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REVEALED: Funding plans could increase multiples' dominance

DH: Practice and establishment payments encourage pharmacies to cluster in certain areas

The DH recognises its cuts could lead to larger pharmacy businesses dominating the sector, it says in negotiation papers with PSNC

The government has admitted that its planned changes to the sector's funding could "increase the dominance" of larger pharmacy businesses.

This information appears in a set of papers published by the Pharmaceutical Services Negotiating Committee (PSNC), which give more details about the government’s plan to introduce a £170 million pharmacy funding cut later this year.

The Department of Health’s (DH) source papers were originally shared with PSNC on a confidential basis in February to inform initial discussions about the cuts, the negotiator said last week (April 22).

The papers are now “historic”, but provide “useful context” for pharmacists ahead of a stakeholder event on the cuts consultation being held today (April 28), it added.

Here’s C+D's pick of what we learned from the documents.


1. The DH recognises large chains could dominate the sector after the cuts

Although the government predicts that up to a quarter of English pharmacies could close due to the cuts, it is proposing a pharmacy access scheme to ensure “geographically important” pharmacies are not forced to shut their doors.

Several aspects of the scheme need “further analysis and consideration”, the DH admitted. This includes the risk that pharmacies that qualify for continued government funding could be sold at a “premium” to larger pharmacy businesses, “increasing their dominance of the sector”.

The DH says it cannot predict which pharmacies will qualify for the scheme, but a national formula will be developed to help choose them, taking factors such as local population age and mortality ratios into account.

 

2. It thinks current pharmacy funding encourages “clustering”…

According to the DH, several pharmacies can be found along a single high street or “clustered” around GP surgeries, because establishment payments encourage pharmacy businesses to dispense “relatively low” volumes of prescriptions.

The DH argues that contractors can maximise their funding by owning several low-volume pharmacies – which are each paid an establishment payment – as opposed to one pharmacy dispensing many prescriptions.

 

3. …and offers no incentive to provide a quality service

The DH believes that establishment and practice payments “arguably” create no incentive for pharmacists to improve the service they offer patients, other than how quickly they dispense prescriptions.

The current funding model may also create a “conflict of interest” with pharmacists’ professional responsibilities, because the payments encourage prescriptions to be dispensed, regardless of whether the patient needs them, it added.

To combat this, and to encourage “efficient” pharmacies, the DH will scrap establishment payments – as well as practice payments, and funding for the electronic prescription service (EPS), repeat dispensing and dispensing fees  to be replaced with a new single activity fee paid for each item dispensed.

 

4. Year one of the pharmacy integration fund will develop the sector’s infrastructure

The DH is proposing pumping £100m into the sector by 2020-21, as part of a pharmacy integration fund to “drive the transformation” of community pharmacy.

Some £20m of this sum is to be spent in 2016-17 on areas including: developing commissioning guidance to support local commissioning of services; commissioning workforce development for the whole pharmacy team; and establishing medicines optimisation within the pharmacy contract’s terms of service.

 



What do you think about the government's plans for pharmacy?

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13 Comments

Chandra Nathwani, Community pharmacist

Why is no-one making the point that the practice payment and the establishment payment are a result of historic negotiations to address "front loading" and "back loading" issues prior to its introduction. It is a way to distribute the Global Sum and to recognise basic inherent cost of running a pharmacy. It does not however mean that this is EXTRA! funding. It can be changed to preserve the Global Sum.  If the practice payments or the establishment payments encourage clustering then change the mechanism for sharing the cake (no icing left!) rather than withdraw funding per sae. The removal of funding only suggests austerity.

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I knew years ago that independent community pharmacies have had it. It was glossed over with positive words. New schemes. New buzz words, like PGD's. But it's all about the big BOys and dispensing warehouses. 

I'm part of one of our several trade bodies, and I can say with confidence that we knew about the pressurses pharmacists are facing to 'claim mur's through the till' or face devestating consequenses when this association was hand in hand with the big BOys, but it had to be ignored; my bonuses depended on it.

