Are we or aren’t we?

John Grant, director of Goodman Grant Solicitors, discusses the dental profession’s chances of seeing a new NHS contract…

The prospect of a new NHS dental contract has been in the pipelines for approximately five years now but, in all honesty, it still seems as unlikely that one will be introduced in the foreseeable future as it ever has.

The primary barrier to the implementation of a new NHS contract, regardless of any of the bold pronouncements this Government has made, is that under the current conditions it is very easy to maintain a tight leash on NHS dentistry’s budget and finances. As it stands, contracts can be issued at a specific value, making it easy for the government to control the total spend.

The value of this to the current Government, which is almost undoubtedly led by the Treasury, cannot be underestimated – and it is almost certainly one of the largest unspoken factors delaying the implementation of a new contract that might compromise this level of control.

But is the introduction of a new contract necessary – or even wanted? Indeed, while it would be fair to suggest that a significant number of professionals have struggled under the current NHS contracts – and many more who actively dislike the system since it pays to spend as little amount of time with their patients as possible – it is unarguable that there have been a number of benefits albeit, not for patients. Indeed, just as the Government may find it useful, so too will practitioners find that knowing exactly how much income they will receive from their contract is of significant benefit in terms of business planning and budgeting.

This has, along with a number of other factors, undoubtedly fuelled the  massive increase in goodwill values of NHS practices as well – which could be worth almost five times what they were before the current contracts were introduced.  As a rough rule, before this time, the goodwill of NHS practices would sell for around  33 per cent of turnover. Now it is more likely for the same practice to, on sale, to achieve at least 150 per cent and often even more.

In this regard, even if many people have found it difficult, we are presented with a situation in which practices are worth a staggering amount more than they ever would have been before – and this has been good news for many practice owners, if not those seeking to acquire practices.

Of course there are disadvantages as well – particularly if you are not looking to sell – and not just to patients. Indeed, the only real way an NHS practice will consistently be in the black is if it is run very effectively and as a business. Regrettably, this does not come naturally for many dental professionals, who are often under prepared for the operational and administrative  requirements to ensure their practice provides them with the financial rewards which their clinical skills and devotion to their patients merits.

I would submit, only one thing can be assumed with any degree of certainty: if a new contract were to be introduced it would almost certainly be predicated on the current Government’s ‘more for less’ policy. They will want more and they will pay you less for providing it.

Given that it is already very hard for NHS practices to run profitably (indeed, many experts believe that with the burden of regulatory demands, the pressure to meet UDA targets and such, it is nigh on impossible for NHS dentists to be profitable in the long term) a new ‘more for less’ contract could lead to many practices finding themselves in increasing financial, not to mention regulatory, difficulty.  

Fortunately, it is understood that the new Chief Dental Officer is not actually in favour of introducing a new NHS contract and would rather tweak the existing one – and this scenario does seems far more likely. Otherwise, we may simply see a repeat of the past – in which a new contract is proposed, discussed, trialled but then ultimately shelved until the next General Election.

Whatever happens, and whether a practice is NHS, mixed or private, principals would be wise in my view to invest in learning to run dental practices in the most effective and business-like way possible.

For professionals trained in the technical areas of the profession, to learn a whole host of new skills will be daunting, to put it mildly – I have seen what has happened over the past 10 years to the legal profession, which was very much in the same position then, to the position in which the dental profession finds itself now. It would be a huge pity if the same fate awaited practice principals as has affected thousands of law firms over the past decade.

Whatever the case, whether a new contract is on the way or not, or the existing one is set to change, one thing is certain: NHS dentists must get to grips with dentistry as a business if they still want to be in business when and if a new NHS contract ever comes into being. 

 

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