Financial survey offers ‘patchy’ snapshot


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Only 38 pharmacies completed the financial survey associated with the King Review, a new report has found

The Financial Survey has found that most city pharmacies are paying at least $40,000 in rent, while some owners, particularly outside metropolitan areas, are taking home a salary of less than $40,000.

The pharmacy financial survey faced “unforeseen challenges” which resulted in it falling far short of the hoped-for n=300, according to a report on its results.

The Review of Pharmacy Remuneration and Regulation has released four reports on the external advice provided to it by consultancies.

These include a report on the controversial Pharmacy Financial Survey; the Financial Analysis of Pharmacy Remuneration and Regulation; and Quantitative and Qualitative Research Findings, which covers consumer market research into attitudes, expectations and experiences of consumers interacting with community pharmacy.

For the financial survey, a sample of more than 1,260 pharmacies were randomly selected – excluding dispensing physicians and hospital pharmacies – and stratified by PhARIA band to be representative of the split in the total pharmacy population. A further 49 pharmacies opted in to be sent the survey.

It was hoped that assuming a 20% response rate – which the report says “is often achieved from engaged audiences in business surveys” – 300 completed surveys would be produced.

But there were several barriers to participation in the survey, not the least of which was concern expressed by the Guild that there was a conflict of interest involved.

“It was originally planned that pharmacy engagement in the survey would be boosted by obtaining cooperation from the Pharmacy Guild of Australia and specific pharmacy banner groups, which could encourage their members to complete the survey,” the new report says.

“In practice, the Department found it difficult to engage with these organisations and to garner support for the survey – in fact, a number of these groups specifically encouraged their members not to complete the survey – which was detrimental to the achievement of the desired response rate. 

“These organisations were concerned that information pharmacies provided in the survey might feed into Review recommendations that might not be in the best interests of their members.”

The Guild has recently been strongly criticised in mainstream media for warning its members to be wary of the survey.

A spokesperson for the Pharmacy Guild today said the Guild highlighted to the Review some fundamental flaws in their survey but the Review did not rectify them. 

“In the circumstances the Guild had little option but to alert members of its concerns,” the spokesperson said.

“The poor response highlights the concerns expressed by the Guild over the process, the method of collecting data and absence of methodology for the analysis of the data.”

Despite its time frame being extended, 144 pharmacies began the survey, and only 38 completed it to the final question. Many participants completed some questions such as the profiling section, but not others.

The small sample size achieved, and the patchy nature of information provided by those that only completed part of the survey, means the data set cannot be taken to be a rigorous, representative sample of pharmacies,says the report, adding that the data should be treated with caution.

Analysis of PBS data held by the Department of Health was carried out for only 28 pharmacies that gave permission for their PBS data to be linked to survey responses.

Over the 2015-16 financial year across all the participating pharmacies, the lowest number of scripts dispensed was 168, whilst the highest was 128,476.

The number of PBS scripts dispensed declined the further out from a major city the pharmacy was. Rural and remote pharmacies were found to be more dependent on this support than their regional and city counterparts.

Also among the survey’s findings were:

  • Pharmacies which provided data were most commonly positioned along shopping strips or in isolated groups of a few shops;
  • The majority were open for less than 50 hours a week, with very few offering evening or night opening hours;
  • The majority of participating pharmacies had one owner, particularly among PhARIA 4-6 stores;
  • Most pharmacies had between one and five full-time staff and about two-thirds also had part-time or casual staff – and there was a relationship between PhARIA location and staffing levels;
  • Annual sales in excess of $1 million were more common for city pharmacies, though some PhARIA 4-6 pharmacies did supplement sales with income from other sources moving them up past $1 million total revenue;
  • Virtually no rural or remote pharmacies reported a profit of more than $200,000, compared to half of major city pharmacies, which achieved at least this level of profit;
  • Of all Government-supported services, DAAs contributed the most in terms of remuneration;
  • The most common allowance or support payment was the Rural Pharmacy Maintenance Allowance;
  • A third of pharmacies provided pharmaceutical services to nursing homes;
  • Most pharmacies in major cities were spending at least $40,000 a year in rent alone;
  • Nearly all major city pharmacies dealt with two or more suppliers, while more than half of PhARIA 4-6 pharmacies dealt only with a single supplier;
  • Owner salaries varied widely, from a “significant minority” earning more than $100,000, all the way down to less than $40,000.

Review Chair Professor Stephen King said that the Panel encourages pharmacists to engage with their representative bodies or provide written submissions to ensure their views on the reform options were conveyed to the Panel.

Written submissions can be made to the Panel through the Department’s Consultation Hub via the Review website and may be lodged up to 23 July 2017.

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