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The Impact of the new NHS Dental Contract

D. Bonetti, J. Clarkson, M. Chalkley, C.Tilley and L. Young. The Impact of the new NHS Dental Contract. 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.

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The Impact of the new NHS Dental Contract

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  1. D. Bonetti, J. Clarkson, M. Chalkley, C.Tilley and L. Young The Impact of the new NHS Dental Contract

  2. 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

  3. 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

  4. NHS Dentistry before and after the New Contract • The public perception • ‘Disappearing’ • Being replaced by ‘expensive’ private care • Abandoning people to their own fate Man pulls out own teeth with pliers Oct 19, 2007 A 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.

  5. NHS Dentistry before and after the New Contract • 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

  6. NHS Dentistry before and after the New Contract • The `New Contract’ • Comes into effect in 2006 in England & Wales • Replaces both GDS (Fee-for-Service) and PDS (quasi salary)‏ • Specifies payment in terms of per completed treatment (in 4 bands)‏ • 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 …. ?

  7. Feeband Description UDA 1 Routine examination, scaling and diagnostic procedures 1.0 1 URGENT One of a specified set of possible treatments provided to a patient in circumstances where: 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 care and treatment is only provided to the extent that it is necessary to prevent that significant deterioration or address that severe pain 1.2 2 Fillings and extractions 3.0 3 Treatment requiring laboratory work 12.0 NHS Dentistry before and after the New Contract Bands of treatment under the New Contract

  8. 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?

  9. Economics of the New ContractComparative Statics • Quasi salaried • Fee for service (self-employed)‏ • ‘New’ Contract (self-employed England)‏

  10. Economics of the New ContractComparative Statics

  11. Economics of the New ContractComparative Statics

  12. Economics of the New ContractComparative Statics

  13. Economics of the New ContractComparative Statics

  14. Economics of the New ContractComparative Statics

  15. 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

  16. 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

  17. 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

  18. 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).

  19. Estimating the Impact of the New Contract • 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)‏ • We have the dentist’s ID and characteristics and some characteristics of the patient undergoing the treatment.

  20. Estimating the Impact of the New Contract • Mean number of courses of treatment per dentist per month

  21. Estimating the Impact of the New Contract • Proportion of courses of treatment in Band 1 (low treatment intensity)‏

  22. Estimating the Impact of the New Contract • Proportion of courses of treatment in Band 2 (high treatment intensity)‏

  23. Estimating the Impact of the New Contract • Econometric specification (courses of treatment)‏

  24. DENTISTS SE t P>t Observations ALL -12.585 9.245 -1.360 0.177 1216 GDS 13.792 11.468 1.20 0.234 706 PDS -33.792 7.029 -4.810 0.000 599 Estimating the Impact of the New Contract • Results – Courses of Treatment (CoT) estimate of • Fixed effects regressions • Negative coefficient => positive impact of new contract • Mean number of CoT is 125 • R Square approx. 0.62, mainly due to FE

  25. Estimating the Impact of the New Contract • 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

  26. October 2005 - March 2006 April 2006 - November 2006 Band England & Wales Scotland England & Wales Scotland Na 0.95 1.23 0 1.12 1u 2.58 2.75 9.51 2.56 1 56.86 45.45 51.64 51.4 2 34.17 41.39 32.6 37.66 3 5.45 9.18 6.25 7.27 Dentists 55 33 58 37 Observations 44497 22786 68837 35104 Estimating the Impact of the New Contract • Distribution of Treatments across Bands

  27. Estimating the Impact of the New Contract • Econometric specification (treatment intensity - band)‏

  28. Coef. SE t P>t Dentists Observations Band 1 0.098 0.018 5.590 0.000 98 171224 Band 1u2 -0.083 0.015 -5.410 0.000 98 171224 Band 3 -0.024 0.005 -4.420 0.000 98 171224 Estimating the Impact of the New Contract • Results – Bands • Fixed effects linear probability regressions • Negative coefficient => positive impact of new contract • Bands 1u and 2 combined (due to classification issues)‏ • Results here are not affected by previous contract • Results qualitatively similar in MNL and Mixed MNL specifications

  29. Estimating the Impact of the New Contract • New Contract has substantially reduced (increased) the probability of low (high) intensity treatments. • Effect is similar across both previous FFS and PDS dentists

  30. Estimating the Impact of the New Contract • 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’.

  31. 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!)‏ • Unanticipated consequences – “Up-Banding” of patients

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