A regional community pharmacist knows 60-day dispensing is ‘fantastic’ for patients. He just doesn’t understand why he is being asked to pay for it.
Tomorrow is 1 September. For some that’s just the start of spring. Up here in my country town it’s day one of the annual Carnival of Flowers. My geraniums are bursting with pride.
But for Andrew Lord, tomorrow is the start of what he believes will be a long, slow-burning financial downturn for him, and perhaps the end of some of his colleagues’ and friends’ businesses.
Because tomorrow is the start of 60-day dispensing and Andrew is a community pharmacist. Actually – full disclosure – he is my community pharmacist.
When Andrew started posting Pharmacy Guild scare campaign flyers about 60-day dispensing on his front counter, I was quick to poke him about it. That was, until I noticed the tears in his eyes. That’s when I decided to sit down for a chat with him.
Why community pharmacy?
Andrew grew up in Chinchilla, about four hours’ drive northwest of Brisbane. He started working in a pharmacy at 14 and watching the impact the pharmacist had on his local community.
“Community pharmacy attracted me because it’s a very easily accessible point for all members of the community. You can literally walk in, get the information and get good information,” he said.
“The job itself I still love at the moment. Every day is different. You always get something new and interesting, and you feel like you’re actually helping and making a difference for people along the way.”
These days he owns his business, Mary’s Pharmacy, in the southern suburbs of Toowoomba, one of Queensland’s largest regional towns with a population around 125,000.
Dispensing makes up about 80% of his revenue, he says. With a relatively small front-of-shop area, Mary’s sells day-to-day essentials and over-the-counter staples, rather than the cosmetic, hair care, skincare and toy ranges that provide big franchise pharmacies with so much of their profit opportunities.
“The majority of the other things we offer we don’t get paid for,” he says. “The time that we spend with patients is tied to the remuneration from the scripts. We do get paid for the half-hour meds check, but they can only be done for one patient once a year.
“Almost everything else has a private cost. Vaccines are regularly done privately at the moment. Flu vaccines are all free.”
Andrew believes he will lose between $200,000 and $300,000 a year because of the 60-day dispensing policy. He probably won’t have to lay off staff, but it has put a brake on plans he had to employ someone else to help ease his load.
“We’re in a lucky position in that the pharmacy itself, with a bit of trimming of fat and manoeuvering, we should be able to keep everyone with the same hours.”
Friends and colleagues are not in such a fortunate position, he says.
“Through covid we all stepped up,” he says. “We offered to do vaccinations and we stayed open. I’ve had covid three times because we were there in the middle of it, every day. And after pushing through that, to be served up with this … it’s a slap in the face.”
To be clear, Andrew knows that 60-day dispensing is “fantastic” for patients.
“That’s not part of the debate,” he insists. “The saving for patients is marvellous. The idea that those savings will come from small businesses like ours, rather than Medicare, is the part that leaves us confused.”
Andrew’s pharmacy is in a Modified Monash 2 area. Under the new Regional Pharmacy Transition Allowance he would be eligible for $52,030 of additional support over the next four years. But read the fine print and the fact is that’s only true for pharmacies with average script volumes equalling dispensing income of under $1 million in the 12 months to 1 April 2023.
That doesn’t apply to Andrew’s business, even though he would consider his business of “just under average size”.
The RPTA is in addition to the recent doubling of the Regional Pharmacy Maintenance Allowance, which came into effect on 1 July, meaning a pharmacy dispensing 50,000 scripts a year will receive additional financial support over the next four years.
Unfortunately for Andrew’s business, that’s only applicable to pharmacies in MM 3-7.
“The crux comes down to the basically how the money moves,” says Andrew.
“We need to buy the medicines first. When that’s dispensed there’s a small percentage we’re given for buying and selling a medicine. And then we’re given the handling fee of up to about the $12 per script.
“With the double dispensing we will spend twice as much money to buy, but the percentage fee stays the same as far as we’re aware. That still hasn’t been 100% confirmed.
“The idea behind the handling fee is that we get paid for the medicine and then most everything else we do is at no charge.”
While he acknowledges that not everyone will take up double dispensing from the get-go, therefore spreading out the financial pain, Andrew has his doubts that the compensation offered by the government will come close to covering the actual costs to pharmacists.
“There’s talk of reinvestment of $1.2 billion. The initial figure was $2.1 billion,” he says. “The Pharmacy Guild had an independent financial review that put that at just over $4 billion.”
It’s the lack of consultation that sticks in Andrew’s craw the most, he says.
Back in June it emerged in Senate estimates hearings that the Pharmacy Guild of Australia broke confidentiality agreements with the DoHAC in the lead-up to the May budget. That, said DoHAC, forced them to announce the policy earlier than they planned to.
At the time Health Minister Mark Butler told the media that the Guild “chose to break their non-disclosure agreement with government prior to the announcement of this policy for their own reasons”.
The Guild denied this and said Mr Butler’s office gave it the green light to communicate the proposed policy to its members.
Andrew says he was in on the Zoom meeting that was supposed to inform Guild members about the Budget plans.
“Nothing came out,” he says. “They said they couldn’t actually tell us anything.”
Andrew says his business will survive. But crucially its value will drop because of double dispensing, he says.
“One of the biggest snags is that businesses were bought based on the value of the business. With a strike of a pen, that value disappears,” he adds.
In other words, if Andrew decided to sell his business post 60-day dispensing, he would lose money on the deal.
“And unfortunately, this does come back to money,” he says.
“I bought the business so I could work the way I wanted to. I did it so I can pay myself and that will happen after I pay off that giant bank loan for buying the business. This is going to slow things down a lot.
“It’s always a dirty conversation. We make money off people being unwell, but it’s a reality. It’s real. And to keep the doors open the business does need to make money.”
Pharmacists like Andrew now have their hopes pinned on the promised scope of practice review — the “Unleashing the potential of our health workforce review”. A recommendation of the Strengthening Medicare Taskforce, this review will be led by Professor Mark Cormack from the ANU.
“That’s where the hope is,” says Andrew. “If we can be able to work at the top of our scope of practice and get paid as a health professional for doing those things, that would be fantastic.”
Until then Andrew is anxious about the state of community pharmacy.
“I still love the profession,” he says. “But there are an awful lot of pharmacists these days who don’t, and that’s a really sad thing to say.”
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