ABC finally recognises and reports on health insurances

 Hey all, it's been a while since I have posted in this blog. But after seeing the ABC's news about the anti-competitive behaviour (and boy they sure did a good job on it) I will have to add some of my comments about it in my blog.The article in question is here, click here to view it in an new tab. It's well written and once you read it you will catch up on what's happening in the dental industry.Here's my take on the current situation of health insurances: 

They are putting themselves in a major conflict of interest!

Not only are the insurance companies providing rebates for the general public, a lot of the major companies (especially BUPA with their recent aggressive expansions) are becoming health providers as well! This puts them in a huge advantage over independent clinics for a few reasons:

• Whenever independant clinics swipe our patient's health insurance card we need to do it through this EFTPOS machine called HICAPS. The data from HICAPS will always need to go though the database of the insurance company of the patient in order to authorise the claim. Now what happens if the health insurance themselves are also the dental clinics: gives everyone a huge disadvantage.
• Health insurance company such as BUPA and Medibank has more than 60% all policies that are dentally related in Australia - it seems that we are witnessing a duopoly here! So they do wield a lot of economic power
• The health insurance's own clinics also charge "gap fees" in order to make up for the difference in equipment and staffing costs. Not only are they absorbing their own rebates being paid out but they are also making a profit from the services provided to the patient.

Quote from ABC:

Insurers get inside data about their clinical competitors

The Hicaps machines at dental clinics register every claim that is made and feed the information back to health insurers, which can find out what clinics are charging and how much money they are making.If insurers are in the business of owning clinics as well, it means they know everything about their competition.

This opens the door for insurers potentially misusing sensitive market information to decide where to set up their own clinics.

They are starting to coerce independent dentists

Health insurance companies have this special contract with independent clinics (such as BUPA's "members first" network programme) that the health insurance company dictates what the clinic may charge to the patient but as a exchange, will put the independent clinic's surgery details on their website and offer higher rebates (and subsequently lower gap payments) to the patients.To be honest, this kind of special contract has been like this for a while. But ever since we've seen the rise of the health insurance clinics they have been more aggressive in stamping out these clinics. The most recent example reported by the ABC had BUPA sent out a letter to all of their contractor clinics:

"All recognised general dental practitioners within your practice must apply to be part of the Members First dental network …"If we do not receive a completed agreement prior to June 1, 2016, your current agreement will end with us from June 1, 2016."

Things get worse for a lot of these clinics:

• If ONE of their associate dentists are not registered to the health insurance as a "preferred provider" their patients will not get the higher rebate promised by their health insurance
• In fact some of the companies, if even just ONE of the dentist is not signed up as a "preferred provider" all the dentists cannot claim higher rebates on their patient's behalf. Making the clinics look bad in front of the patients
• The pricing for Medibank (from memory, please don't quote me on this) which sets on their preferred provider clinics have NOT changed according to the consumer price index. The last time that I have noted they haven't changed their pricing since 2007/08. Given that the CPI is around 2-3% per year that's a differential pricing of roughly 20-30%! This means the clinics whom are bonded as a preferred provider will gradually make less profit and it gets harder for them to sustain their business to provide quality treatment to their patients

The health insurance companies are really not doing their policyholders any benefits in raising prices at present

From my memory, each year the average policy for health insurances increase by roughly 5% after approval by the federal government

• I started working in Sydney since 2012 and if that's the case. 5 years x 5% = 25% increase in the policy
• How about the rebates you ask? Does the rebates to the patients increase in line with the increase in their premiums? Not really. From our data, it's roughly 1-2%!
• That's a differential of about 5-10% LESS rebates that you're getting in total.

So what I often ask my patients is: why are you with your health insurance company if you're paying more for your premium while getting LESS rebates paid by them each year?All this while the health insurance companies are making tidy profit:

Health insurance is a huge business in Australia, with $22.6 billion in revenue increasing by 5.5 per cent over the last year.Payouts have gone up by slightly less at 5.1 per cent, and there has been a jump in profit of 15 per cent.

This not only affects dental!

This is a conflict that will soon play out across the health services industry, with health insurers setting up in other fields, including optometry, physiotherapy and podiatry.

Even BUPA now is stepping into the hospital and aged care businesses.We as dentists value a healthy and mutually beneficial relationship with the health insurance industry to provide affordable, quality healthcare to our patients. But when they are threatening and eating away the livelihoods of the people related to this relationship it's not in anybody's benefit but the insurance industry itself. 

This has got to stop, and you can help us in stopping it!

For dentists: support the fight by joining in your local Australian Dental Association and be active within your local branch. The more involved you are the more voice that your association has for you!For patients: we have created a page in our website teaching you how to complain any wrongdoing which your health insurance company is doing for you and how to switch from one company to another.