What has the impact of Covid-19 been on the dental market and how will this affect practices going forward?
Covid-19 has had a huge impact on businesses across the country and dental practices are no exception to this.
The beginning of 2020 saw the closure of practices from 25 March 2020 to 7 June 2020 with only urgent dental care centres permitted to open for a limited range of emergency treatment. Practices have had to completely reimagine their systems and procedures in order to comply with stringent safety requirements to prevent spread of the virus and are able to see far fewer patients due to the time required for decontamination of surgeries between patients.
The landscape of dentistry has changed dramatically as a result and the future remains uncertain.
For NHS practices, NHSE initially committed to paying the annual contract value for practices that continued to engage their staff members and pay them appropriately. There were a number of options given for the 2019/20 year end calculation, enabling practices to, where appropriate, use their March 2019 figures instead of March 2020 for UDA achievement calculations.
There was much speculation throughout the year as to how NHSE was going to deal with the 2020/21 contract year and potential activity related clawback. A number of temporary measures were put in place but supporting guidance was finally issued alongside the letter of preparedness dated 22 December 2020. A summary of the 2020/21 approach as it currently stands is as follows:
- For non-UDC (urgent dental care) practices, an abatement of 16.75% is being applied for the period from 1st April 2020 to 7 June 2020 on the basis that practices were closed and consumables and other variable costs would have been lower during that period.
- Provided staff were paid at previous levels, NHSE committed to making the usual payments under the NHS contracts for this period of closure.
- Face to face appointments were able to be resumed on 8 June 2020 and this was expected to be actioned by practices by 20th June 2020. It was noted at that time that practices might not be able to meet their historic UDAs although NHSE said that a comprehensive service should be offered.
- No abatement was applied for the period 20th June to 31st December 2020, provided the practices were providing the highest possible levels of service – this was said to be at least 20% of usual volumes of patient care activity.
- From 1st January 2021 to 31st March 2021, practices are required to carry out 45% of their contractual monthly activity of UDAs (or 70% of UOAs).
- A further abatement of 16.75% is to be applied for the final quarter of the year on the UDAs deemed performed but not actually carried out.
Although the guidance referred to usual contractual activity requirements being re-instated from 1st April 2021, it is unclear as to whether this will be implemented whilst the pandemic continues.
Mixed and private practices
There has been some support for private practices, although many feel this is inadequate. The government’s Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme, has been extended until the end of September 2021.
Mixed practices can apply for government support schemes (such as the Coronavirus Job Retention Scheme) in relation to the relevant proportion of their business that is private. There will need to be an allocation of staff between the private and NHS side of the business in proportion to NHS/private income e.g. if 70% of the business’s revenue is from the private side of the business, 70% of the staff (in terms of salary) will be allocated to the private side. This side of the business can then claim government assistance e.g. can furlough staff. As above, the practice should continue to receive its annual contract value from NHSE, provided that it complies with the conditions set out above.
Business interruption loans are also accessible to these practices which benefit from the 80% government guarantee. This means that lenders are therefore not permitted to request personal guarantees for loans under £250,000. Where the loan is above £250,000, any personal guarantees should be limited to 20% of the outstanding amount – on the basis that the government is guaranteeing 80%.
Practices with capitation schemes have had some continuity of income from scheme fees.
It is a condition of the maintenance of NHS contract payments that NHS associates continue to be paid at usual levels.
Some associates in mixed and private practices have been eligible for the Self-Employment Income Support Scheme where their income from private work has reduced.
Business rate exemptions have been given for retail businesses, but dental practices were not included in these measures and business rates therefore continue to apply for dental practices. The BDA has made representations to the government in respect of this and it is hoped that the exemptions will be extended so as to include dental practices.
Although there are some uncertainties remaining for the future of dental practices, it is not all doom and gloom. Most practices have reopened and have been extremely busy during the recent months of the pandemic as they try to address the backlog in appointments, although the provision of dentistry is likely to continue to be challenging for a long time to come. Further support has been requested from the government by the BDA and other key dental bodies to help practices to continue to see the pandemic through.
This article was correct at 19 March 2021. Due to the nature of the topics covered subsequent changes may have come into effect after publiccation.