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Call for government to recognise cross subsidy

Less income; reduced investment

Dr Nick Chapman examines the current situation

7th of October 2009

                       

Dispensing practices are reliant on the income generated by the dispensary. The average dispensing practice is subsidised by 50% from the dispensary. This figure was confirmed by the Dispensing Doctors' Association (DDA) during the Pharmacy White Paper campaign. Without this income stream, there is a real threat to dispensing practices and also to the services they provide.

Dispensing practices tend to be placed in rural areas and often have branch surgeries.

 

There are 4 main income streams into a dispensary. These are as follows:

 

Manufacturers' discount schemes

  • Have been reduced by most of the manufacturers
  • Direct to pharmacy and reduced wholesaler model schemes have changed the level of discount being offered.

Wholesaler discount

  • Again being reduced to well below 11.05 % yet average clawback remains at this level.

Generic re-imbursement

  • Cat M- HUGE impact on income.

Dispensing fee

  • Reduced from 1st October 2009 by up to 9%.

 

New NICE guidelines, focusing on new work and new targets have increased workload- more prescriptions are being generated and processed, yet the harder dispensing doctors are working, the less the fee is per prescription.

 

New work = new money

 

That was the basis of the new GMS contract, yet in dispensing there has been a defined envelope. So for dispensing doctors, despite more administration work and more staff hours, new work does not equal new money- just the same amount spread more thinly.

 

The dispensing fee has been reduced. The GPC has expressed disappointment at the new fee scale and Laurence Buckman is quoted as saying,  "...had the GPC not agreed, the DH would have imposed a much tougher set of financial arrangements which the GPC did not believe was in the best interests of practices." However, neither is what has been agreed. In fact it appears not to have been agreed, or negotiated, but imposed. Perhaps if the other financial arrangements were imposed, the death of rural dispensing practices would just be faster and less cloak and dagger.

 

Is there an appreciation of the percentage of cross subsidy that comes from the dispensary back into GMS? On average it is 50%! The reductions in all these income streams have a cumulative effect and now threaten the viability of dispensing practices. Yet despite this, clawback remains, so that now, with increasing frequency, dispensing doctors are dispensing items to patients at a COST to the practice. Rather than being paid for providing the service to patients, dispensing doctors have to pay to provide it!

 

What is required is fair, adequate reimbursement for the medicines provided with an adequate remuneration package that at least meets the cost of supplying the service to our patients. There also needs to be an appreciation of the cross subsidy from dispensing to of GMS taking place. Economies of scale and the supporting of rural surgeries with branch surgeries must be included in the analysis.

 

Questions       

  1. Is the Department of Health (DH) aware of the impact on rural practices and the community they serve, of the fall in reimbursement?
  2. What is the Government doing to support dispensing practices in the immediate to medium term whilst awaiting the cost analysis due next year?
  3. Does the DH accept that clawback is outdated and needs to be withdrawn?
  4. Will the DH acknowledge that cross subsidy takes place and that without it, practices' viability will be threatened
  5. Would the DH acknowledge that dispensing practices are offering a patient centred, safe, efficient service, hugely valued by their patients, as demonstrated by the recent campaign against regulation changes?

           

 

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