Rural allowances: shooting wide of the target

remote rural regional Australian animals sign

A new funding program for rural, regional and remote pharmacy misses the mark, with pharmacists claiming they are worse off

Just a few days before Christmas 2020, rural, regional and remote pharmacies across Australia received a letter from the Department of Health outlining changes to the Regional Pharmacy Maintenance Allowance (RPMA).

For some, it was welcome news promising thousands of dollars of additional funding they had previously been unable to access. For others, it was a blow, and they entered the new year with the knowledge that thousands of dollars had just been cut from their bottom line.

Health Minister Greg Hunt had signalled the upcoming changes when the 7CPA was signed in June 2020.
Previously known as the Rural Pharmacy Maintenance Allowance, the reimagined RPMA has received a funding boost from the Federal Government, with Minister Hunt announcing an additional $5m per year towards the program—bringing the total funding to $21m per year of the 7CPA.

Alongside the funding boost came a transition from the Pharmacy Accessibility/Remoteness Index (PhARIA) to the Modified Monash Model (MMM) for rural classification from 1 January 2021.

Eligible pharmacies are expected to receive payments between $3000 and $51,328 per year under the new matrix, depending on their remoteness classification and PBS prescription volumes.

The changes have seen more than 400 community pharmacies newly eligible for the scheme, taking the total number of eligible pharmacies to 1215, said Minister Hunt.

Those newly added to the scheme are most likely to be receiving the base allowance of $3000 after being reclassified from PhARIA Category 1 (Highly Accessible) to MM 3 (Inner Regional).

Pharmacy Guild of Australia national president George Tambassis welcomed the increased support for community pharmacy.

“In many small towns across Australia, the local community pharmacy is the only health infrastructure, and it is imperative that appropriate support is given to enable those pharmacies to sustain their service to patients,” said Mr Tambassis.

“Direct contact with a health professional such as a community pharmacist is a benefit that all Australians should be able to have access to, wherever they live.”

Winners and losers

Pharmacist Peter Crothers, who owns and manages a pharmacy in Bourke, NSW, told the AJP that some rural and remote pharmacists are highly concerned about the changes, which kicked in from 1 January.

“There are quite a lot of winners and losers,” said Mr Crothers, a member and representative of the Rural Pharmacy Network Australia (RPNA), about the new program.

“The pattern that is emerging is that the losers are more likely to be in the remote classifications—not necessarily the most remote MMM classification, but certainly the two most remote PhARIA classifications.”

Peter Crothers: “This is an unusual and unacceptable policy outcome”

Mr Crothers said while he is worse off under the changes, what concerns him most is the RPNA has calculated that there are more than 200 pharmacies around the country that are “significantly worse off” under the changes.

Many of these are smaller pharmacies in less accessible rural communities, he said.

“Because they’re small, that means they’re more likely to be highly reliant on the allowance and so it’s going to make a material difference to them,” argued Mr Crothers.

“[It’s] shifting funding away from the pharmacies who need it most, towards the pharmacies who need it least.

“This is an unusual and unacceptable policy outcome for a program whose purpose has always been to ensure that communities that might not otherwise have a pharmacy can actually have a pharmacy.”

Mr Crothers added: “I think the unfortunate thing about it is that there was an expectation from the rhetoric following the 7CPA that no one would be worse off, and a lot of those pharmacies are struggling to see what could possibly offset this loss of income.”

A hit to funding

The local pharmacy in the small town of Merriwa, NSW, is one such business that has been markedly impacted by the changes.

Proprietor Robert Smith said Merriwa Pharmacy has changed from PhARIA 5 (Remote) to MM 5 (Rural).

“That’s resulted in a decrease in the funding to our pharmacy by several thousand dollars,” said Mr Smith, who received the news in an email on Christmas Eve.

“If you lose those sorts of dollars off your bottom line and there’s no way to make it up, then it reduces your ability to employ locums and the like.

“We’ve been paid at that rate for the last 10 years at least. If anything, the operation has become more complex and the way that the community pharmacy is relied on now, with the doctors retreating into telehealth—and often having no doctor at all—often times in rural communities the pharmacy is the only point of contact that people have,” he told the AJP.

“In terms of generally owner-operator businesses, you have to look at your least profitable times, which may then equate to reduced opening hours. For instance, Saturday mornings may be under threat in some instances.

