Coach Barrow

I have long been an admirer and follower of the work done by Dan Sullivan at The Strategic Coach® Company in Toronto and Chicago.
Dan works with highly successful entrepreneurs globally, offering a coaching programme that focuses them on what to do best and what to do next.
I have referenced his work in my coaching programmes, bought his products on-line and recommended clients to his services.
One of his publications is a quarterly newsletter for financial advisors, Creative Destruction, in which he predicts future trends. Reading an extract from an article entitled “The Twelve Predictions” I gave pause to reflect on the following statement:

“I believe that if an author chooses to judge and criticise a troubled situation, intellectual honesty requires that he or she do three additional things:
1. Make clear cut and measurable predictions about how the overall situation will evolve both in the short term and the long term – and be willing, over time, to be held accountable for those predictions;
2. Identify and highlight role models, that is, those individuals who are creating new solutions in response to the present problems and crises;
3. Provide direction, tools and resources for others who want to achieve growth and success as the situation evolves.
Only when these three additional factors are present should the author’s criticisms and observations be taken seriously.”

Rarely have I been influenced in my own thinking so profoundly by the impact of this statement on my activities as a writer and commentator on the business of dentistry.

My travels through the dental press of late, as a reader, have been overwhelmed by negative articles about the “new contract” and the effect it will have on the well-being of dentists, team and patients but the quotation above had me thinking whether I, or any other writers, had fulfilled the standards of “intellectual honesty” referred to?

I don’t really think that “whinge, moan, we are all going to die, it’s an outrage!” is cutting the mustard as far as Sullivan’s philosophy is concerned and, so, I’ve come to the conclusion that I, for one, need to change my approach.

The “Dear Coach” column in this newspaper was a joy to prepare and deliver, because it highlighted (and was based on) real issues and questions raised within my own dental client base. The names were changed to protect the guilty (!) but the situations resonated with many readers, because you were facing them day in, day out.

Since the beginning of this year, I have been writing about the macro-position in UK dentistry (new contract renting of garments, customer service in private dentistry) and I’m feeling as if I have said all I want to say at the moment.

Now that April Fool’s Day has come and gone, I feel its time to look forward and ask “what next?”

So, over the issues ahead, I’m interested in following Sullivan’s guidelines and so I want to:

1. make accountable predictions for the future of the profession;
2. introduce profiles of those who are not just surviving but prospering in this new world and
3. provide a series of strategies and tactics that each reader can implement to evolve successfully.

How does that sound?

With that in mind, in the rest of this article, I set out my core predictions, with a brief summary of each – and, in future issues discuss actual members of the profession who are adapting to prosper and share the strategies and tactics they are using.

Ready?

1. The Death of the 50% Associate

As the impact of nGDS becomes embedded, NHS principals will be pressured by PCT’s into paying less for associates. The continuing arrival of cheaper labour from overseas will fuel this trend and associate remuneration will fall to 35% and the self-employed associate will be rendered extinct by a combination of Inland Revenue pressure and market forces, to be replaced by a salaried associate on a package worth less than 35%.

2. The Death of the Hygienist

The continuing pressure from the Inland Revenue will force more hygienists into salaried contracts. At the same time, dental principals will discover that a more profitable partnership can be forged, either by asking lower-paid associates to include the S&P in their (salaried) work, or (in the private sector) to work alongside a therapist who carries out as much work as possible, leaving the dentist to focus on higher profit activities. There will be fewer hygienists working in the NHS and the survivors in the private sector will be therapists.

3. The Dominance of Corporate NHS Practices

As PCT’s pressurise principals for “More UDA’s in Less Time”, they will offer reviewable tender contracts for the cheapest provision of services. The survivors will be the very largest “corporate” NHS groupings, who can achieve economies of scale in purchase and delivery of products and services. Technical labour will be sourced off-shore (overseas dental laboratories and suppliers) and administration will be centralised. Customer service will disappear.

4. The Death of the Small NHS Practice

The combination of pricing/target pressure from PCT’s and competition from corporates will force the owners of smaller NHS practices to leave the profession, join a corporate grouping or convert to private practice.

5. The Death of Goodwill

As the viability of NHS practices becomes increasingly dependent on their ability to renegotiate their PCT contract, the goodwill value will evaporate. Dentists who own NHS practices and want to sell or retire will be unable to achieve any realistic capital value – the corporates will make a killing on acquisition.

