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He (Mac) has helped me as my practice has expanded from single-handed to a six surgery/8 dentist practice.

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Private Practice – to be or not to be? That is the question. But what is the answer?

Not as clear-cut as one might hope, but here is a quick guide to get you started.

There are many factors to consider here. This list is by no means exhaustive.

1. Are your existing NHS patients mainly fee paying or on income support?

   If most of your NHS patients are fee paying as opposed to on income support, it is more likely that you may be able to convert these to private patients without too much of a problem (hopefully!).

   If, on the other hand, most of your patients are on income support, you may find it difficult to convert your practice, as you will have to attract new fee paying patients.

2. Location, location, location

   This factor ties in closely with the previous one. Being situated in a reasonably affluent area will probably mean the conversion to private is smoother. Being situated in a slightly disadvantaged area, where many of the locals are on income support, is likely to make conversion harder, if not near impossible. That however, depends on the exact location. You could be situated in a busy shopping Centre, where many affluent shoppers "flock to shop". Therefore, though most of the locals may not be fee paying, it’s likely that your patients are not locals.

3. Personality of dentist(s) concerned.

   Dentists involved in private practice need to excel in communication. Not only will they need to explain treatments to patients; they will also need to "sell" them. It will be necessary for patients to be able to differentiate between the treatments received under the NHS and those received under private. The dentist will need to highlight the merits of different treatments. Use of technology such as inter oral cameras to help with communication may earn you some extra brownie points!

4. Gaining the confidence of patients

   This point ties in with the previous one as it has a lot to do with communication skills. Patients should be able to trust you and not feel like they are paying for treatments which they feel they didn’t really need, or that they are paying more for a treatment than they did under the NHS and actually getting less for their money.

5. Patient Perception

Many people are likely to view a private practice as being expensive and may feel that it will be full of dentists waiting to rip them off. It is up to the dentists concerned to prove them wrong. There has been a lot in the press lately about the prices private practices charge, and consumer organizations are continuously urging patients to check the prices that private practices charge.

The whole private "experience" must be at a significantly higher level than that under NHS treatment, to be able to attract quality patients/referrals.

With a private practice, the décor of the reception area and way patients are greeted by staff may be just as important as the quality of equipment.

This is certainly very relevant. Nowadays, NHS practices seem to sell for a lot more than they did before the new contract. This is largely due to the relatively secure sustainable cash flow.

In addition, there are substantial grants available to create extra NHS capacity. For example, if it is felt that there is not enough NHS capacity in certain areas, the relevant authorities may provide huge funding to encourage dentists to set up new NHS patient capacity. The effect this will have is that a percentage of the patients that the private practices in the area were serving may choose to go to the NHS practice. The existing private practices will be forced into competition as the private patients base would have reduced. This also puts the private practices at what they would feel is an "unfair" disadvantage as they have not received funding but the NHS practices have.

Increased bureaucracy and regulation also mean that it is harder for a dentist to start a new NHS practice, then a new private one. Therefore, it is likely that new practices starting up are more likely to be private than NHS. This again will increase competition in the private sector.

More and more NHS dentists seem to be going private at the moment due to feeling fed up of the additional bureaucracy. This, surprise surprise, further increases competition in the private sector.

If you have a specialization, (e.g. cosmetic dentistry or implants) going completely private may be beneficial so long as you can establish yourself in the private practice area.

If you do not have a specialization, then location, personality of dentists concerned and high quality treatment play a very important role.

With increasing compliance requirements (e.g wheelchair ramps, fire regulation etc.), pressure on prices charged for treatments, and the need for better décor, private practices may find their margins being squeezed.

In order to make the right choice it is necessary for you to do some market research and also speak to your advisor. If you currently have an NHS practice, it may well be worth continuing the NHS side and introducing a private side to run alongside. The wrong decision will, at best, burn a huge hole in your pocket!

A well established 3 man practice in a flourishing part of London, which was already 40% private, made the move to a 100% private practice last year.

Of the 60% NHS element, 10% consisted of income support patients.

The most obvious and immediate financial effect was the loss of fees of the 10% income support patients.

Mr. X (the principal) considered 3 main options for his private patients:

1. Denplan
2. Own private scheme
3. Items of Service only

He liked the idea of having some sort of monthly payment scheme as it encourages commitment to the practice.

He decided to opt for his own private scheme, underwritten by himself, as he did not feel that the extra cost of Denplan was appropriate for him.

Whilst he would have preferred all patients to sign up for the scheme, naturally this is not possible, so the remainder would have to pay for items of service.

He decided that the décor of the practice would need to be tastefully redone to appeal to private patients (£23,000). He also incurred other expenditure relating to modifying the layout of the practice – particularly the reception area (£15,000). He was able to fund this £38,000 from existing funds available and his overdraft facility on his business account.

He also needed to upgrade existing old equipment (£120,000). He funded that through a 10-year loan.

Not all his staff were suitable to work within the new set up and also had to undergo training. Mr. X had already made some staffing changes in anticipation of conversion. The staff underwent two days of training at the practice, and this was funded from his own funds. In the process, he lost 2 of his 6 staff.

Mr. X had to recruit a new associate to replace one of the two working at the practice, as she was not happy with the changes.

After the move to private, there was initially a drop in income and gaps in appointments due mainly to the perception of private = very expensive. This was expected, however, and leaflets were produced and circulated to explain the changes in the practice and how they would affect patients. They also advised patients of new treatments available.

Mr. X decided to "branch out" into some aspects of cosmetic dentistry and Botox with referrals from local beauticians (as part of a mutually beneficial agreement).

He gave staff free makeovers, and used them as "walking adverts". He also produced photo albums with before and after shots, and invited staff into treatment rooms to discuss their experiences of the treatment with patients considering action.

Six months later, the practice income is up by approximately 8%. It is expected that overall income in year 1 will reflect an increase of approximately 10%.

Mr. X and the other dentists enjoy greater job satisfaction, though they do admit the changes were very stressful initially. It also requires them to operate with a different mindset. For Mr. X, the project has increased his outgoings due to considerable expenditure.

Hopefully, he should see positive returns in future!

We take great pride in our service, and would be delighted to invite you for a free 1 hour, no obligation meeting at our comfortable offices. Simply call us  on 020 8346 0391 to arrange a mutually convenient time.

This web-site was last updated on 01/04/2008

Specialist Dental Accountants for over 27 years.

Copyright © 2003-2008 Mac Kotecha & Company. All rights Reserved. The information on this site is for general guidance only. It is essential to take professional advice on specific issues about their impact on any individual or entity. No liability can be accepted for any errors or omission or for any person acting or refraining from acting on the information provided on this site.

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