Article
This article relates my experience of selling my orthodontic practice to a dental corporate body. It includes the advantages and disadvantages of the sale, and my advice and recommendations to anybody who is considering such a move. Some decisions made by the dental corporate body did have an indirect impact upon clinical practice. The objective of the article is to highlight the advantages and pitfalls of selling an orthodontic practice and how to attempt to mitigate against the latter as much as possible.
I jointly opened my orthodontic practice on the first of October 2000 with my colleague, Dr Stephen Duffy. It was in an ideal location on the first floor of a premises in North Leeds. In a newly built shopping centre, with extensive parking and ideally located for easy access by private and public transport, the landlords had earmarked a large first floor area for use as a general medical practice. The premises were vacant, and we approached the landlords with a view to leasing them for a 20-year period. It already had planning permission for both dental and medical use, so it was a relatively quick process to convert and equip the practice.
Over a period of 16 weeks the practice was completed and ready to open. It consisted of an open plan area that contained six clinical units and two side surgeries, each one a single clinical unit. An office, X-ray room, laboratory, practice coordinator office, shower, toilets and baby changing facilities, staff room with kitchen, reception area and a storage system for 5000 sets of study models completed the picture.
The practice thrived and over the next 5 years became an extremely busy mixed NHS and private practice. At that time all practices were free to accept as many patients who requested NHS treatment as they desired. With the introduction of the new NHS orthodontic contract of 2006, this situation changed overnight. For the first time, a contract was in place that limited NHS orthodontic treatment to existing providers, and a contract value was placed on the practice. Our contract value was high and we were the main provider of treatment in Leeds. In 2009, we were approached by Integrated Dental Holdings (IDH). They wished to buy the practice and after protracted negotiation we agreed terms and the sale was completed.
A new practice owner
Thankfully IDH proved to be a thoroughly ‘benign’ owner. Clearly, they had much experience of buying successful dental practices and took an extremely ‘hands off’ approach to their new acquisition. This was a mutually agreeable situation because we were left to effectively run the practice exactly as before. While IDH obviously wanted to maximize profit, they trusted us, as the people who had made the practice successful, to continue to work in the same vein. We had complete clinical freedom, could use a laboratory of our choice and use any of the recognized orthodontic supply companies. That is not to say that there were absolutely no issues, but no more than one might expect from a reasonable owner. We continued in this extremely agreeable way for many years and both parties were happy with the arrangement.
Things were about to change. IDH then sold all their practices, and the new owners decided on a major rebrand. That alone would have been absolutely fine, but along with the rebrand came a new management team that were of an entirely different mindset to IDH. Their view seemed to be that the clinicians who had made the practice so successful for many years, would now be bypassed when clinical decisions were to be made. That materially affected the character and mindset of all working within the practice, as well as the clinical profile of the practice.
A good example was the decision to expand the range of services offered, and to this end it was proposed that an implantologist and an endodontist should be employed. The clinician's office was converted, at great expense, to a new surgery for the implantologist and we were exhorted to persuade patients to use this services. It did not occur to the management that only a very small number of adult patients actually required the services of an implantologist and that the GDPs who referred their patients for orthodontic treatment may not take too kindly to their patients being offered ‘other services’ at another practice. To nobody's great surprise, and despite our frequent warnings, this departure from the status quo produced absolutely no patients at all for the implantology service. Not one! It was then implied by the management that this lack of patients was because the clinicians and ancillary staff had not been sufficiently enthusiastic about the new service on offer. It did not occur to them that that was not actually our role. We were orthodontic specialists who had the best interests of our patients first and foremost in our minds, not salespeople.
Sadly, more and more clinical and non-clinical decisions were made in the practice that negatively impacted upon the morale of the staff. As a result, morale plummeted and staff began to leave. New replacement staff were rapidly employed, but often left quickly, leaving us chronically understaffed for a long period of time. The ‘management team’ seemed utterly oblivious about what the ingredients were for a successful practice, and simply ignored legitimate, frequent complaints. In football parlance, they had ‘lost the dressing room.’
The final straw for me was when the study model filing system was removed, without any consultation whatsoever, and the all of the patients' orthodontic models were transferred to a distant practice in Barnsley, over 30 miles away. This included the models of patients under current treatment, so there was a potential clinical negligence issue. The models were literally dumped there, in the most haphazard way imaginable, and despite my written protests, I was fobbed off with ‘that they were stored correctly, and they were of course immediately retrievable.’
I felt I had no choice but to resign and worked my requisite 6 months' notice period. In my resignation letter I detailed the many reasons for leaving, including the medico-legal implications for both the practice and for myself, but did not even receive a reply. My final day of work was the 1st October 2019, exactly 19 years after the initial practice opening.
The practice finally closed in June 2022, having lost the NHS contract.
Lessons learned
So, what have I learned from my experience? The most important thing to realize is that you can only sell your practice once, so make sure you sell it to the best of the dental corporate bodies (DCBs). I strongly recommend that you do your research and track down people who have already sold to your prospective buyer. There are many DCBs out there and I have heard some quite alarming reports about several of them.
When negotiating the sale, it is human nature to concentrate solely on the sale price. While this is extremely important, it is also vital to try to future proof non-financial aspects of the sale. For example, with hindsight, I would have inserted a clause that the practice would remain an entirely specialist orthodontic practice, unless both parties agree to a variation of the contract.
It has to be said that there are a number of good things about working for a DCB after selling your practice. Aside from the obvious financial rewards, the laborious parts of owning a practice disappear immediately. The relentless paperwork and regulatory hurdles that increased year on year, almost drove me to despair. Instead of coming home after a long and exhausting day and reluctantly disappearing into your office for a couple of hours you can just collapse on the sofa, put your feet up and watch Eggheads (other general knowledge quizzes are available).
There are however disadvantages too. When I owned my practice, I was entirely responsible for the acts and omissions of my staff, as well as having to maintain the high standards expected of any professional person. Any failings would have made me liable to a GDC hearing. Inexplicably, the same standards do not seem to apply to the owners of DCBs. I have highlighted above the casual attitude of the management regarding the need to maintain excellent record keeping. I am sure that they would not have been as cavalier if they were held accountable in the same way as practice owners. This is something that needs addressing so that patients are protected from the failings of the less scrupulous DCBs.
Finally, it is 13 years since I sold to IDH. There have been dramatic changes since then regarding profitability within the DCB world. Although it has been said many times in the past, by a large number of experienced clinicians, I am another one who cannot really see a healthy future for NHS Orthodontics. I know many clinicians who, having worked for the NHS, are now fully private, and I don't know any who regret this transition. I foresee many DCBs struggling to survive in the future. If I were in my fifties now and still working, with the benefit of the retrospectoscope, I think it extremely unlikely that I would sell my practice to a DCB. After all, nobody looks after a baby better than its parent.