“There should’ve been no disadvantage for anyone already in PhARIA 5, 6 or 7 because we’re talking about the most remote and most vulnerable of the communities. For the most part, in lower turnover, single pharmacy towns, if you take the pharmacy out of a town like that or reduce opening hours, then the whole idea of equal access to medications has evaporated,” he said.

Joanne Loftus, proprietor of Northampton Pharmacy in WA, said her pharmacy also went from PhARIA 5 to MM 5.

“I have been one of those pharmacies that have been detrimentally affected by the changes. What that equates to is a loss of about $7500,” she told the AJP.

“It’s extra stressful because we also recently lost our full-time GP, so the impact of that is a burden that I have to carry as well.

“We already have lost two pharmacies in our Mid West region, one in Mt Magnet and one in Mullewa closed six months ago; they closed because they were considered unviable by the owners and that was before the MMM matrix came in.”

Ms Loftus’ pharmacy is 55km north of Geraldton, a major regional centre in WA.

Meanwhile all 10 pharmacies in Geraldton were reassigned from PhARIA category 1 to MM 3 and will now receive the base allowance of $3000 under the new matrix. Prior to this, they were not entitled to any additional financial support under the RPMA.

“For me and another pharmacy in the Mid West to lose money when we’re a much more vulnerable community, it doesn’t make sense,” she said.

The changes mean Ms Loftus has been forced to change her opening hours to stay viable.

“In terms of being able to employ another staff member, that’s unachievable,” she told the AJP.

“The funding influences my ability to hire a pharmacist and there is also a lack of locum pharmacists in my region which is an entwined issue.

“What that means is the services I offer to my community are going to be reduced. As a single pharmacist, I can’t do blood pressure checks, flu vaccination, wound care on the elderly, sit there and counsel people, because who is going to look after front of shop and medication needs?”

Pharmacy groups weigh in

A spokesperson for the Pharmacy Guild told the AJP the new system is intended to provide greater support for remote, rural and regional pharmacies, so that patients living in those areas have access to pharmacy services and PBS medicines.

“The change from the previous PhARIA rural classification system to the Monash model means approximately 400 additional pharmacies are eligible for support. This is an increase of around 50 per cent in the number of pharmacies being supported,” said the Guild spokesperson.

“No system is perfect, but the Guild believes the additional funding and the transition to the MMM system will provide a fairer and more equitable outcome for pharmacies and patients in remote, rural and regional Australia.

“Where a pharmacy believes it has been disadvantaged through an unintended consequence or an anomaly of the system, that pharmacy can submit an exceptional circumstances request for consideration by the Department of Health.”

However based on Mr Crothers’ understanding, outgoing Guild president Mr Tambassis has taken up their concerns with its Pharmacy Viability Committee, and a senior Guild staffer is now seeking the necessary data from the Department of Health to do a detailed assessment of the impact.

“My understanding is that someone at the Guild is now dealing with it, they’ve put a good person on the case too. And I think that’s good because, I think this has been difficult for a lot of people to process and deal with, and it is quite complex,” he told the AJP.

The PSA has previously stated that while it is supportive of measures that improve workforce challenges and remuneration for pharmacists in regional, rural and remote locations, it remains concerned that there may be some pharmacists worse off under the new requirements.

PSA national president Chris Freeman added: “We encourage pharmacists who believe that there has been significant disadvantage because of the changes to the scheme to reach out to the PSA and the Department of Health through the Pharmacy Programs Administrator to address the issues with the implementation of this change.”

An unintended outcome

More needs to be done to understand the issues that communities face in the bush, said Mr Smith.

“I’m just not confident that the people at the table—the bureaucrats in Canberra or even the Guild negotiators—I don’t think they understand the extent of problems people are facing in the bush.

“For anyone to be taking money away from these communities in the bush is totally the wrong message,” he said.

Mr Crothers stressed that something needs to be done soon to fix the situation. The current payment matrix applies until at least 30 June 2021, so he is hopeful there is a window of opportunity for change.

“Any way you look at it, it’s a stuff up. It’s an unintended outcome, I don’t think anybody intended it to come out like this and I don’t know whether there’s been a miscalculation or the whole process has been caught up in some larger political process,” he said.

But he added, “As it stands at the moment, it’s a problem that has to be fixed. Good intentions aren’t enough. You’ve got to actually deliver the result, we have to get the outcomes that serve the community best.

