Goodman Grant’s Paul Harris on the sale and purchase of NHS practices: “Sailing the ever-changing tides of NHS dentistry”
Prior to the introduction of the National Health Service (NHS), dental hygiene had been in a parlous state and for many, treatment options were limited. Dentistry itself had been very primitive – before it was established as a recognised profession, dental procedures were carried out by barbers or blacksmiths.
Due to lack of training, sterile environments and equipment, thousands of people died thanks to infections, botched surgery or other complications arising from a trip to ‘the dentist’.
There had been no official control of dentistry until the introduction of the Dental Act in 1921, which made education compulsory for individuals who wanted to practise the profession. Lack of fresh food and an increase in sugar as part of the British diet had led to a serious decline in dental health between the nineteenth and mid-twentieth century. It was not until the NHS was introduced that attitudes towards dental care began to change.
NHS dentistry was founded in 1948 with the establishment of the General Dental Service (GDS), which provided patients with dental care via general dental practitioners (GDPs) who mainly worked as independent contractors from high street and local surgeries. Dentists and orthodontists who chose to work under a contract with the GDS did so as independent practitioners, with the right to choose where they established their practice and which services they provided to patients .
NHS dental charges were implemented in 1951 for adult patients, with exemptions for those in receipt of income support, those who were pregnant, and nursing mothers. Charges were made according to an itemised list of treatments, ranging from simple check-ups to more complex procedures, and these were paid for by the patients on a fee-per-item basis.
There followed radical improvements in the overall state of the nation’s dental health. During the immediate post-war period, large numbers of the adult population were edentate and in 1968, it was estimated that 22% of adults aged between 35 and 44 had no natural teeth – but by 1998, that figure had fallen to 1% .
Besides the advances in dentistry and technology, this was the result of much broader factors, including changes in diet, fluoridation of toothpaste (from 1959) and greater emphasis on the importance of maintaining good oral hygiene – which included attending the dentist.
By 2005, there were more than 400 items on the list of dental treatments that could be charged under the GDS contract, which led to reformation of the payment system in 2006. This simplified the process of charges through a three-tier payment structure which covered treatments ranging from routine examinations and fillings, to more extensive and complex work such as crowns and dentures.
The purpose of the reformed GDS contract was to improve patient experience and enhance clinical quality, NHS commissioning capacity and capability, as well as the general working lives of dentists. While these aims still remain to be wholly fulfilled, the GDS contract has made a significant impact on the dental industry by dictating the way in which NHS practices are run, including how they are bought and sold.
Dental practices with GDS contracts offer stability to practice owners because there is guaranteed income through the patient base, hence the reason goodwill values for NHS practices has always remained strong. Despite this, year on year doubters have been saying that the goodwill bubble will burst, and values start to plummet.
However, results of the most recent Practice Goodwill survey show that the sales market for dental practices remains buoyant, with NHS practices still commanding high values, despite private and mixed practices seeing a small potential fall-back in deals done .
Dentistry, and indeed dental health, has changed substantially over the last century. While the NHS continues to be a topic of debate within the dental community, there can be no denying that quality, affordable and accessible treatment has been fundamental to ensuring that Britons retain healthy smiles for many years to come.
Any prospective buyer looking to purchase a dental practice must identify what NHS contracts are in place and satisfy themselves that turnover is assured for the future. Failing to do so can leave buyers burdened with a practice in which most of its income goes towards servicing loans and reinvestment.
Goodman Grant has specialist dentolegal expertise to help buyers avoid such pitfalls. By carrying out comprehensive due diligence checks and preparing the appropriate paperwork, Goodman Grant helps ensure buyers receive value for money when purchasing an NHS practice.
For more information visit www.goodmangrant.co.uk or contact your nearest office:
London: 0203 114 3133
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Liverpool: 0151 707 0090
1] Parliament. (2008) 2 General Dental Services 1948-2006. Link: https://publications.parliament.uk/pa/cm200708/cmselect/cmhealth/289/28905.htm#note28. [Last accessed: 14.02.18].
2] Treated.com. (Unknown) UK Oral Heath 1968-2016: Are We Getting Better At Caring For Our Teeth? Link: https://www.treated.com/blog/uk-oral-health-1968-2016-are-we-getting-better-at-caring-for-our-teeth. [Last accessed: 14.02.18].
3] NASDAL. (2018) Practice Goodwill Survey – NHS practice values remain high. Link: http://www.nasdal.org.uk/assets/press-releases/Practice%20Goodwill%20Values%20-%20NHS%20practice%20values%20remain%20high%2017-01-18.pdf. [Last accessed: 14.02.18].
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