6. The Implications of Incorporation and the Rise of the LLP

To facilitate the creation of NHS corporates more quickly, incorporation legislation will finally make it on to the statute book. This will allow venture capitalists and retailers to re-investigate a market they fled from in the ashes of Boots Dentalcare. Those retailers who can successfully operate models that “pile it high and sell it cheap” will look to acquire or create further corporates to compete on tender from PCT’s. Their primary objective will be the acquisition of patient databases to which they can cross-sell their other products and services. Because profitable dentistry will not be an objective, they will compete for PCT tenders at even lower profit margins, thus accelerating the decline of the smaller practitioner.
The private practitioner will be advised by his/her accountant to consider the tax and management benefits of Limited Liability Partnerships as opposed to true partnership or incorporation.

7. The Rise of Dental Litigation

Soon enough, the patients will become irritated at the lack of availability of dentistry, the poor customer service they receive and the Government-sponsored supervised neglect that will become endemic in the NHS system. Treatment will be delayed or avoided by struggling dentists. Patients will suffer – and they will go their lawyers. Litigation against dental practice owners will become a popular branch of the “no win, no fee” brigade. Lawyers will see the market opportunity. Corporates will pay to protect their brand. There will be easy pickings.

8. The Death of the UDA

The system will begin to collapse under the weight of low/no profit businesses supported by City or private capital funding. The PCT’s will begin to collapse due to lack of funding and resources in the NHS generally. Practices will collapse under volumes of clinical work and paperwork. The UDA will have to go – and be replaced by a new system of patient-centred care – a Government-sponsored membership scheme that will be part-funded by the patient themselves, depending on the level of care they require. Bronze – emergency-only, silver – basic maintenance, gold – advanced maintenance. This will be a hybrid system of part NHS, part private.

9. The Death of the New Contract

The Government will announce a complete scrapping and revision of the “2006 contract” to be replaced with the hybrid system mentioned above. They will also re-centralise the administration of the system into an nDPB – an NGO (non-governmental organisation) that will be made up of clinicians, managers and patients, to supervise national standards of products/service delivery and payments for work.

10. The Rise of Licensing and Regulation in both NHS and Private Dentistry

As a result of adverse media coverage of supervised neglect, the Government will form another NGO to police clinical standards on a per-patient basis. The Dental Regulatory Authority (DRA) will recruit former practicing dentists as regional inspectors, whose responsibility it will be to enforce the adaptation of nationally agreed standards and systems. The NHS sector will be first target – with the largest corporates coming under initial scrutiny. After research reveals large-scale “corner cutting” on quality, show trials of corporates will take place to restore public confidence. The DRA will be self-financed by compulsory registration fees and the fines imposed on non-performing members.

11. The Arrival of Profit Disclosure to Patients

Once NHS dentistry has been regulated, the focus will shift to private practitioners who, over a short period, will be forced to comply with similar standards of business licensing and regulation. As part of this process, profit-disclosure will be introduced, requiring all treatment plans to carry a full explanation of how charges have been calculated, including disclosure of the profit margin calculated.

12. The Formation of Dental Producer Groups

A new organisation will evolve within the private sector of the profession – The Dental Producer Group. This will provide large numbers of independent practitioners with increased power to compete in the marketplace. The most successful of these groups will prosper because:

a. they protect and enhance the financial independence of their members;
b. they use the latest thinking in marketing to ensure a “brand visibility” for members of their group;
c. they are able to afford the latest and most innovative materials, methods, products and services, giving them a competitive edge in the private marketplace.

The most successful of these groups will allow their members to achieve a balance between individualism and a national brand for innovation, quality and customer service.

They will allow members to benefit from:

d. Sharing costs;
e. Increasing knowledge and skill;
f. The simplification and streamlining of operational systems, using the advantages of a franchising prototype for each member.
g. Developing individual “boutique” practices under a national branding umbrella;
h. Increasing the productivity of individual clinicians and team members through in-group training, consultancy and coaching;
i. Focused marketing for new patients through group funding of national campaigns;
j. Centralised bargaining and purchase of supplies and services;
k. Representation for members in compliance and due diligence with the DRA and other regulatory authorities;
l. A senior management team made up of top leaders from within the business world as well as the dental community, ensuring member representation in key influencing organisations.

In summary, members firms will no longer have to “re-invent wheels” – and this will give the younger dental entrepreneur a clear entry strategy into the business of dentistry – and the older practitioner a ready-made marketplace for practice sale.

To refer back to Sullivan’s “intellectual honesty”, I have attempted here to offer my predictions and now I want to suggest solutions. If I may paraphrase Sullivan,

“Everything in the producer group organisation is geared to protecting and enhancing the productive time, abilities, energies, opportunities and achievements of the member dental practices.”

So – as promised – in future articles I don’t want to dwell on the distress of operating nGDS or the doom and gloom in the marketplace. What I do want to do is focus on key (but largely unknown) role models within the profession who are seeing things the way I do – and creating secure and attractive futures for themselves, their team members and their patients. I also want to highlight the best ideas I am seeing out there in the marketplace – what’s working best and why.