The benefits of compounding

There’s an article in today's paper about the various health procedures that you can pay for with your super. This includes dental treatments such as root canal, extractions, implants and cosmetic work such as veneers.

According to the article, there were more than 50,000 applications last year and 60% get approved.

As with any decision, the way that the population uses such opportunities can morph into quite unexpected consequences.

It's hard to predict cultural shifts, lifestyle expectations of the general population, the power of marketing driving expectations of quality of life, and the creativity of the health professions and those that coach them.

Now I’m a big believer in the power of compound interest, so I find the thought of encouraging patients to impact their future financial security to pay for dental treatment contrary to my beliefs.

I am in a privileged position of being financially secure, aware, and also in good health. I get that.

It’s hard to weigh up the health benefits, the psychological benefits and the positive social impact of, for example, weight loss surgery or rehabilitating an terminal dentition funded this way with taking that money from super. It is possible that the patient will be able to enter the workplace when they previously could not, get promoted to a better role or work for longer in better health and spend less money on what would have been future health problems. They may well end up better off.

But is anyone helping them make that calculation prior to signing the forms?

And who is helping them sign the forms?

Is it a financial advisor that specialises in helping people access their super in these circumstances, in which case who are they working for; the patient or the dentist?

I wanted to find out how this all worked, I have no intention of implementing this in my practice. I also wanted to find out what the sales pitch was.

So last year I listened to an educational webinar that ”explained” how this would work for a dental practice. It was to “help you not make errors along the way” where you could fall foul of the ATO.

Fair enough. That's useful for dentists to know.

Ultimately, the financial advisor had a neat product where you could track your patients throughout the process. You were encouraged to request access to the special account that the money drops into so you could withdraw it to prevent the patient being tempted to use it for something else.

The pitch was that we almost had a duty of care to offer payment schemes such as this to our patients in order to help them access the care they need.

For a people pleasing dentist with ever increasing overheads and a slowing of demand, it’s a tempting propostition.

As with anything, if early access to super can be used for good, it can also be used for bad.

Something I learned today is, that according to this article, clinicians are not allowed to promote this to patients. The patient has to ask for it. There are “anti-hawking provisions”, according to Sarah Abood of the Financial Planning Association.

A quick Google search brings up many dentists that promote early access to super on on their websites.

In our drive to help patients, are we serving them well?

As dentists, we need to make sure we do no harm whether this is clinical, psychological or financial.

Have a great week

Rosie