For dentists, the decision about whether or not to go private is a difficult one. The freedom and flexibility that a private practice allows is balanced by a greater financial risk, more responsibility and lack of a ‘safety net’ should things go wrong. However, one aspect of private dentistry has shown it can match the NHS: the profit levels.
For the first time in eight years, private dental practice profit levels are at around the same as average NHS practices. This is based on the latest benchmarking statistics from the National Association of Specialist Dental Accountants and Lawyers (NASDAL), which are gathered from a representative sample of practices across the UK.
In total, the average net profit for the principal of an NHS practice in 2012/13 was £125,958. The same figure for a private practice was £124,086. This is still less than an NHS practice, but the gap is rapidly closing. In fact, private practices have seen their first increase in profits since 2007/08.
Ian Simpson, a member of NASDAL’s main committee, said: “NHS practices have seen a downward trend in terms of profitability while private practices have started to recover. The profit of a typical private practice was almost the same as an NHS practice in 2012/13, whereas back in 2008/09 the profit differential was more than £30,000.”
The reason for this is largely due to the increased flexibility of private practices. They are able to reduce overheads with greater ease, making their business leaner, and have more power to invest in effective dental marketing in order to bring in more patients.
“NHS practices have no control of activity levels or price,” said Nick Ledingham, chairman of NASDAL. Private dental practices, on the other hand, “have flexibility over the work they carry out and the patients they see so they can absorb an increase in costs”.
If this trend continues, private practices could see themselves become more profitable than the NHS, which could end up altering the dental landscape in a big way.