The dental benefits market is changing. Pam Whelan runs through what brokers need to know to keep up to date
Dentistry is a fast changing marketplace, and 2011 will almost certainly be another year of upheaval for the profession. These changes will not only have an effect on individual dentists, but on company benefit schemes and, subsequently, the brokers that supply them. Dental is one of the fastest growing corporate benefits, so it is important for brokers to understand and keep up to date with the latest news, in order to provide the best understanding to their clients.
The information below is designed to provide a summary of the biggest changes and predictions for dentistry over the next few years, and to provide the guidance and support advisers might need to sell dental benefits in the future.
The new coalition government is certainly making its presence known when it comes to budget cuts, and the dental profession will not remained unscathed. On paper, the NHS budget looks positive and beneficial, with an increase from £104bn to £115bn over the next four years. However, it is important to take the £20bn of efficiency savings into account in this equation. Also, with the ring-fencing of dentistry budgets coming to an end in April 2011 and funding getting tighter across the board, it seems unlikely that the NHS can support further investment in dentistry.
Budget cuts have already made themselves felt in the dental profession with a two-year pay freeze for all NHS staff earning over £21,000 per year. Also, Primary Care Trusts (PCTs), the local commissioning bodies responsible for providing NHS services, including doctors and dentists, are now being phased out. These are currently at the centre of the NHS and control around 80% of the NHS budget so their removal will create major upheaval for all the professions under their remit.
The Care Quality Commission (CQC) has also now taken over responsibility and registration of all health and social care providers in England to ensure that all patients receive a common standard of care. From April 2011 the CQC will be responsible for the registration and oversight of all dental practices in England - both NHS and private - and have set essential standards of quality and safety which must be met. In order to adhere to these standards it is likely that each practitioner will incur recurrent costs of at least £20,000 per year, inevitably affecting charges to the consumer in the years to come.
Employee dental benefits
Although it is not yet clear how this increase in the dentists' cost base will affect patient charges, it seems unlikely that they will not be affected at all. Dental costs have, in fact, been on the rise for a number of years already, so future increases could make budgeting for dental care more difficult for individuals. This however, could make access to a dental benefit through an employer all the more appealing, and with 64% of employees already aware of the rising cost of dental care, this type of benefit has a clearer and more tangible monetary value.
Then there are the proposed changes to the NHS dental contract to take into consideration. Piloting of the contract is already underway, and it seems increasingly likely that a ‘Capitation, Registration and Quality' model will be taken forward. If capitation is calculated using a deprivation scoring system, those in the greatest need will get the most amount of capitation. This sounds like a good idea in theory, but it does mean that dentists will have no control over the level of capitation for their patients. Deprivation could be worked out regionally, which means that NHS dentists in fairly affluent areas could see their income drop considerably.
If the changes to the dental contract in 2006 are anything to go by, this type of upheaval could be a huge benefit to brokers selling dental benefit packages, as it would create an even higher demand. Also, brokers are not only in an ideal position to monitor the healthcare provision in their areas, but they can use this information, and that from expert providers, to inform their clients.
Furthermore, the cost pressure being put on dentists means that dental benefits are becoming more relevant and desirable to employees and, with almost 60% attending the dentist at least once a year, you would be hard pushed to find another health benefit with a higher potential take-up.
It is reasonable to predict that there will be a shift in companies' attitudes to benefits in 2011, with a far greater focus on employee engagement and communication across the board, not just among the very largest companies. In fact, when choosing a dental plan, the key factor for these company decision makers is the simplicity of the product. Employers want to ensure employees can easily understand and take advantage of the benefits they are offering, so it is crucial that brokers can provide not only the products, but the means to communicate these to employees and add value to their own service.
However, different companies will have different priorities and larger businesses will always have a greater focus on cost and return on investment (ROI) especially - 23% of companies cite cost as a key factor. Some dental benefit providers can offer a range of high-value services and support for free, as part of their package, so it is worth using an expert dental company, rather than a general insurance provider.
They can not only provide experience that is based on the latest developments in the dental industry, but easy to use products and a range of broker sales-aids to help you communicate appropriate messages to your clients.
Flexible benefit growth
As far as future predictions for the product market go, it is expected there will be an even larger growth in the flexible benefits arena, particularly with SMEs, as well as an increase in ready-made packages or ‘Flex in a Box' designs, which many brokers are already developing. This is good news for the dental market on the whole, as dental is still the most popular flexible benefit and fits into this environment really easily.
Showing how much a business spends on benefits is easy to calculate, but showing their worth is quite another thing. That is why many believe there will be a marked increase in the focus on communicating and reinforcing the value of benefit packages, especially with return on investment being such a key factor for so many businesses.
Companies are likely to turn to brokers to offer guidance and add value in this area - making it of paramount importance that the adviser can quantify and understand the value of the benefit package they recommend. Offering clients some way of monitoring value based on considerations such as retention, recruitment and perceived value is, therefore, extremely worthwhile. The good news is that, for dental plans, the information advisers need is already out there.
For example, 77% of employees believe that good dental health supports overall wellbeing and 59% of employees would consider taking out a dental plan if their company offered it.
With so much change on the cards for the future, it is no surprise that benefit providers are developing their range of products and services. Even dental payment plan specialists with 25 years of industry expertise are reinvigorating their products to meet broker demand and move with the times. In order to show companies not only your worth but the longevity of your services, it is important for brokers to do the same and keep market changes at the forefront of your minds. It is good to know that help is out there to allow you to do just that, however...it is up to you to take advantage of it.
Pam Whelan is corporate dental sales manager at Denplan
