The financial implications of COVID-19 for dental practices
Dental practices in the UK have been hit hard financially by the COVID-19 pandemic. The initial closure of practices, reduced capacity as services resumed, and costs of new infection control measures caused a substantial loss of profitability for many. With dental practices and their staff struggling to make ends meet, there have been fears that many practices would fold.
In this post we examine the financial impact of COVID-19, strategies that dental practices are using to survive this turbulent time and future prospects for the industry in 2021.
Dental practices faced difficult times due to COVID-19
The General Dental Council (GDC) commissioned a report in 2020 on the impact of COVID-19 on dental professionals. It highlighted the severe financial impact, with 80% of dental business owners reporting a fall in income and 65% expecting income to fall over the following year. Many expected to make workers redundant.
Fears were raised that many private practices could collapse, creating long-lasting issues for patient access to dental treatment.
Falling income, rising costs
Key reasons for the loss of income include initial practice closures and, as services resumed, a considerable fall in patient numbers due to reduced capacity and patient hesitancy.
At the same time, costs rose sharply. Infection control procedures meant practices had to pay for additional personal protective equipment, ventilation equipment, and longer working hours to encompass fallow times and cleaning routines. A key issue has been the need for fit testing of respiratory masks for all clinical staff, due to the considerable expense involved. Initial demand for fit testing also meant long waits for appointments, which delayed reopening of many practices after the first lockdown and contributed to their worsening financial situation.
These problems were compounded by a lack of government support for the dental industry to cover fixed costs like business rates, leaving many private practices in financial difficulty, despite high-profile campaigns by industry leaders such as the British Dental Association (BDA).
Falls in personal income
With low patient numbers, changes to working patterns and contracts, as well as restrictions on dental procedures, dental professionals commonly experienced a significant loss of personal income. The GDC report found that over half expected their personal income to fall by an average of 43% during the next year. Many were considering leaving the profession altogether.
Self-employed dental professionals and associated staff such as dental technicians working with the NHS have felt the impact keenly. One survey revealed that half of dental nurses experienced a negative financial effect, a third had difficulty paying their GDC registration, and two-thirds considered leaving dentistry.
Long-lasting effects will impact dental patients
The financial difficulties experienced by dental practices will have a knock-on effect for patients. The GDC report highlighted that patients now face higher charges as dental practices try to cover costs. It is clear that patients are also more likely to experience difficulties in accessing treatment.
As the industry recovers from the turmoil caused by COVID-19, many dental practices will feel pressure to raise their income by offering more private dental treatments. Patients may find it harder to access NHS dental services. The huge backlog of patients needing dental care will only exacerbate this problem.
Are there solutions?
Financial support is available for some. The BDA provides a wealth of information and advice, including a summary of government business support. The Furlough scheme remains open until September 2021 and other grants and loans may be available.
Many practices have had to raise patient fees or revise staff contracts and profit-sharing arrangements to remain financially viable. Despite the awkward situation, clear communication with all those involved is recommended to foster support and avoid confusion.
For business owners, a flexible approach may help generate new avenues of income. Some practices have taken the opportunity to advance their skills and increase the range of treatments they offer, including private and cosmetic treatments.
Dental practices that provided care solely through the NHS, and private practices with a majority of patients on dental plans, seem to have fared best. For certain private practices, introducing patient finance plans may be a sensible approach.
Hopes of recovery
Despite widespread pessimism in 2020, the situation does appear to be improving as restrictions are eased and the vaccination campaign progresses. By March 2021, there were signs of a ‘strong recovery’, with 35% of practice owners reporting higher revenue now than before COVID-19. About 85% believed that revenue will have fully recovered by the end of quarter two.
Nevertheless, dental practices may struggle to meet pent-up demand, especially while infection control measures and restrictions on patient numbers remain. The offer of a 1% pay rise to NHS staff has also dented morale at a time when NHS dentistry needs to attract and retain skilled workers to address the backlog.
Recovery is in sight but there is no doubt the impact of the pandemic on dental services will be long-lived.
At Dental Defence Society, our expert advisory team provides 24-hour dento-legal advice and support to members. Please contact us for more information about our services.
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