Introduction by Croakey: In a recent analysis of why Medicare is not actually the “universal health insurance scheme” that it is claimed to be, health policy analyst and Croakey editor Jennifer Doggett said the lack of coverage for dental services was just one of many examples of how Medicare “fails the universality test”.
Amid growing momentum for Medicare reform at a time when waiting times for public dental services are blowing out to well over a year in many jurisdictions, it is timely to consider the history of efforts to improve access to dental care.
In the first of two in-depth articles on this topic, regular Croakey contributor Charles Maskell-Knight says there are many lessons for would-be reformers from an examination of the “dental policy turbulence of the last twenty years”.
Charles Maskell-Knight writes:
In a recent article I suggested that one of the three priorities for an incoming Federal Minister for Health should be expanding subsidised access to dental care. The Greens election policy included expanding Medicare to cover dental services, and leader Adam Bandt in his speech to the National Press Club on 3 August made it clear that this is a priority policy objective for the party.
If the Albanese Government is minded to consider new dental policies, it should be aware of the history of Commonwealth dental policy over the last twenty years, which has had more twists and turns than an episode of Midsomer Murders.
In this article I set out the history, and draw out what seem to me to be the main lessons for the future. A later article will set out a proposal for future dental policy which will avoid the pitfalls of some past schemes.
The initial dental program
Apart from the subsidy for privately insured dental services implicit in the private health insurance premium rebate, the Howard Government’s first foray into funding dental services began in 2004 when it introduced so-called Extended Primary Care (ECP) items under the MBS.
Under these arrangements a GP could develop an EPC plan for a patient. If the patient’s chronic diseases were exacerbated by dental problems the GP could refer them to a dentist, who could claim for three services a year with a maximum total rebate across all three services of $220. While these benefits were barely adequate to cover assessment, they were completely inadequate as a contribution to treatment costs, and patients paid large out of pocket costs.
Over the three years 2004-07, a total of only 16,000 services were provided, compared with an initial estimate of 70,000 services per annum.
In the lead-up to the 2007 (election) budget, the Government asked the Department of Health to model a range of options for a dental benefits program. Pages and pages of tables were produced showing the costs for different groups (concession card holders and FTB-A families, concession card holders, all aged pensioners, full aged pensioners) and different scope of services and benefit caps.
But no matter how the parameters were tweaked, the cost was deemed too high.
The Government decided instead to add a much wider range of diagnostic and treatment items to the EPC program and increase the benefits cap to $2,000 per annum. Following pressure from the dental profession the cap was increased in August 2007 to $4250 over two years, and benefits for dentures were included.
The new arrangements were known as the Chronic Disease Dental Scheme or CDDS and began on 1 November 2007, three weeks before the Howard Government lost office.
Although the Government expected that “gatekeeping” by GPs would limit access to the new items, this was not the case. While expenditure was originally estimated at $385 million over four years, by the time the program was finally abolished in 2012 the CDDS was costing that much every five months.
The arrangements were subject to considerable criticism by the Rudd/Gillard Governments, and the phrase “dental rorts” was often applied to them. This is not fair: while there were there were some examples of deliberate over-servicing of people in aged care – the most egregious of which led to criminal charges – these were uncommon.
The real problem was the disjunction between the scope of dental services available and the chronic disease related dental needs of patients. For example, patients with functional dentition and no active dental disease but missing teeth were being provided with implants or bridges, with minimal impact on dental function and no impact on their overall health.
Another valid criticism was the distributional inequity of the arrangements: millionaires with an EPC plan could receive immediate private sector dental treatment, while otherwise healthy pensioners with dental problems were added to public sector dental waiting lists.
The program that wouldn’t die
The Rudd Government was elected in November 2007 with a dental policy that included abolishing the CDDS, and using the funding to establish:
- a Commonwealth Dental Program, and
- a Medicare Teen Dental Plan.
The Medicare Teen Dental Plan was established under the Dental Benefits Act 2008, and began from 1 July 2008. It paid benefits of up to $150 per year for an annual dental check-up for children aged between 12 and 17 years in families eligible for Family Tax Benefit A (or children receiving ABSTUDY, Youth Allowance or various other income support payments in their own right).
While an estimated 1.1 million (out of a total two million) teenagers were eligible for the scheme, actual take-up was around 30 per cent.
