A visit to the dentist has always been a fearful experience, but now patients’ wallets are taking a share of the pain.
Dental treatment on the National Health Service (NHS) is increasingly tricky to find. One in four patients is treated privately, while two out of three dentists refuse to accept NHS patients.
But private fees vary enormously from practice to practice and complaints are growing that many charge well over the odds.
High charges may mean a new Mercedes for the dentist, but how do they affect insurance companies and intermediaries selling dental care plans?
The Consumers’ Association has been running a high-profile campaign highlighting pricey and erratic private dental charges. In September 2001 it published a survey showing private charges are typically two-and-a-half to three times higher than NHS fees. Some practices charge five or six times NHS prices.
Where you live makes a difference. Private patients in Yorkshire typically pay between £24 and £35 for a simple check-up, scale and polish, while those in Edinburgh pay between £35 and £50. In one Edinburgh practice contacted by the Consumers’ Association, the bill was £88.50.
The NHS guide price for a gold crown is £70.72, but the survey discovered prices ranged from £125 to as much as £500.
While NHS charges are fixed, with adult patients paying 80 per cent of the cost and the state paying the rest, private dentists may charge what they like. The British Dental Association (BDA) advises dentists to indicate charges and give patients a full treatment plan with costs prior to starting any work, but patients have no point of comparison. All they can do is shop around local practices.
In October 2001 the Consumers’ Association lodged its first-ever “super complaint” to the Office of Fair Trading (OFT). The Competition Act 1998 gives specified organisations the right to file complaints against large groups, which are then subject to a fast-track investigation by the OFT with a reply in 90 days.
Dentists have defended their charges, saying new technology and subjective clinical assessment partly explains the price differentials. A BDA spokesperson says: “Private dentists have different staff and premises overheads and offer different services. A private surgery in London will cost more to run than one in Belfast.
“Simply comparing cost is misleading and the criticisms have been sensationalised.”
Dental capitation plan provider Denplan, owned by PPP healthcare, offers dental treatment plans to more than one million patients. It sells through dentists rather than intermediaries.
Managing director Stephen Gates says: “Each Denplan patient is examined individually and placed in a price band according to their oral healthcare needs. Patients know in advance exactly what their outlay on routine dental care will be.”
Costs vary according to the individual’s dental health, but Denplan says 90 per cent of patients pay between £7.30 and £18.85 a month, with the average payment being £12.95. Charges may be reviewed annually.
A number of insurers offer corporate dental insurance policies, including BCWA, National Dental Plan (NDP), Norwich Union and WPA. The market is estimated to be worth £12m a year.
Some argue that growing discontent over private dental charges and the widely-reported shortage of NHS dentists should benefit insurers and intermediaries. Emerson Alder, a broker with Private Medicine Intermediaries in Cheshire, says rather than deterring employers from buying insurance, high dental charges have spurred many into action. “They see dental insurance as a low-cost way of keeping staff happy. It has been a growing part of our business over the last year. It is particularly attractive to companies with staff working in different areas of the country, because a scheme operated through dentists, such as Denplan, is too difficult to administer. We now routinely discuss it with employers when they renew employee benefits.”
Howard Hughes, the sales and marketing manager at BCWA, agrees bad publicity for private dentists can be good news for dental insurers. He says: “We expect public debate over private dentistry costs to boost the profile of dental insurance and increase demand.” Employee dental insurance is undersold and could make a vibrant addition to more static group private medical insurance, he says. “We have an emerging market. As more people are forced to move from the NHS and see their dental charges rise more than 300 per cent, interest will surely grow.”
Cover has attractions for both employer and employee. “People rarely use PMI, but everybody should see the dentist at least twice a year, which makes it an attractive addition to an employer’s portfolio of benefits. Few intermediaries will sell dental cover on its own, but it makes a useful add-on benefit,” says Hughes.