“That’s what pharmacists do in our daily lives, we serve communities—that’s why we’re called community pharmacists. And that’s what tends to motivate us and what we care about,” said Mr Crothers.

“But we’ve got to get a bit of a hand at doing it, in these situations where you’ve got disadvantaged communities… and all rural communities are disadvantaged.

“I don’t think the Guild can just wave a magic wand and change this; it’s going to be a matter for negotiation. With a tiny amount of goodwill and a tiny amount of imagination, this can
be fixed.”

The old PhARIA payment matrix compared to the new MMM RPMA matrix (source: PPA)

RPMA: the government’s response

The changes to the Regional Pharmacy Maintenance Allowance (RPMA) program mean an additional 400 new pharmacies are now eligible to participate, taking the total number to 1215 of eligible community pharmacies, the federal government says.

A spokesperson for the Minister for Health and Aged Care said: “As part of the Morrison Government’s investment of $100m for regional, rural and remote pharmacies, more than 400 additional pharmacies are now eligible for the Regional Pharmacy Maintenance Allowance (RPMA) with very remote pharmacies receiving significant additional funding to support the supply of medicines and healthcare in their community”.

“This will help ensure all Australians can access the medicines and pharmacy services they need, where and when they need them, and is a key outcome of the Seventh Community Pharmacy Agreement (7CPA) signed with the Pharmacy Guild of Australia in June 2020.

“The changes we proposed and agreed with the [Guild] will ensure that more rural and regional pharmacies are eligible for this important program.

“Community pharmacies play a vital role in providing access to medicines and essential health services for the third of Australians who live in regional, rural and remote areas.”

Dubbo a winner

Previously, federal Regional Health Minister, and Member for Parkes, Mark Coulton said the RPMA changes would help maintain access to medicines and pharmacy services in a town and regional centre such as Dubbo, NSW.

The RPMA, which recently saw the transition from the previous Pharmacy Accessibility Remoteness Index (PhARIA) to the Modified Monash Model (MMM) for rural classification, has drawn significant criticism from some quarters of the pharmacy sector, with the AJP reporting in January that Rural Pharmacy Network Australia spokesperson Peter Crothers said some pharmacies are “significantly worse off” as a result of the change.

A week after this article was published, Mr Coulton said that “Community pharmacies, like [Dubbo’s] Orana Mall Pharmacy, play a vital role delivering medicines and essential health services for the third of Australians who live in regional, rural and remote areas.

“They continue to do a tremendous job supporting the health and wellbeing of regional patients and this is certainly evident during natural disasters and the COVID-19 pandemic.

“The government recognises the importance of maintaining the pharmacy network to provide a steady and reliable supply of medicines and other pharmacy services, in particular to people in the regions.”

A vital support

Co-owner of Orana Mall Pharmacy in Dubbo, Simon Blacker, said the RPMA is a vital support in helping community pharmacies meet the needs of patients in regional, rural and remote areas. Mr Blacker is also the ACT Branch president of the Pharmacy Guild.

Under the 7CPA, “the substantial increase in funding under this important program has resulted in 400 more pharmacies across regional, rural and remote Australia now being eligible for support,” Mr Blacker said.

“This means they can provide more services to patients in these areas, which at times may have been left at a disadvantage compared with urban pharmacies.”

Mr Blacker said the new arrangement brought regional pharmacy classifications in line with the same rurality model used for GPs.

“Overall, this provides a fairer and more equitable outcome for pharmacies and patients in regional, rural and remote Australia, with the potential for further opportunities into the future which would improve health outcomes in these local communities,” he said.

Minister Coulton said the Coalition Government boosted its investment in the RPMA program from $16m per year to $21m per year under the 7CPA. Across regional Australia the RPMA program will support more than 1200 pharmacies, which includes 400 new eligible pharmacies to participate in the program, he said.

A pharmacy WIP is the end game

The overwhelming reason for wanting community pharmacy in a workforce classification like MMM was to make it possible for pharmacists to be included in Commonwealth workforce incentive program (WIP) funding, explained Peter Crothers.

The ultimate goal is for pharmacy leaders “to ensure we get a proper Rural Community Pharmacy Workforce Incentive Program.”

“The Commonwealth runs a WIP for rural GPs,” he said. “Community pharmacy doesn’t have anything like that, we’re just completely left out of the rural workforce game and ironically the reason for shifting from PhARIA to the MMM was to help the Guild and others argue for workforce assistance for pharmacists. But so far nothing’s happened.”

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