Should public dental be opened to competition?

The Productivity Commission recently proposed reforms to inject greater competition into the public dental sector. Rachel Smith investigates what this could mean for the industry overall.

A new report by the Productivity Commission that recommends opening up public dental services to competition has ruffled feathers in the public sector.

Released in December 2016, the report suggests that introducing “greater competition, contestability and user choice to public dental services could, as part of a suite of reforms, lead to better outcomes for patients and the wider community”.

Dr Hugo Sachs, president of the Australian Dental Association, agrees that the current system is in ‘disarray’ and isn’t conducive to delivering services to those in need. “There’s a lot of development that needs to be done under that particular aspect,” he says. “So often, those who are most vulnerable tend not to benefit because of the restrictions that have been made in the way in which those services can be delivered.”

However, many in the public sector are dubious about moving towards the proposed Medicare-style model, even if it means more public patients can potentially receive dental care at a local practice, instead of missing out on it altogether.

Not the model Australia needs

Dr Deborah Cole, CEO of Dental Health Services Victoria, is one of many who don’t agree with the Commission’s recommendations. “I don’t think they’ve been properly thought through,” she says. “The fee-for-service model produces over-servicing simply because the incentives are there. It costs me more to send things out privately, and we know from the Chronic Dental Disease Scheme and other schemes that private dentists will do more [on patients]. So I think the proposed reforms would be very costly to the government.”

It will also create more demand, she adds, because a lot of eligible public patients currently aren’t seeking care—simply because they have too far to travel or they don’t know it’s available to them or they’re worried they might have to pay a cost they can’t afford.

“So I think the implications for funding are pretty significant—we’d love to see more money in this arena. There’s currently a very limited amount of funding available in the public sector and, at the moment, across the country there’s anywhere between 30-40 per cent of the whole Australian community eligible for public dental care. And in any year, less than 25 per cent of that 40 per cent actually access care. So, we’re not even touching the sides. We’re doing the best we can with a very small amount of money.”

“An outcomes-based healthcare model for dental, which essentially means paying for health outcomes rather than paying a fee for a particular service, is more what we should be moving towards.”—Dr Deborah Cole, CEO, Dental Health Services Victoria

If the proposed reforms did go ahead, Dr Cole believes public dental would probably become a lot smaller and look very different as a set of organisations. “I think there’d be pretty significant pressure on us not being in existence exactly in the way we are, or we’d pick up on the really complicated, difficult cases that cost a lot from a private sector point of view. Private practices would reach the cap really quickly so we’d probably cover the cases that go past the cap—we’d be the safety net.”

The impact on private dentists

The proposed model could benefit those in private practice, but it would mean rethinking the business model, says Dr Cole. “I’d imagine the types of fee level that the government would be paying at wouldn’t mean high profit margins for each service, so the really innovative practices would start to look at what’s the best way and the most cost-effective way of providing those services.”

Other changes may also come in, including the need for practices to have a certain level of accreditation to treat public patients, and for quality indicators and reporting. “Although, those are things that need to be discussed later,” Dr Cole says. “There are a lot of steps to go through before this becomes something where we look at the mechanics of actually implementing the recommendations.”

It is Dr Sach’s hope that an accreditation system would be more streamlined since, as he points out, private dentists— depending on where they operate in Australia—currently have to jump through “idiosyncratic hoops” in order to provide treatment for public patients. “If you could minimise the red tape, you’d get a far more efficient delivery of service.”

The case for an outcomes-based model

The links between oral care and cardiovascular disease, diabetes and other health issues are well documented, which helps to explain why many are passionate about a system that offers basic dental care across the board.

“An outcomes-based healthcare model for dental, which essentially means paying for health outcomes rather than paying a fee for a particular service, is more what we should be moving towards,” says Dr Cole.

“You want a funding model that drives the right behavior, which is to improve health outcomes. I want the population to be healthier, happier, able to live their lives well and participate in our communities. To be able to go for a job without the fear of missing half their front teeth. For a lot of our public patients that’s not possible at the moment. I think that’s really sad and we can do something about it, but we need to come up with a better way of doing it and the Productivity Commission is falling back on an old model that I don’t think is right [for Australia].”

“I do know that we as an organisation would dearly love to be involved in developing a system that delivers quality services to all Australian people.”—Dr Hugo Sachs, president, Australian Dental Association

Dr Sachs agrees it’s a big picture issue. “I don’t think anybody can come up with a big picture answer, but I do know that we as an organisation would dearly love to be involved in developing a system that delivers quality services to all Australian people.

“It will be interesting to see how the state health ministers adapt to this, and whether they’re prepared to provide additional monies towards dentistry. If this did become policy, I would imagine there would be a significant amount of review of the system and a lot of treatment minutiae to mull over,” he says.

“[Whether it works] will all depend on the funding that’s provided and that they’re prepared to put in, in order to deliver a system that will treat patients across the board and deliver overall better health outcomes. We’re in a position of learning, I guess, and it’s going to be very interesting to see how this plays out.”

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