THINKING BUSINESS
a blog by Chris Barrow

The Lament of the Orthodontic Principal

To mark National Orthodontic Week, I thought I’d kick this week’s blogging off with a post on the subject, which is reproduced with the permission of David Horobin. Times, they are a changin’ It’s a tough time in Orthodontic Practice – the keyword is ‘uncertainty’. The high water mark of British (or should I say ‘English’) Orthodontics was two years ago. At that stage, the old securities were still in place and the going was good. We had warm memories of the start of the new NHS contract and the paying off of the old one – that was nice. Wise practice owners sold out to corporates two years ago and typically received up to 130% of turnover for their goodwill. Since then, a new reality has begun to dawn. The old securities of the NHS have faded – the idea that the work would always be there and that you’d get a rise each year. For some reason, Orthodontic practice has been singled out by the government as the only bit of Dentistry that can be put out to tender in its entirety – GDP’s GDS contracts roll on endlessly – only our PDS ones are time limited and therefore subject to periodic reassessment. The government’s push for ‘increased value’ i.e. lower UOA rates, seems firm. Let’s be clear about this – what they’re actually saying is ‘we are going to cut your income ‘cos you’re earning too much’. And this is at a time when it’s OK for the chairman of HBOS to receive a £2.4 million bonus. And it’s working – a combination of the recession, a fall in private work, static NHS income and rising costs have cut profit in recent years. A young oik admired my car the other day – ‘nice one guvnor’ – and I felt a touch of guilt. But hang on. I’m middle aged and have worked myself into the ground all my life. I have two degrees, I founded a practice from nothing which employs about 12 people and we provide a superb quality of treatment to hundreds of people a year very efficiently and at relatively low cost compared to the rest of the world. It’s OK – I deserve my motor. But the government doesn’t want to pay for it. It wants me to have a Ford Focus. So where’s it going from here?

  1. A long term decline in NHS profitability as costs rise and income remains steady (at best)

  2. Increased use of therapists and a reduction in reliance on expensive associates in an effort to survive

  3. An increase in foreign professional staff; Eastern Europe will lose most of their Orthodontists

  4. A consolidation of the market will lead to the closure of some practices which lose their contracts – unthinkable just a year ago

  5. Increase stress related illness amongst practice owners and an urge to ‘get out’

  6. Colleagues locally will be set at each other’s throats as they battle to outbid each other at ever decreasing UOA levels

  7. Corporates will hoover up the majority of practices over a 5 year period – and they’ll get them at bargain rates

  8. Chronic uncertainty will lead to a halt in investment

  9. Most (corporate) practices will look OK on the surface (and will tick all the CQC boxes) but will be depressing and heartless places in which to work and be treated

  10. Treatment will be stuck in a 1980’s rut – straight wire for ever – modern stuff will be PP only. It will become necessary to explain to patients that they can’t have ‘the best’ on the NHS – this may cause conflict with regulators for whom ‘the best’ must be provided for everyone, irrespective of financial reality

  11. Private practice will continue to expand as the NHS criteria fail to meet the public’s aspirations

  12. Private treatment, having fallen back a bit in the last two years, will pick up

  13. If the recession ever does end, private practice might boom

  14. Adult treatment will boom (it is starting to do this already)

  15. It will become accepted in society that if your child is concerned about a mild problem, you’ll have to pay – again, this is already happening

  16. Discerning parents will opt for PP in order to receive the latest and best and avoid waiting lists

  17. Training in ethical sales techniques will become essential for all clinicians

So the NHS future is very gloomy – I see NHS Orthodontics essentially becoming a loss leader that we do reluctantly in order to get the private work that flows from it. The successful, independent Orthodontic practice of the future will look very different from the traditional model – a principal, an associate or two (British associates – this is a ‘successful’ practice) and several therapists. The therapists will cope with the majority of the NHS work, leaving the Orthodontists to do assessments and private work. Change is always stressful but I guess this might work and perhaps work well (provided it wasn’t your practice that lost its contract). My own view is that the future will be bright for those independent practices that are well set up, offer good service and have an eye fixed firmly on private practice. Corporates, with their European staff, will offer scant competition. The discerning will always gravitate to a better practice and if you get the customer service right, the private aspect will become bigger than the NHS side. Best of luck everyone! David

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