The 2008-09 Budget also provided for “$290.0 million over three years to establish a Commonwealth Dental Health Program — funding will be provided to the States to supplement existing public services and/or purchase private dental services” and “bring relief for up to 650,000 people on public dental waiting lists around the country”.
However, the program did not proceed, and the 2009-10 Budget noted that:
The Commonwealth dental health program will provide funding to reduce public dental waiting lists. The commencement of the program is on-hold pending the outcome of the Government’s negotiations with the Senate [to close the CDDS].”
The 2010-11 and 2011-12 Budgets contained almost exactly the same language. The Green Senators were refusing to support closure of the CDDS until they were satisfied with the new dental programs.
In early 2012 the Government finally lost patience with the Senate, and the 2012-13 Budget stated that the Commonwealth would be making $345.9 million available over three years from 2012-13 to 2014-15 to provide treatment for those on public dental waiting lists in the States, including ensuring support for Indigenous Australians.
However, it went on to note that:
The Government will redirect currently unallocated Commonwealth Dental Health Program funding towards this Budget’s dental health package. This funding was intended to replace the Chronic Disease Dental Scheme (CDDS) but has been redirected to boost dental services before the CDDS is closed and any new scheme commences. It still remains Government policy to close the CDDS.”
The Budget allocated $69.2 million in 2012-13, $155.2 million in 2013-14, and $119.6 million in 2014‑15. Funding was provided to the states under the National Partnership Agreement on Treating More Public Dental Patients (NPA).
The NPA stated that it was to provide treatment for an additional 400,000 public dental patients. To ensure that the funding provided additional services (and did not replace state funding) and that the 400,000 additional patients were not simply low cost “scale and polish” treatments, the Commonwealth proposed (and the states accepted) measurement of throughput using Dental Weighted Activity Units (DWAUs). Commonwealth funding was only paid for activity additional to the states’ baseline activity.
While the additional funding was successful in increasing public dental output, AIHW data show it did not consistently reduce waiting times. This was due in part to the “honeypot effect” – as the client group became aware services were more accessible, more people joined the waiting list.
“Once in a generation” reform – version one
In mid-2012 the Gillard Government finally agreed with the Greens in the Senate on abolishing the CDDS in return for a dental package billed by then Minister Tanya Plibersek as “once in a generation dental reform”.
The main elements of the announcement were:
- a Child Dental Benefits Scheme (CDBS), under which children aged 2-17 in FTB-A families (and other children eligible for the Medicare Teen Dental Plan) could access up to $1000 over a two-year period in dental benefits for a wide range of diagnostic, preventative, and treatment items; and
- a further $1.3 billion in payments to the states to expand public dental programs over the four years starting in 2014-15. Funding over the four years was planned to be $200 million in 2014-15, $295 million in 2015-16, and $390 million in both 2016-17 and 2017-18. It was to be provided under a new National Partnership Agreement for Adult Public Dental Services (NPA II).
The necessary amendments to the Dental Benefits Act 2008 to support the CDBS were passed by the end of 2012, and the scheme began on 1 January 2014 with an estimated annual expenditure of $600 million.
It should be noted that the decision to establish the CDBS was taken against advice from the dental health experts in the Department of Health. Even before the scheme was established, most children had good dental health visiting patterns, and combined with widespread access to fluoridated water since birth in most of Australia, this meant children generally had excellent dental health.
While over three million children at any one time are eligible for the CDBS, take-up has consistently run at around a third. This is partly because the Liberal Government, which took office by the time the scheme started on 1 January 2014, was not active in promoting it, and partly because many families are covered by private health insurance and use this rather than the scheme.
“Once in a generation” reform – version two
The Abbott Government came to power in September 2013. It was committed to “honour[ing] the arrangements under the National Partnership Agreement for Adult Public Dental Services” and “seek[ing] to transition respective adult dental services to be included under Medicare” once the NPA expired. Like many 2013 election commitments, these were not met.
The first decision the new Government took in relation to dental policy was to defer the introduction of NPA II by a year to 2015-16, to avoid the overlap with the last year of the first NPA. The next decision in the 2015-16 Budget was to move to a one-year agreement only to cover 2015-16, with reduced funding of $155 million rather than the $200 million originally announced. These decisions saved $1,130 million from the previous Labor Government allocation.
