House of Commons - Public Accounts

Select Committee on Public Accounts Thirtieth Report

²Risks associated with the proposed new contracting arrangements

16. Historically high street dentists who provide NHS treatments under the General Dental Service contract receive two main forms of payment: payment for each item of treatment they carry out on a piecework basis and, since 1990, a fee for each registered NHS patient. The piecework element of the funding comprises three quarters of General Dental Service funding.[25] Many reports have argued for change, including reports from a previous Committee of Public Accounts (1984),[26] the Health Select Committee (2001)[27] and the Audit Commission (2002).[28] Likewise, the Department and the profession were in agreement that the General Dental Service contract was outdated because it was entirely focused on treating patients, and placed dentists on a "treadmill" which encouraged them to carry out potentially unnecessary treatment to earn their fees. As the oral health of England's population had improved, it had become necessary to move to a contract which gave a greater priority to the prevention of dental decay and gum disease.[29]

New ways of working and paying dentists

17. In 1998, fifteen Personal Dental Service pilots were established based on locally negotiated contracts between the then local health authority and one or more providers of dental services. Personal Dental Services are staffed by dentists who are paid salaries or funded through capitation arrangements rather than the piecework payment system. All of the pilots shared an objective to improve access to NHS dental and oral health services. The pilots showed that by paying dentists in different ways it was possible to maintain and increase their NHS commitment.[30]

18. In 2002, the Department published its Options for Change report which proposed a radical reform of NHS dental services in England, building on the Personal Dental Services pilots. Part of the motivation for introducing Options for Change was to explore different methods of remunerating dentists, although the original intention was that there was to be no sudden change in method. Models for remunerating dentists were to be made available in demonstration sites and, if successful, rolled out across the country. There was unlikely to be one method to fit all circumstances.[31]

19. However, with the publication of the Health and Social Care (Community Health and Standards) Act 2003 the Department moved to rolling out a single method for paying dentists which was to be introduced in April 2005. In July 2004 the Department stated that the new working arrangements would be deferred until October 2005 and in a written Ministerial Statement issued on the 10 January 2005 it was announced that the introduction would be further delayed until April 2006. Under the new approach all dentists working on a General Dental Service contract are now to move to a new base contract from April 2006. Dentists operating under the Personal Dental Service contracts will be able to continue to operate under these contracts for a three year period subject to any amendments needed to reflect expected changes in patient charges and monitoring arrangements. The Department has guaranteed that any practice that wishes to will be supported to move to a Personal Dental Service contract in advance of the introduction of the new April 2006 date.[32]

20. Since April 2004, partly due to uncertainty over the new base contract, an increasing number of dentists have moved over to Personal Dental Service schemes (Figure 6).[33] In July 2004 over 1,500 dentists in more than 750 practices were working under Personal Dental Service contracts.[34] By January 2005 this had increased to 3,500 dentists in 1,300 dental practices, and a further 500 practices had applications in the pipeline. Once those applications are approved around 20% of practices will be working under Personal Dental Service contracts.[35] The Department has set a target of 25% of practices working under Personal Dental Service contracts by April 2005.[36]

Figure 6: Increase in dentists with Personal Dental Service contracts between October 1988 and January 2005

Source: NAO and Dental Practice Board

Differences between the Department and dentists on the new contracting arrangements

21. The new contracting arrangements require Primary Care Trusts to commission local dental services in response to local needs. Dentists will be paid for delivering local contracts rather than for each item of treatment. After entering into discussions with the Department about the nature of the new contract, the British Dental Association became concerned that dentists would have to meet targets for courses of treatment and, in October 2004, pulled out of discussions. Subsequent to the hearing the Department told us that they did not expect this setback to lead to any delay in the timetable for implementing the new arrangements as local negotiations were the key to progress.[37]

22. The Department intends that the introduction of the new base contract and changes in working practices will free up capacity within dental practices. For example, the National Institute for Clinical Excellence has recommended that the traditional six month recall period be replaced with the most appropriate recall period for individual patients, which could be up to two years in some cases.[38] The Department wants dentists to use the spare capacity this could create to take on additional patients, thus increasing access to NHS dentistry. The British Dental Association told us that freed up capacity was an illusion. Dentists would be performing fewer items of treatment, such as fillings, but would spend more time with their existing patients explaining preventive methods which would help them to improve their oral health.[39]