BCWA has sold its plan Confident since 1994, solely through intermediaries, but sales remain low. “One drawback is that lower premiums mean commission is quite low,” says Hughes. “The average PMI scheme costs around £1,000 per individual. With ten per cent commission even a small or medium group scheme could earn the adviser around £5,000 or £10,000. By comparison, Confident costs £97 per staff member.”
Insurer WPA launched its own group dental insurance plan Providental last year and communications director David Ashdown reports a “very positive response”. He says: “Companies are increasingly finding PMI expensive, particularly with the economy shaky, but dental insurance looks a good deal. We charge £86.30 annually per staff member, making dental cover a low-cost but highly perceived employee benefit.” WPA pays 25 per cent initial commission to intermediaries and five per cent at renewal.
Ashdown says: “This is not a great financial incentive but selling dental insurance does help keep the intermediary in with their client and help them sell other products later.”
Hospital cash plans including dental benefits and specialist dental cash plans, are sold by a number of companies including Boots, Exeter, HSA Healthcare and WPA. Some can be sold through intermediaries, for example WPA’s Health Saver is on a similar commission basis to Providental.
Ashdown says because many dental insurance and cash plans reimburse only a percentage of costs, within annual limits, they have some protection against dental price rises.
National Dental Plan offers six levels of dental insurance cover, ranging from an NHS-only version to a comprehensive plan covering the most expensive private dentistry. These policies cover 100,000 individuals through 275 different employers.
Operations director Sharon King says dental insurance has proved popular as a compulsory, flexible and voluntary benefit. “We pay ten per cent commission on company-funded policies, 7.5 per cent on flexible policies and five per cent on voluntary.”
Instead of reimbursing a percentage of fees, the plan pays set benefits. If the dentist charges more, the patient must stump up the extra.
“We recognise some companies want a high level of plan to meet increased dental charges, which means rising costs do have a very significant impact on our business. We work hard to shield companies from rising premiums. Premiums depend partly on claims history. If claims are low, we can absorb rising dental costs and keep premiums steady.”
King says publicity over rising dental charges and the shrinking number of NHS dentists has proved good and bad for dental insurance. “It has raised company and employee awareness, which is good, but insurers have to keep pace with price rises and look very carefully at the benefits we offer to retain business.”
PMI is setting a bad example to potential customers. Employers stung by soaring medical inflation fear dental insurance could mete out the same punishment. “Although dental cover is much cheaper, many are nervous they could get stuck with another costly benefit. We have to reassure them that dental insurance premiums will be far more stable, but it has been tarred with the same brush,” she says.
According to Peter Bye, a partner at intermediary The Private Health Partnership, dental charges are not the only factor pushing up insurance premiums. Large insurers have hefty overheads and administration costs, which can make the product too expensive for many.
The Private Health Partnership runs its own dental scheme, Complete Dental Care. This covers general treatment such as fillings and extractions, more expensive work such as root treatments, crowns, bridges and dentures, and other benefits such as emergency cover. Unlike Denplan, individuals can use the plan with any dentist. Bye says individuals generally buy dental cover to spread out the cost of charges and protect themselves against major bills.
He says: “Plans must therefore be low-cost – they cannot charge £300 a year to cover £100 worth of costs. Our standard plan starts at £102 for an individual, but costs £75 for a group scheme with between 20 and 49 employees. We also offer an executive plan, starting at £143.”
Bye says the plan contains costs by limiting benefits to three times NHS charges. “Some dentists charge an absolute fortune, but we don’t design the plan for them. More reasonable dentists should be covered. If the client uses an expensive practice, they have to pay the shortfall,” he says.
The disruption to NHS dentistry over the last decade offers opportunities to sell dental insurance, particularly as a group benefit. But dental insurers will have to work hard to keep their plans competitive, particularly if the cost of a Mercedes continues to rise. Much may hinge on the outcome of the OFT’s deliberations on the Consumers’ Association first super complaint.