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 12.0 Treatment requiring laboratory work 3 3.0 Fillings and extractions 2 1.2 One of a specified set of possible treatments provided to a patient in circumstances where: 1.prompt care and treatment is provided because, in the opinion of the dental practitioner, that persons oral health is likely to deteriorate significantly or the person is in severe pain by reason of their oral condition; or 2.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 1.0 Routine examination, scaling and diagnostic procedures 1 UDADescriptionFeeband Bands of treatment under the New Contract

8. Economics of the New Contract Comparative 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 Contract Comparative Statics Quasi salaried Fee for service (self-employed) New Contract (self-employed England)

10. Economics of the New Contract Comparative Statics

15. Economics of the New Contract Dynamics 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 Contract Dynamics 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 Contract Summary 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. Econometric specification (courses of treatment) Estimating the Impact of the New Contract

24. 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 Observations P>ttSEDENTISTS 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 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

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

28. 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 171224980.000-4.4200.005-0.024Band 3 171224980.000-5.4100.015-0.083Band 1u2 171224980.0005.5900.0180.098Band 1 Observati ons Dentis tsP>ttSECoef.

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