I would hear pharmacists complain all the time that they are being faced with all manner of discipinary action for not doing 5 murs a day. Pharmacists have a strong sense of right and wrong, and they would feel terrible for ripping off the nhs. One said in her professional opinion, she knows not a single mur they had done all month had benefitted a single patient. Yet they still had to do them, and I for one encouraged them to just do them. Patient consent? Dont bother, just tell them they 'need' to have a chat with you because their doctor asked that you do. Patient still says no? Just fill out the form as if you did have a chat with them then. And yes, you can claim the $.

The Gphc is a spineless organisation which is only there to further harass hardworking pharmacists off the register, in the interests of the 'public'. A patient you have never seen before complains that you didnt give them an emergency supply. i.e. give them POM's without a prescription. Strike-off. The are not able to, nor wish to take action against the big BOys for defrauding the nhs on a wholescale scale - but will be only too happy to strike off a pharmacists for accidently claiming for one too many murs.

The BMA because they are strong and care about their members interests, tells drs to not go to work in protest. Our limp Gphc, would strike you off for taking part in industrial action, because the its in the 'public interest'. They are way too scared to cause a stir, and is much happier turning a blind eye. Case in point: DoH says 'lets cut the budget for pharmacy funding by 6%'. Gphc reply; 'Sure that sounds fair, we are sure you have good reason for it. Is there anything we can help you with?'

Rant over lol - thanks for reading

N A, Non healthcare professional

...more...multiples... :-(

Stephen Eggleston, Community pharmacist

My issue is particularly with No 4 - there is very little commissioning of services so I am uncler how this will benefit pharmacy - unless, of course, that is the point

SydBashford Sold&Retired&DeRegistered, Community pharmacist

"To combat this, and to encourage “efficient” pharmacies, the DH will scrap establishment payments – as well as practice payments, and funding for the electronic prescription service (EPS), repeat dispensing and dispensing fees – to be replaced with a new single activity fee paid for each item dispensed" Genuinly cant see how a single dispensing fee will make any difference if it comes to the same level of the combined average !

 

P M, Community pharmacist

it will favour large dispensing hubs thats how - 

James Spiral, Community pharmacist

The establishment payment wont be part of the new single activity fee, so that's a £25,000 reduction just from that. The new fee will disadvantage lower dispensing pharmacies, which is exactly what it is designed to do.

S Morein, Pharmacy Area manager/ Operations Manager

Simple remove contract limitation. Allow innovative pharmacists to develop and the improved levels of service will quickly redress the balance. The multiples can act with little fear of competition at the moment to the detriment of the patient , the taxpayer and the profession.

M Elnemy, Non healthcare professional

here here........the ppl that voted this down are the greedy contractors who want immunity from competition......

Dave Downham, Manager

I don't get why the large chains would be more likely to spend a premium with the additional funding. Also, I don't get why the practice payment is differentiated from the dispensing fee other than for very small pharmacies and the fact we pay VAT on some of it. In fact, I don't get a lot of this!

P M, Community pharmacist

dont number 2 and 3 contradict each other ?

Barry Pharmacist, Community pharmacist

Yes. Very muddled thinking. No real rationale as described here. I would describe their plans as simply wanting to close smaller pharmacies with less dispensing volume. These are actually the pharmacies that have time to assist patients more. Explain about medicines. Give proper advice. Seems they want a click and supply service. Nothing more.

Harry Tolly, Pharmacist

So the DoH  FINALLY admit that they want large volume pharmacies only. They OMIT to state how workload will be taken into account. AT present one pharmacist in A HUGE PROPORTION of all English pharmacies is clinically checking 500 items DAILY. This workload will thus increase.

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There is no mention of a second pharmacist being mandated via the drug tariff requirments of staffing levels. There is no analysis of increased risks to patients.

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Just who do you believe has the resources to work out mortality rates, levels of deprivation and such like, map them out and then concentrate their resources in that area ??? You guessed it. The large off shore , corporation tax avoiding multiples.

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Its all stitched up. There is a game plan out there to wipe out small independents and let the multiples dominate pharmacy. The DoH is simply continuing its 30 year plan started when control of entry was introduced.

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Does ANYONE seriously believe that the DoH has NOT mapped out pharmacies that are LIKELY to close ? Who the winners and losers are ??? If you believe that then you probably believe in Santa Claus.

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