Current health minister, Greg Hunt recently renewed government’s support for Medicare and the Pharmaceutical Benefits Scheme (PBS), with its five year guarantee plan that will fund the schemes until 2020. This comes after the rebate freeze debacle and a fairly tumultous few years that saw respective health ministers implement various wide ranging policies.
While some of the policy changes in recent years can be described as well-intentioned, other decisions, such as increasing co-payments while decreasing the overall cost of PBS medicines (which acts as the major source of revenue for pharmacies) served to widen an already deep schism between pharmacists, consumers and successive governments.
While things look more promising, there’s still work to be done
Many pharmacists feel that reforms of pricing policies is long overdue and that ‘price disclosures’ introduced in 2007 has not gone “far enough or fast enough” to ensure transparency. This includes the ‘therapeutic group premium’ policy, which was introduced to rationalize spending on drugs that have the same outcomes as cheaper alternatives, which has been described as fraught with loopholes.
Then there is the issue of improved risk-sharing between government and pharmacists who feel inadequately protected from revenue losses in cases of shortfalls from government. Both parties rely on each other to ensure the supply and distribution of medicine to over 25 million Australians.
During the 2015-16 fiscal year, the government delivered a 2.1 percent shortfall in prescriptions, saving it nearly $500 million in costs. However, this shortfall created a total of $80 million in losses to pharmacies across the country, which led to tensions between government and the Pharmacy Guild with regard to compensation.
The Guild expressed its determination to engage in more discussions with the Turnbull government to ensure that pharmacists are properly protected under revised risk sharing agreements.
Innovation and diversification can help pharmacists become more independent
As the sustainability debate around Australia’s healthcare system continues, many feel that new innovations in medicine can help relieve the $20 billion and $11 billion annual cost of Medicare and PBS respectively. And as life expectancies and population figures go up, the pressure on the system will intensify, magnifying the need for more innovative solutions to healthcare challenges.
One such innovation is the introduction of a real-time monitoring system that will help pharmacists and GPs detect double shopping by patients attempting to get more drugs than what their scripts allow. The system is intended to better regulate access to addictive and often dangerous drugs, while mitigating the financial costs of fraudulent prescriptions to the system.
But innovation also means more independence for pharmacists who often find themselves in the middle of government and big pharma machinations. This, along with increasing competition from big, franchised pharmacy brands are putting community outlets under pressure to diversify and look to new sources of revenue.
According to Good Price executive, Anthony Yap, the expected stall in revenue from PBS payouts will result in pharmacists looking to other revenue opportunities such as retail to attract foot traffic and compete with bigger outlets. “The market has changed more in the past five years than it has in a long time. Competition is intense, pharmacies are evolving their model to become more of a healthcare destination and must evolve to have less dependence on prescription medicine.”
Moving away from a drug dispensing business model might just be the right move for pharmacists looking to diversify. GPs seeking relief from aspects of daily running of a practice would more than welcome a more modernised, health service oriented pharmacist. For example, making flu vaccinations, prescription renewals, blood pressure checks and other services available from pharmacists will streamline daily healthcare services, while allowing pharmacies to broaden their service, while simultaneously alleviating the pressure on GPs.
Need an expert in pharmacy to help your business?
Glen Kanawati has been helping pharmacists and their patients navigate the often uncertain territory that is healthcare for over ten years now. A qualified and registered pharmacist, operating in the Sydney region, Glen makes his services available to pharmacists across the region through years of customer experience, medical knowledge and a people first philosophy. Contact me today.