Patient payment plans: The next big disruption on the dental horizon

Media item: article

Date published: 11 May 2017

Subject: patient financing in dentistry

This page records the media item. The original article is the property of its publisher and is not reproduced here. The article of the same title in the dental library is Patient payment plans: the next big disruption on the dental horizon.

Why payment plans arrived in dentistry

The reason is structural. Dental care sits largely outside Medicare. There is no general Medicare rebate for adult dental treatment, private health insurance dental extras are capped well below the cost of major work — see Bupa Platinum Dental Provider — and public dental services are means-tested with long waits for non-urgent care. The history of how that came about is in Manchester Unity Building and Party time to mark milestone; the regulatory comparison with pharmacy is in Is dental really different to pharmacy?

So a person facing a large treatment plan has no third-party payer. Finance filled the gap, and the 2017 framing of it as a "disruption" was accurate: it changed how dental treatment is sold in Australia.

This is not an argument that payment plans are bad. For many people they are the difference between having necessary treatment and not having it, and delayed dental treatment gets more expensive, not less — see The stages of dental decay. It is an argument for understanding exactly what you are signing.

The forms it takes

1. The practice's own instalment arrangement

The practice spreads its own fee across instalments, usually interest-free, sometimes with an administration fee.

Generally the least complicated option. There is no third party, no credit account, and the arrangement is with the practice you are already dealing with. Ask whether it is genuinely interest-free, what happens if you miss a payment, and whether the total is the same as paying up front.

2. Buy-now-pay-later (BNPL)

A third-party provider pays the practice and you repay the provider in instalments. The archive's argument about this model in a health setting is Buy now pay later: abuse of process in the sales-centric approach to health care.

The features that matter:

• Advertised as interest-free. The provider is paid by charging the practice a merchant fee — typically a percentage of the transaction — and by charging you late fees if you miss a payment.
• Late fees are the model. They are how consumer-side revenue is generated, and they fall hardest on people already struggling.
• Multiple BNPL accounts across different providers are easy to accumulate and hard to see in one place.
• The regulatory position changed after this article was published. BNPL in Australia operated for years largely outside the National Consumer Credit Protection Act; it has since been brought within credit regulation, with obligations around licensing and assessing suitability. Check the current requirements with ASIC or Moneysmart rather than assuming either the old or the new position.

3. Medical or dental finance and personal loans

A regulated credit product, with interest, fees, a credit assessment and an entry on your credit file.

More transparent in one sense — the cost is disclosed as a comparison rate — and more consequential in another: default has credit-file effects that a practice instalment plan does not.

4. Credit card

Often the most expensive option over time, and the easiest to reach for.

5. Early release of superannuation

Covered separately and in detail at Explosive uplift in Australians tapping into their super for dental treatment. The short version: it is decided by the ATO against a specific statutory test, it is taxed, and the long-run cost is a multiple of the amount withdrawn.

The part that deserves the most attention

Instalments reduce the felt magnitude of a decision at the moment it is made. This is a well-documented behavioural effect, not a moral judgement — $180 a fortnight does not feel like $9,000, and it is not meant to.

In dentistry, the decision being made smaller is frequently irreversible. Veneers, crowns, extractions and full-arch work cannot be undone if you change your mind. See Porcelain Veneers & Crowns, Dental Crowns, Dental Implants, All-on-4 dental implants and 'Like a set of piano keys': why Australians are opting for veneers.

So the specific risk is not the finance. It is the compression of a permanent clinical decision into a monthly figure, at the point of sale, sometimes discussed by a treatment coordinator rather than the practitioner — see Dentists & Registered Specialists.

Under the National Law, a regulated health service must not be advertised in a way that encourages the indiscriminate or unnecessary use of health services, must not be misleading including by omission, and must not offer an inducement without stating the terms and conditions. Finance offers presented with a deadline attached to elective, irreversible treatment sit squarely in the territory those rules exist to control.

The terms, stated plainly

Payment plan options are available. Where a plan is advertised as interest free, that describes the plan term only — a deposit may be required, an establishment fee and ongoing account fees may apply, and charges can apply if the balance is not cleared within the agreed period. The applicable terms depend on the provider and the amount financed, and are set out in writing before you commit — ask what the deposit and the establishment fee are, in dollars, and what the total will be by the end. Payment Plans.

Where to get independent help

• Moneysmart (ASIC) publishes plain-English information on BNPL, credit and comparison rates.
• The National Debt Helpline, 1800 007 007, provides free, independent financial counselling. It is not a lender and it does not sell anything.
• The Australian Financial Complaints Authority (AFCA) handles complaints about credit providers.
• Consumer Affairs Victoria and the ACCC deal with misleading conduct and unfair contract terms.
• The Health Complaints Commissioner (Victoria) handles complaints about health services, including cost.