The new system of patient charges

23. The NHS Dentistry Patient Charges Working Group made recommendations to Ministers about the simplified patient charges regime which will accompany the introduction of the new base contract in April 2004. The Department has not yet published details of the new charges. Dentists' practices are essentially small businesses and the uncertainty surrounding the details of the new charging system is creating uncertainty and anxiety.[40] At the hearing the Department said it was still considering the new charges and would ensure that details of the charges and the contract would be published in advance of October 2005. Since the hearing the Secretary of State for Heath has announced his intention to delay the introduction of the new contract and patient charges regime until April 2006 and, in the summer of 2005, to publish for consultation the new regulations for commissioning of primary dental services and dental charging.[41]

24. Where dentists are no longer remunerated on a piecework basis activity levels typically fall by some 10%. Under the current system this would lead to a drop in income from patient charges. Furthermore, dentists no longer have a direct financial incentive to collect patient charges because, under the new system, their income is guaranteed for three years and there is a risk of dentists not providing the resources to undertake this work, of under recording activity or offering NHS patients private treatment at reduced rates at a cost to the NHS. The Department guaranteed that that where patient charge revenue fell because of new ways of working, practices would not lose out financially. However it said that practices would continue to be financially liable for bad debts, and that those patients with outstanding bad debts who approached NHS Direct or their Primary Care Trust for assistance in finding NHS dental care would not necessarily be identified.[42]

25. Where income levels from patient charges fall the Department and the Primary Care Trusts will be responsible for making up the shortfall. The Patient Charges Working Group considered within its proposal how to devise a system that could raise the same proportion of service cost as the current system of patient charges. The Department believed it would be possible to introduce a far simpler system of patient charges which would be less onerous and bureaucratic for dentists to administer.[43]

Primary Care Trusts' capacity to manage contracts with dentists' practices

26. From October 2006 the NHS dentistry budget will be allocated to all Primary Care Trusts which will monitor the oral health of their populations and commission dentistry services based on local need. There will be a member of staff in each trust whose responsibility it will be to manage contracts with dentists.[44] Although trusts have had previous experience of negotiating GP's contracts, there is a significant risk that a lack of resources and experience of monitoring oral health and commissioning dental services within trusts will lead them to conduct ineffective negotiations with dental practices.[45] Unless funds for dentistry are ring-fenced within trusts then there is a further risk that these funds will be diverted towards other priorities. The Department has established a support team to provide advice and guidance on commissioning to the trusts.[46]

27. With the introduction of the new contracting arrangements and the cessation of items of service claims for payment the monitoring presently used by the Dental Reference Service will be difficult to sustain. The Dental Practice Board has identified that in light of the reduction in the range of information that will be available; the balance of potential risks to public funds under the new arrangements is likely to be significantly different from that under the current arrangements. New approaches such as patient audit questionnaires, patient record checks and an expansion of checks on patient payment status are being developed in order to continue to provide the necessary assurance.[47]

25 C&AG's Report, para 1.15 Back

26 17^th Report from the Committee of Public Accounts, National Health Service: General Dental Service (HC 111, Session 1984-85) Back

27 1^st Report from the Select Committee on Health, Access to NHS Dentistry (HC 247, Session 2000-01) Back

28 Audit Commission Report, Primary Dental Care Services in England and Wales, September 2002 Back

29 C&AG's Report, paras 4, 1.48; Q 1; Options for Change, Department of Health, 6 August 2002 Back

30 C&AG's Report, para 1.63 Back

31 ibid, para 6; Q 1 Back

32 C&AG's Report, paras 7, 2.6-2.10 and Figure 18; HC Deb 10 January 2005, cc 7-8 WS Back

33 C&AG's Report, para 1.63 Back

34 NHS Dentistry: Delivering change, Report by the Chief Dental Officer (England) July 2004 Back

35 HC Deb 10 January 2005, cc 7-8 WS Back

36 Letter from the Chief Dental Officer (England), 21 February 2005, Gateway reference 4449 Back