Getting the right agreement


In the first of a two-part series, Kim Brotherson, Pharmacy 777 Managing Director, looks at the key points we should be focusing on to build a sustainable future for community pharmacy and for patients

As negotiations continue for the 7CPA, there is the potential for world class health outcomes that will benefit of all Australians. However, each policy decision, comes with potential side effects.

Three key areas that must be taken into consideration:

  1. Medicine supply—a core function all pharmacies have in common and that underpins the National Medicines Policy. The combined work of the Pharmacy Guild, other key industry representatives and various federal governments has seen the even distribution of pharmacies across Australia and, importantly, ensured regional Australia is well represented with pharmacy services. This has ensured accessibility to PBS subsidised medications at a known price and in a timely manner to all Australians, no matter where they live.

Beyond the supply of medicines, however, there are two equally important responsibilities pharmacists provide.

  1. Compliance—ensuring the medication is taken correctly for the health and safety of the patient.
  2. Medication outcomes—ensuring prescribed medication delivers the clinical outcomes needed for improved health outcomes as well as the treatment outcomes desired for patients, in a safe and cost effective manner.

It is around points 2 and 3 where the Industry now has two distinct pathway models for community pharmacies—the customer-focused model and the patient-focused model.

Finding the right balance in the 7CPA is critical to ensure the time invested by pharmacists every day on compliance and patient outcomes is not undervalued in its importance.  

Customer-focused business models and patient-focused business models: what’s the difference?

 1/The customer-focused model

The proliferation of the discount business model has grown from the premise that, the more you shop, the more you save. The offering of discount is put in place to increase the basket size and hence make up for the loss in gross profit through the discounting. The pressure is on the business model to sell more with every visit and, consequently, this pressure is also felt on the staff working within these business models.

To win this part of the market (and there can only be one winner), the focus is on keeping wages to a minimum.

As wages must be kept low, the consequence for customers is a compromise to the time a pharmacist can counsel them. Often, the pharmacist does not necessarily interact with the customer, with the primary role being the checking of the medicines. At peak times, the customer can wait for long periods of time due to low staffing levels. Services are often a low priority due to the investment required in training and the pressure to keep wages low. Customers also often self-select products with little to no interaction from trained staff.

With the discount format, customers often visit these pharmacies to purchase medicines in “preparation” for when they may be sick or require certain products. As a result, these large-format stores are seen as alternatives to supermarkets on many products and visited as part of the weekly shopping.

2/ The patient-focused model

With this model, there is a very different approach.

That is, doctors see patients, not customers.

A patient leaving a doctor’s surgery does not turn into a customer when they enter a pharmacy.

Beyond the accurate dispensing of a prescription, an equally important responsibility for pharmacists within this business model is to ensure that every medication dispensed leads to the desired outcome for that patient (which is not a straight forward process).

Consequences of this model include:

  • Wages—higher due to the combination of both investing in training and ensuring that staffing levels cover peak periods without compromising patient outcomes.
  • Services caps and lack of funding—pharmacists within this model view pharmacy health services from the point of view of what outcome can be delivered to the patient as a priority, often resulting in a large investment of time with the patient. This time is often without any remuneration because of the multiple counselling sessions required to deliver the service effectively.

In addition, as the pharmacist’s focus is on health outcomes, terms such as “average sale” and “product basket size” are of no concern, due to their total focus on the quality use of medicines and the health outcomes to be achieved. Also, despite caps on services such as MedsChecks, the patient-focused pharmacist continues to deliver this service, often without the ability to claim remuneration, because it is the right thing to do for that patient.

For the majority of community pharmacists, they recognise that they are the next link in the health chain. They see that they have a responsibility to look after their patients until they return or see their doctor or another appropriate health professional.

7CPA negotiation considerations

While the policies within the next CPA have the potential to provide positive outcomes for all Australians, it is important that, inadvertently, because of a lack of understanding by regulators, there is not a ‘de-professionalisation’ of the pharmacy industry.

That is, professional services funding of compliance and outcomes is a secondary consideration in the negotiations.

It must also be understood that, as with the medical professional, where there are “specialists”, not every professional service will be able to be delivered by every pharmacy.

Significant policy changes need to be thought through to ensure short-term savings do not compromise the ability for our profession to invest capital, grow jobs and continue to deliver a full scope of practice. Innovation requires investment in resources and time.

Next issue – the five key points we need to consider

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