Private equity sharks are cashing in on the crisis in NHS dentistry with debt-fuelled firms taking big bites out of the sector – including one advised by a former Health Secretary.
The latest entrant is Bridgepoint, which previously owned care home operator Care UK, and has spent a reported £800 million buying a majority stake in MyDentist.
MyDentist, which runs more than 500 practices, has a 5 per cent share of the UK market and is the biggest chain providing NHS services.
Bridgepoint’s advisors include former Labour Health Secretary Alan Milburn, recently appointed lead non-executive director at the Department of Health and Social Care.
The UK-based firm’s chief executive Raoul Hughes could earn a bonus of more than £2.5 million this year on top of his £850,000 salary, up from £1.6 million last year.
Fears have been raised about the impact on patient care of chains – most owned by profit-hungry, private equity – now running 12 per cent of practices, and even whether they will attempt to ‘hold the Government to ransom’ for payments.
Fatal extraction: There is concern the dental sector could end up in the same position as care homes and veterinary services
Already, the cost of a basic filling at one leading private equity-owned chain is three and a half times the amount charged by an NHS dentist.
There is concern the sector could end up in the same position as care homes and veterinary services, where prices have soared amid private equity domination.
The Centre for Health and the Public Interest think-tank published research in May showing £1.5 billion is taken out of the care home sector each year in returns to shareholders and investors.
Meanwhile, a paper in the British Medical Journal said ownership by big business pushed up prices and had ‘mixed to harmful impacts’ on patient care.
Separately, the Competition and Markets Authority is conducting an ongoing investigation into pricing at veterinary practices, 60 per cent of which are now controlled by big chains, several of which are private equity-owned.
Health Secretary Wes Streeting has pledged urgent reform of dentistry as the number of people to have seen an NHS practitioner in the past two years fell to just 40 per cent. Some areas of Britain have been deemed ‘dental deserts’ with no NHS dentists for miles and a severe lack of capacity even at private clinics.
It comes amid a shortage of dentists wanting to take on health service work due to a disastrous contract imposed almost two decades ago by New Labour.
The journal Healthcare Business International has described UK dentistry as ‘ripe for consolidation with single and dual practices still dominant’. It predicts there is ‘room for growth’ by big firms.
Other private equity-backed chains are Portman Dentex and Rodericks – whose ownership by firms with links to the tax havens of Luxembourg and the Cayman Islands respectively has sparked unease among senior MPs and campaigners.
Dennis Reed, of older people’s rights group, Silver Voices, said he feared the ‘extinction of NHS dentistry’, adding: ‘In private residential homes prices are astronomical because they are owned by these large groups, hedge funds and private equity companies, which are driving up costs. I would hate for dentistry to go the same way.
‘If they take over, private prices will go up and they will hold the Government to ransom for NHS dentistry too, demanding more and more money.’
Labour MP Clive Betts, deputy chairman of the Public Accounts Committee, called the arrival of private equity chains ‘extremely worrying’. He said: ‘The best way to stop them is to get the NHS dental contract sorted out so dentists get a fair return and patients can get an available service.’
In a report published in April, the committee warned there was ‘no future’ for NHS dentistry without ‘fundamental reform’.
In June, delegates at the UK’s largest gathering of dentists called for an ‘urgent assessment’ of the ‘growing dominance’ of private equity firms.
The Local Dental Committees’ conference in Newcastle passed a motion saying: ‘We believe that the interests of private equity providers are rarely aligned with this profession, and there is an urgent need for an assessment of the risk associated with their growing dominance of private and NHS care.’
Insiders said there was concern that other private equity bidders for MyDentist had included TDR Capital, which has been accused of loading firms with debt, and Cinven, which was fined three times for price fixing on NHS drugs.
Dentists are also concerned that ‘efficiency savings’ typically sought by private equity groups risk ‘a clear and present danger to the delivery of ongoing care’.
Dr John Puntis, a retired consultant paediatrician and co-chair of Keep Our NHS Public, said: ‘Since the disastrous dental contract under New Labour, many dentists found practices financially unviable, opening up a vacuum increasingly filled by private companies.
‘Meanwhile, more dental deserts have been created where people can no longer find an NHS dentist.
‘Reports of ‘do it yourself’ dentistry have become increasingly common, and cases of oral cancer have also risen as routine dental checks on the NHS have fallen.
