With the changes to NHS dental treatment now firmly in place, Pam Whelan explains how this is having a positive effect on private dental insurance plans.
NHS dentists are by all accounts "endangered species" and certainly, recent news headlines would have you believe, nigh on extinct. In the main, it would appear that the new NHS contracts issued in 2006 "present a significant business risk" for dentists in comparison to working privately according to Derek Watson, chief executive officer of the Dental Practitioners' Association (DPA).
The impact is evident in a recent survey by the Citizens Advice Bureau (CAB), which revealed that 7.4 million people have been unable to access an NHS dentist in the last 18 months, citing "lack of access" as the main reason. And access is likely to become increasingly difficult as more dentists opt out of the NHS due to the uncertainty of earnings offered by the contracts.
Not good news for patients. And not good news for employers, who could potentially experience an increase in absenteeism as employees seek time off to attend dental appointments far from the workplace or worse still, time off for potential emergency treatment as a result of neglecting their teeth or simply not being able to afford private care.
However, there is growing demand for employers to safeguard the wellness of employees by implementing a range of stay well benefits as opposed to get well packages - and dentistry is emerging as a priority. Speaking at the British Heart Foundation's Well at Work conference recently, Health Secretary Alan Johnson called for employers to do more to promote the health and wellbeing of their staff. He said: "The next stage is to incorporate work-life balance with work-health balance."
Knock on effect
What does this mean in terms of dental insurance sales? According to Roger Matthews, chief dental officer at Denplan, more and more people are opting for dental plans to improve and maintain their oral health and to alleviate concerns over access and cost. "Since the introduction of the new contract in 2006, we have experienced just short of 100% growth in the number of employees covered, reflecting findings of the CAB survey that of the 7.4 million respondents unable to access an NHS dentist since 2006, 4.7 million had sought private treatment and 2.7 million have gone without."
Matthews adds: "Given the general consensus among dentists, next year's contract review is set to have a similar reaction with more dentists again expected to opt out of the NHS in order to maintain control of their practice and deliver higher standards of patient care."
It's no surprise then, that employers and employees are fuelling growth in corporate dental plans. Whether it is down to the change in contracts or simply increased media coverage, it would appear that employees in general, place far greater value on dental plans than they have done previously, explains Peter Smith, principal consultant at employee benefit provider Benefex: "Where previously we would have prompted dental as a flex benefit to our clients, we are now experiencing a greater number of proactive requests from employers for dental plans as they look to respond to employee demand."
"From a 'nice to have' option, dental has become a 'must have', with figures suggesting employees prioritise dental alongside private medical insurance (PMI) and pension plans. This trend has led to companies wanting advice about which dental plan best suits their business, budget and employees," he says.
Of the new flex schemes implemented by Benefex last year, all included dental, experiencing a take-up of up to 25%.
When it comes to renewal schemes, Benefex is also experiencing demand for higher levels of cover, where employees are finding that the basic options are not enough. "The request for more comprehensive levels of cover could reflect that more people are going private and in doing so are discovering that basic dental options do not cover their costs. It perhaps also reflects changing attitudes towards oral health, with increased media coverage raising awareness not only regarding appearance but general health too," says Smith.
"More and more employers are offering dental cover alongside traditional PMI plans, as their perceived value grows among employees," adds Matthews. "Unlike traditional insurance-type products, dental plans are designed to be used regularly and are therefore highly valued."
Findings in a survey among employers appear to corroborate this, with dental plans featuring second highest on their list of flexible benefits. According to the Employee Benefits/Tower Perrin Flexible Benefits Research January 2007, 83% are offering dental packages.
Dental schemes are typically underwritten on either a community-rated or experience-rated basis. Matthews believes in the strength of a community-rated approach as this does not penalise companies whose employees regularly use the plans. Furthermore, companies can forecast their dental benefit expenditure more accurately in the knowledge that premiums will not be adversely affected as a result of employees utilising the scheme.
must have benefit
The table on page 26 shows typical costs for dental treatment across NHS and private dentists and highlights why there has been such an increase in demand for corporate dental plans. According to Employee Benefits research May 2007, 49% of employees took up schemes introduced by their employers.
So what does the future hold? "Dental plans give staff the direct benefit of high standard, affordable dental care which at present is a valuable commodity, as we have seen in the media. Due to the increasing demand of the service, businesses are increasingly finding that the inclusion of a dental plan within a benefits package is helping in both recruiting and retaining staff. The market has seen such a strong growth in the company take up of dental plans in the last two years because they are an affordable, sustainable and valuable employee benefit," concludes Matthews. n
Pam Whelan is corporate sales manager at Denplan
