Imagine going into your local library. I know, this does take considerable imagination given all the library closures even before Covid, but stick with me. You go in and find two books to borrow. You take them to the counter and the assistant says, “Oh, I’m sorry, you must have strayed into the other area. One of those books isn’t free to borrow.” You ask, “What’s different about it?” The assistant can’t really explain. It’s just how it is. She gives you the price in case you want to pay to borrow the book. How would you feel?
I worry that mixed practices put their patients in a similar position. We have no axe to grind against the NHS, but the end user’s experience of the UDA system must be baffling. What are patients supposed to make of it when they see the same dentists and use the same facilities for NHS and private treatments?
NHS and mixed practices are still perceived as the ultimate solid investment and lure many first time buyers in. Let’s take a look at the implications if that’s you. Firstly, because of the high esteem they’re held in as reliable revenue generators, prices for NHS and mixed practices are high. Yet profitability isn’t always there to support these inflated prices. The upshot is that you may end up buying a job for life.
If you want to earn a yield on your investment at a fair margin of profitability then you will have to enhance the business. NHS and mixed practices are unquestionably more difficult to enhance. They don’t have the market position to move much in terms of perceived value. Imagine your local Burger King trying to sell you a £15 bottle of Chardonnay to go with your meal. Would you buy one? No, you’d be confused. That doesn’t mean you wouldn’t buy the bottle in a different context. Here, though, it’s what’s known in anthropology as matter out of place. It’s violating ancient intuitions about purity and order that you’re barely conscious of. All you know is it doesn’t feel right.
The expectation among most patients is that NHS dentistry is free (or at least at nominal cost). When you combine that with the high price thresholds to buy NHS practices, you get a double bind. You’ll be on the back foot financially and need to enhance the business quickly. Perhaps you will respond by trying to upsell some private work. Realistically though, how easy is it to sell something to someone who wasn’t expecting to buy anything? And the lower average net worth of clients who use NHS dentists means that even if you do persuade them of the necessity of a treatment plan, maybe they can’t afford it.
At the very least you’ll have to be careful with the type of work you’re upselling and how you justify the cost. It’s feeling like your hands are tied before you’ve started. This is a common predicament for first time buyers to find themselves in. It’s almost as if, after buying themselves a job, they realise they have to get out of that job as fast as possible by learning about the things they should have learnt in the first place: customer demographics, sales techniques, the customer journey.
This is not to say there are no solutions. Perhaps you could tender and win another £50k contract. If you could create a production system that enables you to service patients 20% quicker, that would be great for your bottom line (although you should see what’s possible in the private sector — post-Covid, one of our clients hit 130% of pre-existing revenue levels with 60% of operational capacity.) If you’re a bit of an entrepreneur and you’ve identified a segment of patients who want a certain treatment and you’re able to explain why it’s not free, that’s fantastic.
It’s not impossible to enhance an NHS or mixed practice, but it is just more difficult. I think deep down most owners know this. They know they’re trapped, and this can be difficult to hear. But what can be done about it? If you’re concerned about the future of your NHS contract, this is where it gets exciting. We have empirical evidence that there is a lot of consumer demand out there for private dentistry. When lifelong NHS patients can’t access NHS services, the evidence shows that they do convert to private. Our clients in private practice are telling us this.
Paradoxically it’s probably the very availability of NHS dentistry that is holding NHS practices back. Our clients have former NHS patients joining them because they value dentistry, but they weren’t prepared to pay before because they could get it for free. Now they will pay to avoid waiting for months to be seen. And once they move through this threshold something interesting happens; they engage. People are more interested in things they’ve made a sacrifice for. (I’ll explore this idea further in a separate blog.)
Principals of NHS and mixed practices can be out of the loop on this. They might be scared and uncomfortable about dealing with things beyond single-tooth dentistry. They might routinely miss opportunities to discuss the need for orthodontics and full mouth rehabilitations with their patients. They might simply watch the onset of pathologies and only respond if it gets bad enough.
How do you move out of this fear-based position into a more engaged, consumer-centric position? Maybe you have to leave the comfort blanket of your NHS income behind and risk going it alone. That’s scary. Where do you start? And how do you convert a FMCG like Burger King to a dine-in restaurant? You’ll need a new skill set. But you don’t need to do it alone. We’ve done it many times before. We know how to reposition you in the market. We know how to mentor your team. If you want to substantially enhance your private offering, or totally shift to private (like Runeel), we can support you.