Private dental practices across England could be around £71,000 worse off by late 2021, as loan costs associated with the acquisition of personal protective equipment (PPE) combine with continued lower patient footfall, a report says.
Dentistry is yet to feel the full financial impact of the COVID-19 pandemic, but the researchers behind the report said that situation would change over the coming months.
However, the study by the National Association of Specialist Dental Accountants (NASDL) points out that there is “unlikely” to be a significant number of dental practices facing insolvency over the next 12 to 18 months.
NASDAL spokesman Alan Suggett, who is also Head of the Dental Business at the UNW, said “we are not for one moment suggesting that the UK is now full of poor dentists or that the UK government should support zombie businesses.”
There have been fears that practices that offer treatment to private patients only would have to hike fees in order to cover operating costs. Those with NHS/mised practices have also been concerned that changes to healh service funding calculations could hit them.
But Suggett said it is “clear” that most dental practices are “fundamentally sound businesses”.
However, he added: “To see a good number in potential difficulty purely because of capital loan repayments, is a real concern.”
Suggett said that for this reason, a government guaranteed loan support scheme is “key”, in order to underpin lenders’ confidence.
In order to come up with the projections, NASDAL, whose members act for over 25% of UK dentists – approximately 3,000 dentists in total – developed a financial model, with a number of assumptions.
A mixed practice within the model is one with approximately 50% of their income coming from an NHS arrangement.
With assumptions regarding pre-COVID-19 net profits, fee reductions, lab and material costs, PPE costs and associate and employee cost savings, both private (NHS income <20%) and mixed practices appeared to be in fund deficit following loan repayments.
Based on these assumptions, a typical mixed practice would suffer net losses of £9,246, while a private practice would face losses of £71,269.
The analysis and potential implications – and NASDL’s nine recommendations for Government consideration – are available here.