The Impact of the new NHS Dental Contract

The Impact of the new NHS Dental Contract

D. Bonetti, J. Clarkson, M. Chalkley, C.Tilley and L. Young

Overview

• NHS dentistry before and after the “New Contract”

• Economics of the New Contract• Some initial estimates of the impact of the

New Contract

• Summary – Policy implications

NHS Dentistry before and after the New Contract

• Focus on ‘high street’ dentistry

• NHS is (still) the major funder/purchaser– Contracts with independent contractors Self-

Employed General Dental Practitioners (GDPs)(

• England and Wales: GDS Contract, PDS Contract• Scotland : GDS Contract + some salaried dentists


• The public perception– ‘Disappearing’

– Being replaced by ‘expensive’ private care

– Abandoning people to their own fateMan pulls out own teeth with pliersOct 19, 2007A man has described how he pulled out seven of his own teeth because he was told to wait for an appointment to see an NHS dentist.Taxi driver Arthur Haupt used pliers and a technique he had learned in the army to carry out the DIY dentistry.He said he was forced in agony into taking the drastic action because he was given a three-week wait by staff at his local NHS dental surgery and couldn't afford the £75-a-tooth treatment he was quoted by a private practice.


• The context– In both Scotland and England & Wales about

50% of adults and 70% of children have been seen by an NHS dentist in the last 18 months. The former has fallen a little since 1995, the latter has risen.

– Private sector provision is rising


• The `New Contract’– Comes into effect in 2006 in England & Wales– Replaces both GDS (Fee-for-Service) and PDS (quasi

salary)s– Specifies payment in terms of per completed

treatment (in 4 bands)t– Introduces a new ‘contract currency’ UDA with each

banded treatment given a UDA score.– Complex transitional arrangements but in essence it

is £/UDA– Contract specifies volume and price. If under volume

dentist ‘refunds’ if over volume …. ?


12.0Treatment requiring laboratory work3

3.0Fillings and extractions2

1.2One of a specified set of possible treatments provided to a patient in circumstances where:

2. prompt care and treatment is provided because, in the opinion of the dental practitioner, that person’s oral health is likely to deteriorate significantly or the person is in severe pain by reason of their oral condition; or

3. care and treatment is only provided to the extent that it is necessary to prevent that significant deterioration or address that severe pain

1 URGENT

1.0Routine examination, scaling and diagnostic procedures1

UDADescriptionFeeband

Bands of treatment under the New Contract

Economics of the New ContractComparative Statics

• Consider the intensity of treatment of a patient t• New Contract replaces Fee-for-Service ( a

smooth continuous function in t) and quasi-salary (a smooth zero sloped payment function) with stepped payment function.

• How will this impact on treatment decisions given:– Variation in dentists

– Variation in patients?


)(tP

t

Quasi salariedFee for service (self-employed)F‘New’ Contract (self-employed England)E


0 5 10 15 20 25 30

100

50

50

100

150

200200

72.5−

v N t( )

v S t( )

v F t( )

300 t

0 5 10 15 20 25 30

100

50

50

100

150

200200

72.5−

v N t( )

v S t( )

v F t( )

300 t

Economics of the New ContractDynamics

• In practice dentists may not adjust instantaneously:– Adjustment costs

– Learning regarding new arrangements– Changes in administrative arrangements for

new contract (monitoring) are still on-going

Economics of the New ContractDynamics

• New contract was announced in principle in April 2005

• Initial 3 years of new contract is 'transitional'

• Initial price set in relation to work done in the year prior to introduction of new contract

• Dentists may thus have been adjusting treatment in anticipation

Economics of the New ContractSummary

• Static Model– Treatment intensity determined by

• contract,

• case mix,

• dentists preferences and costs -- b(.) and c(.))

– Number of treatments determined by• treatment intensities

– Expect bunching of treatment at thresholds– Impact of New Contract is ambiguous

• Expect adjustment + Anticipatory effects

Estimating the Impact of the New Contract

• Dentist behaviour (numbers treated and treatment intensities) before and after contract introduction confounded by changes in case mix, dentists’ costs, practice style etc.

• Use individual level data and a differences-in-differences design (use Scottish GDS dentists as control).


• Data– Administrative records for a sample of 98 (62 England

and 36 Scotland) newly qualified dentists for the period October 2005 to November 2006.

– Observe number of courses of treatment and for each treatment (about 170,000) which UDA band its falls

– (for Scotland we have the full items of treatment but these are no longer recorded in England)n

– We have the dentist’s ID and characteristics and some characteristics of the patient undergoing the treatment.


0

20

40

60

80

100

120

140

160

180

200

Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06

England & Wales Scotland

• Mean number of courses of treatment per dentist per month


• Proportion of courses of treatment in Band 1 (low treatment intensity)P

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7




• Proportion of courses of treatment in Band 2 (high treatment intensity)P

0

0.02

0.04

0.06

0.08

0.1

0.12



• Econometric specification (courses of treatment)E



• Results – Courses of Treatment (CoT) estimate of– Fixed effects regressions – Negative coefficient => positive impact of new contract

12160.177-1.3609.245-12.585ALL

7060.2341.2011.46813.792GDS

5990.000-4.8107.029-33.792PDS

ObservationsP>ttSEDENTISTS

•Mean number of CoT is 125

•R Square approx. 0.62, mainly due to FE


• New Contract has had little impact on previous Fee-for-Service dentists

• But has increased number of courses of treatment by more than 15% for previously PDS dentists


• Distribution of Treatments across Bands

35104688372278644497Observations

37583355Dentists

7.276.259.185.453

37.6632.641.3934.172

51.451.6445.4556.861

2.569.512.752.581u

1.1201.230.95Na

ScotlandEngland & WalesScotlandEngland & WalesBand

April 2006 - November 2006October 2005 - March 2006

• Econometric specification (treatment intensity - band)b



• Results – Bands– Fixed effects linear probability regressions – Negative coefficient => positive impact of new contract– Bands 1u and 2 combined (due to classification issues)B

•Results here are not affected by previous contract

•Results qualitatively similar in MNL and Mixed MNL specifications

171224980.000-4.4200.005-0.024Band 3

171224980.000-5.4100.015-0.083Band 1u2

171224980.0005.5900.0180.098Band 1

Observations

DentistsP>ttSECoef.


• New Contract has substantially reduced (increased) the probability of low (high) intensity treatments.

• Effect is similar across both previous FFS and PDS dentists


• Reconciling CoT and Banding Evidence– CoT seems to suggest treatment intensity decreasing

(for PDS) and constant for GDS following contract change.

– Band Evidence (up-banding) suggests intensity increasing

– Therefore some evidence that previous intra-marginal patients are being treated less intensively, whereas patients close to the next band are having more intense treatment.

• The stepped payment function is resulting in treatment intensity ‘bunching’.

Summary – Policy

• New Contract a response to lack of availability• Theory of incentives embodied in new contract is

not clear• Contract seems to have incentivised more

treatments– But limited to the PDS (the previous experiment to

solve the NHS’s problems!)s

• Unanticipated consequences – “Up-Banding” of patients

The Impact of the new NHS Dental Contract

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