Salim Jetha, chief executive of independent community pharmacy group Avicenna, tells C+D where there may still be opportunities for profits.
To begin, let me make it clear: the decision to apply for quality payments – the scheme the Department of Health (DH) has set up to give community pharmacies the chance to earn a share of a £75 million funding pot – is voluntary. Contractors are not obliged to apply.
The payments have been introduced by the DH to mitigate the cuts to the pharmacy funding budget in England, and are made according to a points-based system linked to certain requirements, such as healthy living pharmacy accreditation.
My guess is that the average payment will settle at half way between the minimum and maximum amounts – around £9,500 – which will somewhat reduce the pain of the cutbacks the sector is facing.
So it falls to organisations such as the National Pharmacy Association, local pharmaceutical committees, and Avicenna and other support groups, to provide contractors with a helping hand. Here’s my five-point guide:
1: Take a holistic view
Before deciding whether to apply for quality payments, my advice would be to take a holistic review of your business. Look hard at the services you are already providing, as well as those that you’re not, and consider where your effort is best placed to maximise business. It makes sense to work with your team to get your house in order, and to set up solid foundations for the coming year.
2: Fulfil all your current contractual obligations
I strongly feel that you should prioritise your existing contractual obligations. There have been several reports in C+D of NHS England’s regional commissioning bodies clawing back historic payments from community pharmacies, for past services provided. In some cases these fines have reached as much as £15,000, which could seriously impede your business.
Tasks that have been targeted include: failing to complete information governance paperwork; the Community Pharmacy Assurance Framework (which NHS England uses to monitor contractors’ compliance with the terms of the community pharmacy contractual framework); CPD; patient surveys; and the General Pharmaceutical Council’s standards.
Next, look at other services, such as medicines use reviews (MURs) and the new medicine service. These are much more cost-effective for patients and the business.
3: Keep your cash flow in check
Keeping an eye on your cash flow is going to be really critical, especially this February and March, when the cutbacks will begin to hit community pharmacies at the same time as the self-assessment tax.
If you are awarded them, the quality payments will hit your bank at the end of June. In the meantime, there may be other cash flow issues for contractors who have lost out because of delays by Capita – who process payments and paperwork related to community pharmacy, on behalf of NHS England.
I reckon some businesses will suffer negative cash flows as a result, and banks will need to be forewarned. Preventative measures, such as changing your lending terms and informing your bank manager, may help.
4: Take your staff along with you
The biggest cost in running any pharmacy is the staff, whose wages can account for up to 75% of your total running costs. On the other hand, our staff are also our biggest asset in community pharmacy, and at crucial times like this I would not only keep them, but I would also increase their training budget.
In these times of cuts, good areas to invest in your staff are things like training them to handle some dispensary functions, doing some parts of clinical services – such as smoking cessation and screening – administrative work to support your pharmacy’s flu service, brushing up on their knowledge of how to upsell, and giving them the confidence to handle more minor ailments.
In my pharmacy, we have identified training needs, both core and bespoke, to up-skill our team. Now my staff are doing our stop smoking, weight management and blood pressure clinics, as well as part of the health check programme, and are getting training on how to manage repeat prescription requests and basic (patient medication record (PMR) skills.
I find that informed, confident staff allow a pharmacist’s time to be freed up to focus on developing new services, such as travel vaccinations.
During hard times I find it helpful to keep staff in the loop. I had a staff meeting in my pharmacy, and assured my staff that their jobs were safe – but that I would need their support in modifying the pharmacy’s business model more than ever. That assurance really boosted their morale.
Together, my staff and I identified areas where would we could improve our efficiency. By making changes to seemingly little things, such as where we manage the dispensing process, having a PMR terminal on the counter, and the positioning of the telephone and printers.
At the same time, I shared data on our business performance, which is updated constantly. When staff are involved, they feel more motivated to support you and the business – and they should be rewarded if expectations are met.
5: Review your enhanced service offerings
With cuts in public health funding, some services are no longer viable and may have to be stopped. For example, those of you who serve care homes may wish to review how cost effective this service really is.
There’s no easy way to decide which services are most cost-effective. But contractors should consider things like the time the process takes and the staff costs it creates, as well as the cost of any equipment required. Then, compare this to the revenue it makes – the number of prescriptions it generates, multiplied by the £1.13 fee per item. Using these simple calculations can help you determine the profit or loss from a service.
What else can you do?
Personally, the festive break allowed me time to work on regulatory matters – revise my entire set of standard operating procedures, complete my information governance and check all my CPD entries. I also tweaked my accounting system to give me real-time management figures.
It also gave me the headroom to start our patient surveys much earlier, and accelerate our MUR services, without damaging quality. I updated my pharmacy’s details on the NHS Choices website, and reviewed our asthma requirements. I even finished my online training on safeguarding and dementia. Now I need to get my staff to follow suit.
Getting a head start on these administrative tasks has allowed me a better understanding of the operational details required to meet the criteria for quality payments – learning which I’ll share with Avicenna members.