventive maintenance schedule to look after what has been done.  Some of our patients may need dentistry well into their nineties or beyond.  Without regular preventive care it is unrealistic to expect a machine like your mouth to last such a long time.