Have NHS practices reached peak value?
Have NHS practices reached peak value?
NHS dentistry is in crisis, but this could be a rare opportunity for its practices.

Times are undoubtedly tough for NHS dentistry. While the narrative around this service has centred on its challenges for some years, the Covid-19 pandemic has thrown up greater difficulties and obstacles than ever before.

One of the problems in NHS dentistry is that it’s a system that can encourage the wrong things. Increasing throughput is a priority, meaning that seeking out and rectifying dental issues challenges the economic incentive to monitor only. With capacity cut to 20% at one time during the pandemic, rising now to 65%, NHS dentistry has been described as facing its ‘worst crisis in its history’, with three-year waits for check-ups in parts of England. Serious issues are being missed, patients are suffering, and staff are struggling with high demand.

While the NHS itself has a strong brand and good public support (particularly since Covid-19), with additional funding from the autumn budget, NHS dentistry is a very different thing. On top of this, there’s the ‘great resignation’, in which millions of workers (reportedly almost one in four, in the UK) are planning a job change due to a pandemic-induced priority rethink, burnout, and increased job openings. This, paired with fewer nursing students training in the first place, is leaving a resourcing black hole. Nursing wages seem to have recalibrated at £14 per hour for good candidates.

It’s a similar story in Scotland, where attempts to resume ‘business as usual’ in NHS dentistry is leading to an exodus of staff. Over a third (38%) of dental professionals are reportedly considering a career change or early retirement, as a result of emergency support being imminently removed.

Historically, NHS practices have been more valuable because of their perceived stability with “guaranteed” income. Work was hard but steady, with the prospect of a good pension and final pay-out on exit, but with just one customer, basic economic laws such as Porter’s Five Forces tells us the status quo can be easily disrupted by such a powerful arbiter. With so many different challenging factors now at play, however, the environment has drastically changed. De-skilled, demoralised, trapped on a conveyor belt of churning units, and with no ability to reinvest, NHS dentists have been left feeling let down.

This all paints a gloomy picture, but there is also a positive view to be taken.

As a practice owner, you have one major move to make in your life and career. Typically, the decision to sell is made either to dovetail with your life, or for strategic reasons. The ‘crisis’ of NHS dentistry hasn’t yet manifested itself in the market (we’re still seeing more buyers than sellers). For now, buyers are still happy to invest in NHS practices, but with industry and macroeconomic clues available and the early warning signs plain to see, this could be the ideal time to make an exit.

Private practice is currently stronger than ever. Partly due to the NHS backlog, it’s a buoyant industry with soaring demand. If you’ve always wanted to privatise, and see this as a chance to shake things up, we can help you to make that change. Alternatively, you might also see this as the top of the market and take this opportunity to sell.

The important point to remember is that as an NHS dentist, you do have options, and you do have a window of time to take control of this situation. Selling a practice can take up to nine months, however, so if you’re keen to do so, don’t hesitate.

Get in touch to speak to a member of our team.

The information contained in this article is based on the opinion of Hive Business and does not constitute formal tax advice. Any tax outcomes will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future. You should seek specific advice before embarking on any course of action. Hive Business does not provide regulated Financial Advice, including advice on investment, insurance or lending products or their suitability for you. This article is provided for information only and does not constitute, and should not be interpreted as, investment advice or a recommendation to buy, sell or otherwise transact, or not transact, in any investment including Bitcoin and other crypto. Any use you wish to make of any information contained within this article is, therefore, entirely at your own risk.

By Ross Martin Management Consultant
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