Private dental practices see rise in profits
The profits made by private dental practices are almost at the same level on average as that of NHS dental practices for the first time in eight years.
According to Humphrey and Co, a member of the National Association of Specialist Dental Accountants and Lawyers (NASDAL), the average net profit for a private practice during the financial year 2012/2013 was £124,086. Meanwhile, for NHS practices during the same period, this was £125,958.
The figures show that private practices are experiencing their first rise in profits since the year 2007/2008, when the economic crisis first hit. This is in spite of the fact that, overall, there has been little change in the financial performance of the dental care market.
In contrast to the progress of private practices, NHS dental care has been decreasing in profitability. Fees have increased modestly yet so too have overheads, which outweighs the benefits of higher costs to patients.
For private practices, however, there is more leeway over how fees can be adjusted and so managers can adjust activity levels, costs and patient fees accordingly.
Speaking about the progress of private practices despite increasing costs, a member of the NASDAL main committee who is responsible for statistics, Ian Simpson 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 £30K.”
“Although, fee income for a typical private practice has continued to fall, these practices would appear to have become leaner, reduced their costs and increased profit."
Figures for the annual report were gathered by taking a sample of dental practices from a variety of regions across the UK. This is intended to give an average idea of the figures for the nation as a whole. These are calculated using the tax returns submitted most recently, on January 31st 2014.