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PCTs: measuring future performance
15th Oct 2005
The past is not always an indicator of future performance, says Pritesh Shah, discussing some of the implications of the points system introduced in the proposed draft General Dental Services contract: A little while back, I met a financial adviser who told me that ‘the past is not always an indicator of future performance’. He was talking about investments, but his point also holds true for the proposed new draft of the General Dental Services (GDS) contract, released this summer. Dentists will now earn points for the work they do, called units of dental activity (UDA). Orthodontists will have their own separate acronym for units of orthodontic activity, called UOAs. Based on the proposed patient charge bands for routine and urgent care, UDA values have been assigned to each of the bands. In addition UDA values have also been assigned to charge exempt courses of treatment such as the issue of a prescription or repair of a dental appliance. There will be a formula for working out the target UDA level for each dental practitioner, based on their activity within the baseline period that goes from October 2004 to September 2005. This baseline, less 5%, will then be used to agree the level of activity for 2006/07 in return for the baseline contract value. The 5% reduction reflects the fact that there will be some reduction in activity because of ‘new ways of working’, such as putting greater emphasis on a preventive approach. At first glance, it appears that the simplification of the existing fee per item system should benefit the patient, the dentist and the PCT (Primary Care Trust). The band system will make it easier for patients to understand NHS charges; minimise the paperwork for dentists; and also help PCTs to monitor future contracts. So far, so good. However, there are still some bumps on the UDA road that will need to be carefully traversed. Chief amongst them is the fact that PCTs will have to honour past contract values. What this means is that we will have a fee per unit system where every dentist will effectively be paid a different value for that unit. Even within the same practice, if dentists opt for separate contracts they could get a different fee for a unit of activity. And if we’re talking about a big difference in the amount each dentist is being paid for seeing the same patient in the same dental practice and doing the same work, it is likely to lead to issues between colleagues. PCTs and UDAs Once the protection of the contract values is removed in three years’ time, market forces will effectively dictate what range of fees per UDA the PCT will pay, and this will cease to be as big an issue. When this happens, we will probably see a convergence of the value paid per unit within a particular PCT area. The next issue concerns dentists who have recently set up a new NHS practice, or have had a new dentist join their practice. In both instances, there probably won’t be a full year’s baseline period for the PCT to compare against, so they will effectively have to negotiate a contract value. While the PCT will have an idea of the average value of a unit of dental activity, there is no guarantee that they would actually pay this amount, or that it would be acceptable if they did. However, while it’s true that the PCT has limited resources and will be looking to get ‘value for money’, it’s worth remembering that ‘value’ is more than just the number of units of activity. If a new practice or extra surgery is willing to take on a lot of new patients, or is providing access to NHS care in the evenings and weekends, then the PCT will take this into consideration. Ultimately, most PCTs will be keen to reach a mutually acceptable contract value. Another big issue concerns dentists who over-perform. We all know that at present if you work harder, see more patients and perform more treatments then you earn more. The dentist is in control to some extent of his annual earnings. The proposed new contract will have a fee per unit system but because of a set contract value, the number of UDAs will also be agreed at the start of the year. Dentists who over-perform against their contract will need to negotiate during the year with the PCT for any further payments. Some over-performing dentists may well be knocking on the PCT door for more money during the last quarter of 2006/07. If the PCT does not have any money set aside, it will not be able to pay for over-performance until it can claw some money back from those dentists who have under-performed. The PCTs may monitor performance against contract on a quarterly basis. Where there is significant underperformance they may be able to withhold some of the monthly payments, but this does not mean that the PCT can definitely use the money for over-performance elsewhere. The underperforming practice will have the full 12 months to meet its contracted UDA target. Therefore, the trouble is, any significant ‘claw-back’ that takes place will probably occur after the end of the financial year, which means that the PCT won’t know how much money they will have available until then, by which time it could be too late. Over-performing dentists As a result, if over-performing dentists believe that they won’t be paid any extra, they may consider that after they meet their UDA target the only option for them is to close their NHS appointment slots for routine care until the next financial year. The PCT may then be left to deal with members of public who cannot access routine NHS dental care with their dentist until the next financial year. To counter this, some forward-thinking PCTs may decide that they want to pay for over-performance by keeping back some of the growth money that they have been assigned to improve access to NHS dentistry. But this approach could also cause problems. In particular, it could limit the number of new practices or increases in NHS capacity that the PCT will agree at the start of the year. Finally, when the last new contract was introduced in 1990, average dentists’ earnings increased more than the Department of Health had anticipated. To reverse this, in 1992 there was a cut in dentist’s fees. This time round, the contract values will be pre-agreed and the monies allocated to PCTs limited, but there are still financial risks related to a potential decrease in patient charges. There is a lack of clarity at the front line as to whether the Department of Health or the PCTs will underwrite any shortfalls in patient charges over the coming years. If PCTs have to underwrite them, it could take a further chunk out of their growth monies, and further impact their ability to increase NHS capacity and improve access to NHS care. So we could see a situation where some PCTs are left with an unspent surplus at the end of the year, while others have a deficit, which is hardly an efficient approach to strategic planning. No doubt, these issues will be resolved one way or another. But as we think back to 1992, we should remember that while the past may not be a guide to future performance, it can still provide us with a useful lesson or two.
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