Small profit reduction for NHS practices
 

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Small profit reduction for NHS practices

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Small profit reduction for NHS practices

 

Small profit reduction for NHS practices

The  changing nature of dental practice in England and Wales is reflected for the first time in the annual benchmarking exercise carried out by the National Association of Specialist Dental Accountants (NASDA). 

The figures, collected by NASDA accountants from annual  tax returns relating to 2007/08 – which had to be submitted by 31 January 2009, indicate that the practice is getting bigger and either employing more staff or generating more income through increased surgery time. 

The 2007/08 benchmarking statistics represent the end of the second year of the NHS dental contract.

Last year's figures included information relating to the pre-­contract era, making the latest figures the first which are fully representative of the 2006 contract.

They show a small fall in profit for NHS practices, from £149k to £148k but an increase in annual profits in the private sector, from  £131k to  £137k. 

Costs have gone up, however, and, on average, a private practice is now spending £250,000 on materials, laboratory bills, wages, direct costs, and overheads while NHS practices spend around £220,000, equivalent to 59% and 65% of practice fee income, respectively. 

Once again, the NASDA statistics show a considerable variation in the rate of Unit of Dental  Activity (UDA) with £24.38 being the average for practices and £16.20 the lowest.

The average UDA rate for associates is £21.58. 

NASDA is a grouping of 36 accountants who between them represent  one fifth of dentists working in practice. Every year they produce a set of statistics based on a representative sample of 1,000 of  their clients as well as detailed bench­-marking information.

Annual practice incomes are calculated by NASDA members who also compare the  earnings  of  NHS and private dentists. Since the typical dentist still works in both systems, the dentist must  have a bias of more than 80% to fall into either the NHS or private category. 

Ian Simpson, a partner in NASDA member Humphrey and Co, and responsible for the  compilation of this year's figures, commented:  ‘From what we are seeing, despite this small drop in profit, NHS practices are generally more profitable because they engage more associates.

‘What we are also seeing are practices which  are  consolidating  and  operating 
more  surgeries  over  longer hours or growing in size. This  would  appear  to  be the 
way that dentistry is going.'

 Posted on : Fri 20th - Mar - 2009

 

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