ALEXANDER HOLDEN and HEIKO SPALLEK. Private Health Insurance Under the Lens: Dental Providers and Patients Should Contribute to the Discussion.

Aug 16, 2019

While Stephen Duckett’s and Kristina Nemet’s recently released Grattan Institute report “The history and purposes of private health insurance” predominantly deals with the medical part of private health insurance (PHI), many questions that are raised are of vital interest to all dental professionals and their patients. In an attempt to stimulate a public debate, we are juxtaposing the debate about Australian PHI and two recent papers published in The Lancet that feature within a series on oral health.

Two recent papers from The Lancet; Oral diseases: a global public health challenge and Ending the neglect of global oral health: time for radical action, describe the scope of the global oral disease epidemic, its origins in terms of social and commercial determinants, and its costs in terms of population wellbeing and societal impact; and then present a critique of dentistry, highlighting its key limitations and the urgent need for system reform.

Let’s explore how these two publications address a few of the wicked problems in healthcare with a focus on oral health.

Equality and Fairness

Having really good reasons for maintaining the PHI rebate should be of great interest to every person who pays taxes in Australia; the Commonwealth spends about $11b billion a year to maintain this status quo. That figure includes not only the direct cost of the rebate but also the cost to the budget of the tax incentives for taxpayers to take out PHI.

Duckett and Nemet stipulate in the Grattan report that “[p]eople with PHI […] gain greater access to hospitals and health services, which undermines the principle of access to service based on clinical need. To the extent that PHI facilitates faster access to care by encouraging ‘queue jumping’ and allowing people to bypass public hospital waiting lists, based on PHI status and ability to pay, this is inequitable.“

Is jumping the queue an issue in dentistry? Indeed, the Productivity Commission has reported that across Australia, those who are eligible for public dental services often face multi-year long waiting times to receive treatment, even for acute dental issues such as toothache. Compare this with the almost instantaneous availability of access at many private dental clinics and the existence of a two-tier system of access becomes very apparent.

The Lancet papers address inequality by stating that “… the current treatment-dominated, increasingly high-technology, interventionist, and specialised approach is not tackling the underlying causes of disease and is not addressing inequalities in oral health.“ and that “the current individualistic clinical paradigm has not achieved sustained improvements in population oral health or addressed the persistent inequalities”.

Impact of Specialization

The Grattan report observes that the “medical specialist-induced demand, [is] based on patients’ ability to pay rather than their clinical needs” while The Lancet papers claim that “…an increasing number of specialists reduces the stability and continuity of dental care and preventive support provided in primary care services…” and that “[t]he growth of specialist practice increases the cost of care and access is often sparse in areas of most need.“


The Grattan report describes “PHI as an ‘enabler of choice’” and we presume this notion could be extended to dentistry as well. Duckett and Nemet postulate then that “the choice provided by PHI may be worth relatively little, because in the absence of full information about options of treating doctors and their fees and complication rates, patients (and referring doctors) are rarely able to make an informed choice based on the relative merits of hospitals or practitioners.” In Australia, anti-competitive policies and legislation prevent the setting of standardised fees in dentistry, an unintended consequence that is frequently cited by patients is that this leads to a lack of transparency to accessing treatment. The Australian Dental Association publishes its annual fee survey which demonstrates the range of fees that members charge for treatments. However, the results are only available to the membership of the association.

The Lancet papers highlight that patients have little choice when it comes to alternative treatment models as “[t]he dental profession and the practice of dentistry are still very much dominated by a treatment­ focused, interventionist, and technical philosophy that reflects patterns and understandings of dental disease that were current over 80 years ago, and ultimately date back to the surgical origins of the profession. This approach emphasises a biomedical and reductionist understanding of disease causation and a belief that treatment and high­ technology intervention will ultimately restore oral health and so-­called dental fitness.” and that “…the training of dentists prepares them to be disease­-centred rather than patient­-centred or health­-centred.”

Given the information imbalance between dentist and patient, the patient has little chance to detect if “commercial pressures and incentives fuel an interventionist approach and risk unnecessary and inappropriate care.”


While we would love to provide conclusions, we might have to step back and first raise some questions fueling a comprehensive public debate that includes dental professionals and patients. As pointed out earlier here, asking the right questions is an important first step—often harder than finding the answers.

Duckett and Nemet ask three fundamental questions:

1) What is the purpose of private health insurance and private health care in a universal, publicly funded system?

2) Do the current design features of the PHI system, including incentives, penalties and regulation, support the desired role of PHI in the overall health system?

3) Does government support for PHI and private hospital care promote overall economic efficiency and the most effective and equitable use of government resources?

The Lancet papers state “Dentistry is in a state of crisis. 21st century dentistry has largely been unable to combat the global challenge of oral diseases.” which begs the question what kind of fundamental changes are needed to improve oral health outcomes?

We would like to add the following questions:

1) What might be an acceptable alternative to private health insurance to pay for dental care?

The federal body of the Australian Dental Association argues that an alternative to taking out private health insurance to cover the cost of dental treatment would be the establishment of health savings accounts. The stated benefit of this model of funding care would be greater consumer control, as well as the benefit of not losing the amount available to expend on care with the passing of each year if benefits are not used.

But is this only an answer for those who can afford to set aside money to begin with? For those individuals and families who can ill-afford the costs of insurance premiums, is it possible that regular payments into Health Savings Accounts may also be as equally unachievable?

2) What about other savings being used? Is paying for dental treatment from of savings damaging Australia’s future?

Patients are increasingly turning to their accrued superannuation funds to cover the cost of dental treatment. A quick Google search reveals dental practices eager to help patients navigate the process of having their funds released.

The World Economic Forum has recently reported that in many countries, including Australia, the amounts saved for retirement are not increasing at the same rate as life expectancy, leaving pensioners outliving their savings by as much as a decade. Should we be cautious of normalising dipping into retirement savings early to fund dental treatment?

The recent draft proposals and consultations documents that the Treasury released as part of its Review of Early Release of Superannuation Benefits suggest that the release of funds to cover the cost of dental treatment to remedy acute or chronic pain is justified. Is this not a worrying indication of a further slide towards the acceptance of dentistry being excluded from health more generally? Should we be concerned that the government is supporting the release of personal funds, dedicated towards the security of citizens in their later years, to fund essential treatment to relieve dental pain and suffering?

Is this not a worrying indication of the government’s willing complicity to allow the further transition of dental treatment, which should be an essential state-funded service, into a luxury purchase that expands beyond the affordability of most?

Dr Alexander Holden is Senior Lecturer in Dental Ethics, Law and Professionalism and Head of Subject Area – Professional Practice; Professor Heiko Spallek is Head of School and Dean; both at The University of Sydney School of Dentistry.

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