‘Private dentistry is beyond the means of many, with poor oral health strongly associated with low income and deprivation. What is needed is a commitment from Government to bring dentistry back into the NHS, adequate funding, and a new contract for NHS dentists that is financially fair and focused on prevention.
‘Were this to happen, the growth of private equity firms would shrink greatly and oral health would improve.’
In May, the British Dental Association warned MPs that NHS dentistry faced an ‘existential threat’. In a paper presented to Parliament, it said while the number of qualified dentists was at a record high, there were ‘only enough dentistry commissioned for half the population’.
It said: ‘We are seeing a return of scenes that belong in the Victorian era, with new polling from Ipsos indicating that of those unable to secure an NHS dental appointment a quarter resort to DIY dentistry, with almost 1 in 5 seeking help abroad.’
Chairman Eddie Crouch said: ‘As we see more churn in the financing of these big chains it is more important than ever that the interests of patients remain at the forefront of care rather than a quick return on investment, whether in NHS or private provision.’
MyDentist, previously owned by Palamon Capital Partners, last year saw turnover rise £39 million to £573 million and its profit before interest and tax rise 14 per cent from £73 million to £84 million.
The company’s debt rose from £328 million to £362 million, with interest payments eating into its profits, which fell from £16 million to £6 million.
Though MyDentist’s accounts boast of attracting 22.5 per cent more NHS patients, the amount of NHS work fell in monetary value from £313 million to £301 million between 2023 and 2024. Profit growth mostly came from a boom in private treatment, which grew from £221 million to £272 million.
Alan Milburn is paid for corporate advice via his consultancy firm AM Strategy, with he and his family having received dividends of more than £5 million between 2017 and 2023, according to Companies House records. The most recent accounts for the 12 months to March last year showed the company’s assets had grown from £5.3 million to £6.2 million.
As well as Bridgepoint, the former New Labour politician has been a longstanding advisor to consultancy PwC’s health practice, confectionery giant Mars and US healthcare firm Centene Corporation. An MP until 2010, he received £25,000 a year to sit on the board of Lloyds Pharmacy, and £20,000 a year on the advisory board of PepsiCo UK, according to the register of members’ interests.
After My Dentist, the second biggest chain – all of which offer NHS treatments – is Bupa, with 389 practices. Last year, the firm’s overall pre-tax profits soared 72 per cent from £564 million to £972 million. The company is due to announce its latest half-yearly results on Thursday.
Next is Portman Dentex, with 384 practices. It is owned by Belgian-based Core Equity Holdings, which has a linked firm in the Cayman Islands. Its accounts for the year to September 2024 show turnover up 37 per cent from £436 million to £597 million, driven largely by a growth in private treatment from £310 million to £438 million. NHS turnover grew from £81 million to £97 million.
Portman Dentex’s profit before interest and tax rose from £53million to £91 million. But borrowings rose from £778 million to £883 million, and the firm – which is eyeing a ‘pipeline of future acquisitions’ – made an overall loss of £82 million in 2023 and £72 million in 2024.
Smaller rival Rodericks, owned by London-based private equity firm CapVest, which has offices in Luxembourg, ran 165 practices last year and boasted of a ‘focus on delivering NHS contracts and increased private dental treatments’. Its most recent accounts show turnover up £3 million to £82 million in the year to March 2023.
The arrival of big business followed New Labour’s controversial 2006 dental contract. While dentists were previously reimbursed for individual treatments, the payment system changed so fees were offered for ‘units of dental activity’ covering types of work.
Critics say the move meant individual dentists were left underpaid, receiving a standardised fee for both simple and more complex treatments, prompting an exodus from the NHS. Big chains were attracted because they could provide large volumes of work.
Health Secretary Wes Streeting has promised to reform the dental contract. At present, there is no regulatory structure or form of risk assessment for corporate entities buying into dentistry – other than competition rules.
A Department of Health and Social Care spokesperson said: ‘We inherited a broken NHS dental system and have already begun fixing it – rolling out 700,000 urgent appointments – and our ten-year health plan will fix the foundations of NHS dentistry.
‘Reforms to the dental contract will prioritise those with urgent and complex needs, with new measures for those with extreme tooth decay and gum disease.
‘We are also committed to ensuring NHS-trained dentists stay in the system for at least the minimum period and all dentists – NHS or private – are registered and regulated by the General Dental Council to ensure patient safety.’
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