MediEstates - ASK ANNE: Start early and stay on track to hit next year’s UDA target
ASK ANNE: Start early and stay on track to hit next year’s UDA target

Ask Anne: “Start early and stay on track to hit next year’s UDA target”

We all know that Christmas Day is 25th December, it falls on this day every year, but there is still panic buying right up to the final minute. In the same way every dentist knows that NHS contracts need to be met by 31st March. So why the annual stress around hitting targets? The truth is that most of us work a little better under pressure, but there are a few hints and tips that I’d like to share that might just help avoid dentists and their teams suffering a very stressful final quarter this time next year.

The problem of UDA underperformance is widespread. At the annual LDC conference in August 2017 it was estimated that over one third of NHS practices had missed their UDA target for the Year ending March 17, and widely available statistics report that over a quarter missed by more than the 4% threshold.

One issue is that for many practices, following a high-pressure final quarter, there naturally follows in April, a period of relaxation while everyone takes a breath. But in truth this is the start of the problem. Before you know it, summer is here and with it the holidays and without blinking, hey presto September arrives and already you can be behind. At this point most principals start to push the pedal to the metal and put in place strategies to increase UDA fulfilment.

I cannot underplay the importance of understanding where your practice stands in relation to its UDA target at any particular moment. Practices that have suitable computerised software are, of course, able to track UDAs quite accurately, but the reality is that many simply don’t take even this most basic of measures. Tracking UDAs means that you can see immediately if you are falling behind and take remedial action, such as bringing in an associate or locum, or opening later or on Saturdays for instance.

Every practice has its own contract, with an allocation of UDAs and a baseline contract value. The UK average is around £26 per UDA, but I’ve been in practices where the value is as little as £17 and some where it is as high as £45! But so often we go into an NHS practice knowing it has a contract, but until we sit down with the dentist, we have no idea what it’s worth. Unfortunately, many dentists don’t know the value either. They always know the target itself, but few are aware of the value and this is an important oversight. Dentists need to understand the monetary value and not just the numerical target – in this way you can see exactly what underperformance means in revenue terms.

We see practices that underperform quite regularly, but we always value the practice on the basis that the existing contract will be met in its entirety the following year, unless there are extenuating circumstances, such as a breach notice for example. The reason we do this is that we always look at accounts retrospectively, but it’s our job as valuers to predict the future, and effectively create a forecasted business model, which by definition needs to be based on the total value of the contract offered.

In reality however, missed targets are always reflected in a price reduction because buyers are rightly reluctant to take on outstanding debt. The agreed price will always take into account any clawbacks, and the bigger the liability the more the vendor will lose.

In the last 3 months of a contract, when practices are pushing all the buttons to hit targets, we advise them to do everything possible to get more patients into the practice making sure that all surgeries are working at capacity simultaneously and bringing in extra resource if necessary. Naturally, there is a trade-off in terms of the amount paid to a locum to complete the contract versus the amount of value gained from the UDAs. Making this equation work relies on having knowledge and visibility around the value of the UDA, rather than seeing it only in terms of a target to hit.

So, our advice is always to keep an eye on your numbers, understand the value of each UDA, start in April as you mean to go on, keep up the momentum and monitor progress. In this way you can assure that whenever you come to sell your practice it will have an exemplary UDA record. This will give potential purchasers confidence and belief that the practice can achieve its targets and has a foundation to grow, the result of which is gaining full value for your practice without any ongoing UDA liabilities.
Posted by: Anne Barker on

General Buyer Terms 

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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