The Impact of the new NHS Dental Contract

1
The Impact of the new NHS Dental Contract

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

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
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 dentists 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)?

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Estimating the Impact of the New Contract

• Results Courses of Treatment (CoT) estimate of
• Fixed effects regressions
• Negative coefficient gt 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
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
Estimating the Impact of the New Contract

• Results Bands
• Fixed effects linear probability regressions
• Negative coefficient gt 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 NHSs problems!)?
• Unanticipated consequences Up-Banding of
  patients