Spending on dentistry 13% lower than 5 years ago
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- Published: Monday, 21 April 2014 09:50
- Written by News Editor
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Latest estimates published by healthcare experts LaingBuisson in the fourth edition of Dentistry UK Market Report, value UK primary care dentistry at £5.8bn in 2013/2014, with £3.62bn (63%) of this spent by government and patients on NHS dentistry, and £2.2bn generated from private dentistry (37%). In real terms dentistry spend is now 13% lower than its peak in 2009/2010.
According to the report dentists struggled to maintain private revenues during the recent economic downturn, as many people attended less frequently, or looked to access subsidised NHS care, leading to a private dentistry contraction of more than a fifth (22%) in real terms since 2009/2010.
At the same time an austere fiscal stance by the Coalition government has seen spending on NHS primary care dentistry fall behind RPI inflation, contracting by 7% in real terms overall in the last four years (2010/2011 to 2013/2014 inclusive).
Corporates
Strong expansion by incumbent corporate dentistry groups, and a spate of new corporate entrants, has accelerated consolidation of primary care dentistry in recent years. Corporate dentistry (groups of three or more practices), now represent 6,950 dentists in the UK and is valued at £1.3bn for 2013/2014. The report says: “Driven by the lure of scale economies and economies of scope, and energised by local NHS contracts to improve access, most incumbent dentistry groups have displayed good growth despite market contraction, and many more new groups have emerged in a new corporate landscape with different target markets, though most are small and in early stages of development”. Since 2010 when LaingBuisson last measured the corporate dentistry market, its size (in terms of dentist penetration) has moved up from just over 12% to the present 22%.
An austere NHS future, but private smiles for consumers
LaingBuisson’s Dentistry UK Market Report outlines that major forthcoming commissioning and contract changes have the potential to shift the delivery of NHS dentistry from its current position, and anticipates furtive policy development at NHS England in the next 12 months as the government strategies to deliver its lofty aims for wider NHS access and better oral health without any increases in real spending for some time to come.
Meanwhile LaingBuisson expects private dentistry to get a lift from positive stable economy growth over the next four or five years, but believes changing consumer dynamics could transform private dentistry in the long term, as market power inevitably moves further towards consumers (patients), as dentistry providers compete more actively to attract private customers on price, convenience, and loyalty.
Dental plans show strength
Dentistry UK Market Report reports that the funding of private dentistry by dental plans was less affected by the economic downturn than private self-pay, as real spending on plans edged down by only 2% in real terms between 2008 and 2012.
According to LaingBuisson, the total dental plan market in the UK – covering capitation, dental insurance, and dental cover from cash plans – was estimated to be worth £719m in 2012, with the bulk of this representing capitation (£503m), some £95m spent on dental insurance by individuals and employers, and the remainder (£121m) representing derived cash plan contributions.
Spending levels were propped up by strong growth in the demand for dental insurance, most notably by employers, which pays out on both private and NHS dentistry usage. Over the period its share of total dental plan spending moved up from 9% in 2007 to be 13% in 2012, and further similar growth is projected for the medium term.
Comment
Report author, economist Philip Blackburn commented: ‘There are a number of interesting dynamics going forward to shape primary care dentistry in the UK. The biggest game changer is the drive towards consumerism as dentists and dentistry groups compete to attract private customers as the private dentistry pie is smaller than it was, and dentist supply is greater than it’s ever been. Changes are already happening, as a number of dentistry groups provide services from retail outlets with ambitious expansion planned around customer convenience, and there is a stronger industry focus on customer benefits including keener pricing, value for money, loyalty rewards, and the highest quality experience. In turn, movement towards consumerism and a retail environment for dentistry providers is expected to energise growth.’
On NHS dentistry Mr Blackburn added: ‘The government has its work cut out to deliver wider NHS access and clear improvements in oral health without any significant real spending increases going forward. As a central purchaser NHS England is looking to generate commissioning efficiencies, and the new dentistry contract (which could be rolled out in 2016 or 2017), focused on a prevention care pathway, is being introduced to deliver net pay-offs in the long term. While these may be achievable on paper, there remains an underlying scepticism that any model based on more patient time with a dentist also means more money must be spent. And at the moment the NHS’s primary care dentistry budget doesn’t support this.’
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