When the going gets tough, the tough get going...
On the costs side, the NHS Information Centre recently published figures that showed practice expenses increased on average by 7.6% between 2007/08 and 2008/09, whereas the NHS contract value/fee increases were 0.9% in England, Wales and Scotland and 1.44% in Northern Ireland. Consequently, practices throughout Great Britain will have all seen pressure on profitability levels.
This trend towards a rapidly rising cost base looks to continue evidenced on a number of fronts.
First, the Essential Quality Requirement of HTM 01-05 must be implemented by all practices in England by December 2010, although no date has still been set for the higher “best practice” standard. This will lead to a further significant increase in practice costs particularly in the areas of consumables.
Next, again in England, all dental providers will have to register with the Care Quality Commission with effect from 1st April 2011.
As such, not only will practice costs increase due to a new set of regulatory fees, they will also rise as practices will need to spend monies on areas where they are either not or only partially compliant and many may well use external consultants to assist them in this area.
Meanwhile, on the income side, Andrew Lansley, has “stood down” the Doctor’s and Dentist’s Review Body” for the next two years which is the clearest indication yet that there will almost certainly be no increase in NHS dental spending during this period.
Turning to the “Macro” picture, it will be interesting to see what the Autumn Spending Review, on the 20th October 2010, reveals for NHS dental spending and Public Expenditure levels in general for the years 2011/2012 to 2014/2015. After months of background noise, we will finally be able to see the detail and that is where the devil always resides.
With all practices facing increased costs and falling NHS revenue streams in real terms, one way out of this squeeze is to grow the private side of their business.
To do this successfully, practices will need to provide exceptional levels of care and customer service as they compete for consumers often with less disposable income due to pay freezes and higher taxes.
It is important to remember that dentistry is, in the final analysis, a discretionary spend and one that can always be postponed for a while; therefore, the challenge is to convince your patients that their visits to you are simply indispensable.
That is a big ask but not an impossible one. Practices that are imaginative, think differently and stand out from the crowd but above all, put the patient as the central focal point of their operation, will win through.
The saying goes “when the going gets tough, the tough get going” and it’s going to get very tough indeed, so be prepared.
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