In the lead-up to the 2015-16 Budget the Health Minister announced that the Abbott Government was going to “sink its teeth into dental reform”, and that there was a need to “take hold of this once-in-a-generation opportunity for constructive reform”. This media release generated considerable hilarity at the time in dental policy circles, partly because it was less than two years since the previous once-in-a-generation reform, but mainly because the “once-in-a-generation” phrase was also used in a contemporaneous Utopia episode.
In the 2015-16 MYEFO the Government decided (but did not announce) that it would legislate to impose an annual cap on expenditure under the demand driven CDBS. (The ministerial adviser who came up with this cunning plan was unable to suggest how it could be implemented. Presumably as spending approached the cap, dentists would need to seek real time approval for individual patients to ensure that the scheme would cover the cost.) This bizarre decision was designed to generate “savings” that could be used to offset the costs of listing new Hepatitis C drugs.
The results of the dental reform process were announced in the 2016-17 Budget:
The Government will reform public dental services by providing $1.7 billion over four years from 2016-17 for a new Child and Adult Public Dental Scheme (the Scheme) to be delivered by the states and territories (the states) under a National Partnership Agreement (NPA).
All children and adult concession card holders will be eligible for the Scheme and the states will have the flexibility to provide funded services to other groups based on need. Service levels for an individual will not be capped.
The Government will provide 40 per cent of the national efficient price for all dental services provided under the Scheme, with the states providing the remaining 60 per cent. After an initial transition period, growth in Commonwealth Government funding from 2019-20 will be capped in line with growth in the Consumer Price Index and population.
The cost of the NPA will be offset by terminating the Child Dental Benefits Schedule and the NPA for Adult Public Dental Services from 2016-17. Some savings from these two programs have already been included in the forward estimates.”
Following the 2016 election it became clear that the legislation to implement the new Scheme would be defeated in the Senate, and it was withdrawn from consideration.
Current arrangements
The Child Dental Benefits Scheme continues in operation (although the biennial cap was reduced from $1,000 to $800 in early 2017, but then returned to $1,000). Take-up continues to be poor, at around one-third of eligible children, and annual spending is a little over $350 million.
The 2015-16 NPA providing funding to the states for adult public dental services, which was based closely on the concepts underpinning the first NPA, was extended to cover first 2016-17 to 2018-19, and then (successively) 2019-20, 2020-21, 2021-22, and 2022-23. Annual funding of $108 million in only three-quarters of the funding available in 2015-16, and there is no provision in the forward estimates for the NPA beyond the current financial year.
Waiting times for public dental services are blowing out to well over a year in many jurisdictions and over two years in some.
And the private health insurance premium rebate implicit expenditure on dental services continues at almost $750 million a year.
Lessons for the future
What can we learn from the dental policy turbulence of the last twenty years?
First, legislated entitlement schemes are really hard to dismantle. The CDDS lived on for four years after the Rudd Government decided to close it. The 2017 reduction in the CDBS biennial cap was reversed by the Government, but it was almost certainly heading for disallowance in the Senate.
By contrast, grants to the states included in the forward estimates published as part of the budget can be deferred, reduced, or abolished by executive fiat.
Any government wishing to entrench a dental scheme into the future needs to provide a legislative basis for it.
Second, there is a large pool of unmet demand for dental services.
Expenditure increasing to close to a billion dollars a year under the CDDS had very little impact on other expenditure streams, suggesting that services provided under the CDDS were additional not substitute. The first dental NPA increased resources available for public dental services in 2013-14 by about 20 percent, yet waiting times for services increased in many jurisdictions.
These observations are consistent with AIHW pre-COVID data showing that in 2017-18 only a little over half of the adult population had a “favourable” dental visiting pattern (visiting a dentist at least annually), and a third had untreated dental decay.
This suggests that estimates of the cost of extending the scope of dental services will be severely underdone unless they take account of this unmet demand.
Third, the CDDS showed that it is possible to spend a lot of money on prosthodontics such as implants and bridges, most of which will have no impact on ongoing dental disease and very little impact on dental function. The average adult is missing four or five teeth – replacing even one tooth for ten per cent of adults at a cost of $5,000 per tooth would double current total dental spending.
Any proposal to extend Medicare to cover dental items should incorporate a mechanism to ensure that taxpayers only fund services which are necessary to address active dental disease or maintain a functional dentition.
Charles Maskell-Knight PSM was a senior public servant in the Commonwealth Department of Health for over 25 years before retiring in 2021. He worked as a senior adviser to the Aged Care Royal Commission in 2019-20.
Read Croakey’s archive of articles on oral health
