1300 SMILES saw a slump in their share prices this week with a 4.5 per cent dip. The drop may be a flash reaction to the Turnbull government’s announcing of a new $5bn dentistry scheme—the Child and Adult Public Dental Scheme (caPDS).
The slump may be due to investor fears over increases in public system funding. Stakeholders are concerned an injection of $5bn—over the coming three-year period—to public health may decrease private practice profits and patient numbers.
However, the Australian Dental Association have said the plan is actually a smoke screen deployed to cut $200m per annum from public dental health care funds.
“It’s smoke and mirrors,” said ADA President Rick Olive. “Let’s not be fooled. This is a measure that just won’t deliver.
“Let’s see this for what it is. This is a budget saving resulting in a reduction of about $200 million per annum for dental care,” he said.
Daryl Holmes, 1300 SMILES’ chief believes that the new scheme will actually create an increase in private practice business. Holmes believes if the extension of care to 10m Australians goes through the tried and true channel of sub-contracting to private practice the outcome will be positive for his share holders. “As long as they outsource it will be a cracker,’’ he told The Australian.
Dental chain 1300 SMILES weren’t the only group under the drill, Pacific Smiles also saw a dip as large as three per cent. Although they recently told The Australian that public funding wasn’t a large chunk of dental care, covering only seven per cent of the $9bn industry, with this number in stasis “including through periods of change in the funding environment.”