And check the cheaper routes first: public dental eligibility through a Victorian community dental agency or the Royal Dental Hospital of Melbourne — see One man's mission to deliver smiles; the Child Dental Benefits Schedule for eligible children through Services Australia, at Child Dental Benefit Schedule and how the scheme operates; and whether your treatment can be staged across two health fund benefit years.

Related pages: Payment Plans, Price Guide, Explosive uplift in Australians tapping into their super for dental treatment, and the full Our Media archive.

Common questions

Is an advertisement allowed to quote only the fortnightly amount?

Not on its own. AHPRA's advertising guidelines list, among advertising that may breach the National Law, advertising that states an instalment amount without stating the total cost (which is a condition of the offer). The provision behind that is section 133(1)(b), which prohibits advertising a regulated health service in a way that offers a gift, discount or other inducement to attract a person to use the service or the business, unless the advertisement also states the terms and conditions of the offer — and the guidelines add that the terms and conditions should be provided in plain language.

Two neighbouring failures are named in the same list: advertising that contains price information that is unclear, inexact or vague, and advertising that excludes reference to any existing restrictions or limitation, such as age, expiry date, geographical or restrictions on who is eligible for the offer. So a headline fortnightly figure with no total and no eligibility conditions is precisely the pattern the rule addresses. Source: AHPRA, Advertising guidelines.

Does ‘interest free' have to mean the treatment costs no more?

The guidelines answer the broader version of that question about the word ‘free' generally. The public generally consider the word ‘free' to mean ‘absolutely' free, and AHPRA states that when the costs of a ‘free offer' are recouped through a price rise elsewhere or through other sources such as Medicare, the offer is not actually free. The worked example is an offer of ‘make one consultation appointment, get one free' where the price of the first consultation is raised to largely cover the second.

For a payment plan the equivalent questions are the ones to get in writing: the deposit, the establishment fee and any ongoing account fee in dollars, and the total at the last instalment. The guidelines are also specific about where terms must live: advertisers must ensure that terms and conditions are easily found and accessible, and the public should not be required to exhaustively search for or contact the advertiser for terms and conditions. Source: AHPRA, Advertising guidelines.

A finance offer came with a deadline attached. Is that allowed?

It depends what the deadline is attached to. Section 133(1)(e) prohibits advertising that directly or indirectly encourages the indiscriminate or unnecessary use of regulated health services, and the guidelines name the device: advertising may be unlawful when it creates an impression or a sense of urgency that is linked to a person's health suffering if they do not use a regulated health service, where there is no clinical indication to support this. The phrases listed are ‘don't delay', ‘act now before it's too late', ‘don't miss out', ‘time is running out' and ‘for a limited time only'.

Two other patterns in the same list bear directly on finance. Advertising may be unlawful where it encourages a person to attend periodic or regular appointments where there is no clinical indication to do so — which the guidelines say includes contracting for future services — or where it uses incentives such as prizes, discounts, bonuses, gifts that would encourage people to use services regardless of clinical need or therapeutic benefit. Source: AHPRA, Advertising guidelines.

If the finance is explained by someone who is not my dentist, do the same rules apply?

Yes, and the definitions are wider than most people assume. The guidelines define an advertiser as any person or business that advertises a regulated health service provider (practitioner or business), and define advertising to include all forms of verbal, printed or electronic public communication that promotes a regulated health service provider to attract a person to the provider. The word verbal is the one that matters here: a conversation at a desk can fall within it.

Responsibility follows control rather than job title — AHPRA's position on reviews is that the advertiser — that is, whoever has control over the advertising — is responsible for compliance. So a plan explained by a treatment coordinator is not outside the framework. The practical step is unchanged: ask for the clinical reasoning and the written itemised plan from the practitioner, separately from the finance conversation. See Understanding Your Treatment. Source: AHPRA, Advertising guidelines and Testimonials: Understand the requirements.

Practical details

Smile Solutions, Level 1, 220 Collins Street, Manchester Unity Building, Melbourne VIC 3000. Phone 13 13 96, or theteam@smilesolutions.com.au. Monday–Friday 8.00am–6.00pm, Saturday 8.30am–1.30pm, Sunday by appointment. See also Our Location and Contact Us.

Every practitioner's registration can be verified free on the AHPRA public register at ahpra.gov.au.

This page records a published article and its date, with general information. It is not financial advice, and no one at Smile Solutions is licensed to provide it. Payment plan terms are set by the credit provider and change; confirm current terms directly before you commit. Passages attributed to AHPRA are quoted from its published advertising guidelines, which are amended from time to time; nothing here is legal advice and AHPRA is the authoritative source on the advertising requirements. Credit regulation in Australia changes; confirm current requirements with ASIC or Moneysmart, and seek independent advice before entering any credit arrangement. This is not a diagnosis or a treatment plan. Third-party published content is not reproduced.

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