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Are the health funds' bubbles bursting?

By Graham Middleton - posted Wednesday, 1 June 2016

Health funds' business models are flimsy, with heavy churn rates of policies, complaints by the public and ancillary cover being widely questioned as offering poor value for money.

Dentists have become used to health funds interfering in clinical decision-making by changing rules, and as at least one ADA branch puts it:

  • Showing a lack of procedural fairness towards dentists.
  • Threats of de-recognition that would prevent a dentist's patients from receiving rebates from health funds.
  • Intimidatory behaviour by funds in their practitioner audits.
  • Refusal to rebate GP dentists for supposed specialist procedures.

I have received many emails from dentists about these and other health fund related matters.

Boa constrictors

Health funds' tactics are akin to those of boa constrictors, which quietly slither up to unsuspecting animals and then, ever so gently, wrap their coils around them; gradually tightening their embrace. Eventually they kill their prey and swallow it.

The dental profession laid down with health funds in a cooperative manner many years ago, only to see whole geographic areas dominated by funds which became ever more aggressive in their manner towards dentists and their practices; ultimately claiming that policy-holders are their clients rather than dentists' patients, with the funds actively encouraging patients to switch from dentists which they could not persuade to become preferred providers, often implying that the patient's regular dentist was inferior, i.e. 'is not on our preferred list'.

Dental practice goodwill

Ultimately, if sufficient Australians sign up for ancillary health insurance cover, the funds will become more powerful, thereby eroding the goodwill value of dental practices. What would practices be worth if health fund action resulted in the majority of treatment being done in almost all practices under health fund rules?


Current ADA President speaks out

Recently ADA President Rick Olive has exhibited signs of going where his predecessors and the national CEO have previously been reluctant to venture, by attacking the funds for their paltry rebates and systematic skimming of ancillary premiums.

There is little doubt that there has been a significant conflict of interest among ADA office bearers concerning health funds over many years. Silence has descended following calls for declarations of conflicts of interest.

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This article was first published in Australasian Dental Pratice.

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About the Author

Graham Middleton personally has been advising dentists on strategic, practice management, valuation and conflict resolution processes for 28 years, the last 21 as a founding partner and director of Synstrat Management Pty Ltd and Synstrat Accounting Pty Ltd. He was once a regular army officer, and later Director Human Resources Manager, Attorney General’s Department of Victoria.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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