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The right shield: An insider's view on the dental indemnity market

Blog Author Kevin Lewis

Blog Date 30/07/2019

With the government having recently consulted on whether current indemnity arrangements offer the right protection for both patients and healthcare professionals, it’s time to reflect on the current state of the dental indemnity market.

Discretionary cover – fit for the 21st century? 

Having spent 27 years of my career living and breathing discretionary indemnity both in the UK and in many other countries around the world, I am in a good position to appreciate both its strengths and weaknesses. For more than a century, discretionary cover has served clinicians and their patients very well, largely by being flexible and responsive to the changing nature of healthcare. Whilst there have been a number of high-profile exceptions to that in recent years, nobody is suggesting that discretionary providers are doing anything wrong or illegal when they decline claims. However, on the rare occasions when they do, it can become headline news.  

Who’s making the rules? 

What many often misunderstand about the mutual organisations, is that they are essentially private organisations which are unregulated and free to make and change their own rules virtually at will. Whilst that may be fine while fellow clinicians are making and applying the rules, you would have to look very hard to find many doctors, let alone dentists, in the upper tiers of management of the mutuals these days. So is the voice of dentists being heard above more pressing medical concerns? Do dentists truly still control how the organisations’ assets are deployed?  

An unregulated market 

Given the complexity of the market, for many the decision to purchase their indemnity product is based heavily upon belief and trust, rather than detail and informed evaluation. Regulated insurers are subject to a rigorous prudential regime that requires them to hold adequate reserves to meet insurance claims and capital to absorb unexpected liabilities. In contrast, there is no contractual liability for discretionary organisations to accept and pay out on future cases and no requirement to meet any solvency standard. Without any independent regulatory oversight, it is left to the individual to satisfy themselves that they are adequately protected and to the discretionary organisations to decide whether they hold sufficient reserves. It is this inconsistency and lack of transparency that seems to be concentrating the government’s resolve to act. 

What does the future hold? 

The government’s consultation concerns itself specifically with indemnity arrangements for clinical negligence claims, and therefore patients' access to compensation. It is clear that the government strongly favours bringing all non-state provision of medical indemnity for these claims into a regulated environment, which probably heralds the end of discretionary indemnity in UK healthcare. Indeed, the GDC's response to that consultation confirms its own support for this proposal. 

The government believes that its proposals can deliver greater certainty for both patients and healthcare professionals who sit outside the scope of NHS Indemnity. Unsurprisingly, there are calls from some existing providers to maintain the status quo and allow discretionary indemnity to continue in the UK. But in the path of such a seemingly irresistible force and given recent events, this seems increasingly unlikely. Having given so much of my professional career to supporting dental colleagues with discretionary indemnity, I am saddened to see it being consigned to history here in the UK (just as it was in Australia 16 years ago), if the consultation does indeed confirm this as the way ahead.  

Kevin Lewis  
Special consultant to the BDA

Read Kevin’s full article in BDJ In Practice (Member log-in required).