Fund allocation within Australian dental care: an innovative approach to output based funding

Abstract

Over the last 15 years in Australia the process of funding government health care has changed significantly. The development of dental funding models that transparently meet both the service delivery needs for data at the treatment level and policy makers' need for health condition data is critical to the continued integration of dentistry into the wider health system. This paper presents a model of fund allocation that provides a communication construct that addresses the needs of both policy makers and service providers. In this model, dental treatments (dental item numbers) have been grouped into eight broad dental health conditions. Within each dental health condition, a weighted average price is determined using the Department of Veterans Affairs' (DVA) fee schedule as the benchmark, adjusted for the mix of care. The model also adjusts for the efficiency differences between sectors providing government funded dental care. In summary, the price to be applied to a dental health condition category is determined by the weighted average DVA price adjusted by the sector efficiency. This model allows governments and dental service providers to develop funding agreements that both quantify and justify the treatment to be provided. Such a process facilitates the continued integration of dental care into the wider health system.