The announcement of the programme is a significant change for Denplan, the first question many people will ask is, “What’s in it for you?”
SB: Having provided a range of funding and support packages to member practices for many years, the partnership programme is the next 'step' in this journey. Coupled with the continued growth in private dentistry it is a natural progression for us to invest in dental practices and our members. This programme is also about supporting the heart of family dentistry - helping those dentists who want to ensure the same quality of care continues for their generation of patients after they retire. We believe it will also provide more financial certainty for dentists who are approaching retirement and reduce the burdens of being a business owner.
The partnership programme will take significant investment, how are you able to fund this?
SB: The funding for this programme comes from Simplyhealth. Simplyhealth, which owns Denplan, operates on mutual values, which means it can re-invest profits into the business for the benefit of their customers. It shares Denplan’s long term vision to promote this initiative which is about providing the widest level of support for our member dentists.
Does Denplan have specific targets for the partnership programme’s growth? Will there be an aggressive expansion following the roll-out?
SB: Over the next several years Denplan aims to roll out the partnership programme to approximately 200 practices.
The partnership programme sees Denplan enter the dental provision market, and so puts it in competition with other practices: Would Denplan purchase 50 per cent of a practice in a location that would put it in direct competition with other Denplan member practices? And if a practice wished to convert to Denplan would you make them aware that a Partnership Practice is operating nearby?
SB: We have worked for over two years on a model which has positive benefits for all sides. We spoke to many of our
member practices before we launched this programme and the feedback we had was hugely positive in terms of any concerns about dental partnership practices becoming an inadvertent competitor. We would not have any concerns about letting a practice know that there is a Denplan partnership practice operating nearby.
Can you reassure existing member practices that there will be no preferential treatment and no extra services offered to Partnership Programme practices?
SB: Yes, we can reassure existing member practices that these practices will not get preferential treatment. The partnerships will be run as a separate operating company to ensure there is no conflict of interest, issues with access or sharing of sensitive practice information. The Denplan Partnerships Ltd practices will be treated like all other Denplan member dentists including admin and insurance fees and contact with consultants for support.
Who do you expect the partnership programme to appeal to?
SB: This programme has been designed to directly support our member dentists who are looking to realise part of the value of their practice in the five to 10 years prior to retirement. It is ideally suited to single principal owners.
There are already a number of options for a dentist beginning to think of retirement, so why should a dentist choose the partnership programme you are offering?
SB: We believe the programme offers a real incentive for dentists to be directly involved in the financial reward they receive when they retire. We will use the pilot programme to inform the process going forward but the Denplan brand is well positioned to enter these partnerships with strong relationships already in place. We believe this is a unique proposition in the marketplace.
The programme will only be attractive to dentists who wish to sell 50 per cent of their stake in the practice. Dentists will be able to directly influence the financial performance of the practice while continuing to realise some of the financial benefits of running a successful practice immediately; they will maintain responsibility for the day
to day management of the practice.
Aside from day to day management, what else will the principal retain control of and what areas will be in Denplan's hands?
SB: With their 50 per cent ownership stake dentists will maintain control of the day to day operation of their practice including their brand and practice name which will remain the same. The dentist also remains responsible for patient care, clinical quality, employment and the growth of the practice.
With its 50 per cent ownership stake Denplan assumes responsibility for choosing and developing a successor dentist, supporting quality and regulatory compliance – via the Excel accreditation scheme.
In time, Denplan may consider the provision of back office services, and will take dual responsibility for identifying growth opportunities for the practice as well as identifying potential economies of scale with the practice.
Is a dentist still in control of their own destiny in terms of the timing of their retirement?
SB: The partnership practice principal will continue operating the practice until a mutually agreed time, based on their desired timescales for retirement. Denplan will take the time to understand their personal situation and seek to build a long term, mutually beneficial relationship with all the practice principals.
When a dentist does decide to retire, how involved is he or she in the selling of his or her half share?
SB: Denplan will lead the successor planning with the principal. This will include criteria to reflect the original partner in terms of clinical competency, ability and a drive to run a successful business partnership.
When the programme was launched you claimed it would guarantee the basis on which the remaining 50 per cent would be valued when the partner dentist wished to sell. Can you just explain in a bit more detail how this works?
SB: At the end of the agreed term Denplan will take responsibility for the remaining 50 per cent share from the principal on the same multiple of profit as at the beginning of the partnership agreement. This will be based upon the profit history at the time of exit. This is the 50 per cent stake that the incoming dentist will then acquire as part of their taking ownership of the practice’s 50 per cent.
The opportunity to purchase 50 per cent of a practice and have complete control over its management will be hugely appealing, who do you see as the typical incoming dentist?
SB: We believe the partnership structure will be particularly appealing to younger dentists, who with ever increasing student debts against a backdrop of tighter bank lending for practice acquisitions, are finding it increasingly difficult to buy or part-own a practice.
Would it be possible for an incoming dentist to purchase the entire practice?
SB: No, this is not part of the long term strategy for Denplan dental partnerships.
Lastly, but perhaps most importantly, will patients be affected by the programme in any way?
SB: No, all our patients will receive exactly the same high standard of service they have come to expect.