NHS dental payment reform: business and regulatory impact assessment

Options

Option 1 – Do Nothing

As described above the Government views payment reform as the single most important intervention to preserve NHS dental services into the medium- to longer-term.

Option 2 – Payment Reform of Fee Per Item retaining a Blended System of Payment

As described above payments to GDPs comprise a range of payments, including fee per item, capitation, allowances and direct reimbursement. Each set of payments retain certain advantages and it is the Government’s view that by combining different payments as a blended payment system we achieve different aims. For example, fee per item incentivises the contractor to see and treat patients. At the same time the Government understands that a pure fee per item model would not be sustainable for GDPs and therefore needs to balance against other payments such as capitation, where payment is not dependent on seeing patients.

Option 3 – Replacement of Fee Per Item with Capitation/Fixed Payment

Capitation affords the advantage of providing continuity of income to contractors regardless of the levels of NHS care provided. However it is ordinarily associated with sub-optimal outcomes as the payment is not directly linked to seeing and treating patients.

Secondly, the Government’s view is that a large number of practices providing the majority of NHS care in Scotland have business models that are embedded in the fee per item model. Radical change of the payments model would increase the risk of destabilising practice income and jeopardise the achievements to date in preserving the sector during the pandemic, and subsequent recovery.

Summary

The Government’s view to retain the blended payment system is supported by recent academic research published in the British Dental Journal (December 2021) which concluded on payment systems:

“Other types of payment systems have been described in the literature, such as capitation-based payment systems and pay-for-performance-based systems. There are several pros and cons for each, meaning that blending several system types may be an ideal solution to obtain better health outcomes for the patients, while maintaining access to dental care and respecting the financial stability of dental practices.”^[1]

Benefits and Costs of Each Option

Payment reform is largely about preserving the status quo. There is the potential in simplifying fee per item payments, and enabling NHS dental teams to have more clinical discretion in treating patients, for efficiency savings to be realised with dental practices. However, we have no precise evidence for this effect. As part of the payment reform programme, the intention is to regularly monitor the new suite of fee per item payments.