Hidden $44m PBS cut: SHPA


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Hospitals will be losing out in the 2019-20 Budget based on a measure relating to pharmacy pricing

A hidden detail of the 2019 Federal Budget will cut funding to the PBS through a reduction in funds being paid to hospitals, warns the Society of Hospital Pharmacists of Australia (SHPA).

The measure, included as part of the Budget section Improving Access to Medicines – supporting community pharmacy, says the Government provide $245 million over five years from 2018-19 to improve consumer access to medicines and support community pharmacies.

This includes $215 million to provide an increase in AHI fees, $15 million in additional CSO payments, and $15 million towards expanding the Dose Administration Aids program and the MedsCheck and Diabetes MedsCheck program.

However hospitals will be losing out as part of the measure, with an embedded clause that says the Government will be aligning public and private hospital pharmacy pricing with the community pharmacy pricing arrangements from 1 July 2019.

SHPA says this measure will slash the mark-up paid to public and private hospitals to support treatment with PBS medicines and medicines safety activities – from 11.1% to 7.52%.

“Information provided by the Department of Health indicates the funding cut will remove $44 million from Australian hospitals annually, the majority from public hospitals,” SHPA Chief Executive Kristin Michaels.

This is essentially cutting millions of dollars from hospital budgets that are used to support the management of PBS medicines to patients being treated after heart attacks, stroke, life-threatening infections and during chemotherapy, says the organisation.

The cuts will potentially put 500 jobs at risk, they add.

“On behalf of our members, SHPA has been speaking to all major parties, however we are yet to see evidence of any measures to reduce the negative impact of these cuts,” says Ms Michaels.

“Rather than quietly cutting funds to the people who are experts in medicine management in acute settings, the government should be increasing support for hospital pharmacies to ensure that, as more and more complex medicines are added to the PBS, they can be used optimally and provided to more patients as effectively as possible.

“The pricing reduction to 7.52% removes funding currently paid to pharmacy departments as part of the Pharmaceutical Reform Agreement, which was implemented to reduce the wastage of scarce primary care resources and support better, patient-centred care,” she says.

“Prior to this agreement between the federal and key state governments, patients were forced to rush to a GP after being discharged from hospital and some went without crucial medicines for days – a situation Australians should not be asked to accept in 2019.

“On behalf of our members, we warn strongly against removing funding that enables medicines to be provided effectively to people leaving hospital after organ transplants and trauma surgery, or following treatment for chronic illnesses such as arthritis and diabetes.”

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8 Comments

  1. What a shame. A step backwards

  2. Jarrod McMaugh
    04/05/2019

    An important point is this paragraph:

    “However hospitals will be losing out as part of the measure, with an embedded clause that says the Government will be aligning public and private hospital pharmacy pricing with the community pharmacy pricing arrangements from 1 July 2019.”

    In other words, community pharmacy had these cuts right from the start, in that community pharmacy was not funded in the same way as hospital departments were for doing the same work. Hospitals then used the extra funds to subsidise services that are supposed to be funded through state hospital funding budgets. The extra funding – if it had been available to community pharmacy all this time – would have allowed community pharmacists to be funded for the services that they currently provide for free…. or more importantly, could be used to also contribute to employment (as SHPA is suggesting occurs in hospital with these funds).

    Pharmacy is a single profession – the remuneration for providing our professional and clinical role should not be determined by the location we practice in. While reducing funding for those roles is not ideal, it SHOULD be equal between settings, and I can’t see the government reversing this decision and then equalizing the payments to provide parity for all pharmacists regardless of the bricks and mortar we practice within.

    • Again, there’s only one treasure chest and everyone wants their hands on it. The profession as a whole, loses as a result.

      “If I’m going down, you’re coming with me”

    • Glen Bayer
      06/05/2019

      Hospital pharmacies don’t get remunerated for dispensing scripts, conducting med reconciliations, performing interventions etc. In other words, community pharmacy didn’t have these cuts right from the start – they were compensated through a variety of other mechanisms as part of the CPA.

      • danguidone
        06/05/2019

        Hospital pharmacies also do not receive dispensing fees other than the markup or broken pack fees etc for PBS dispensing, hence why the markup was set higher originally.

    • Tom Simpson
      06/05/2019

      Pharmacy is a single profession – the remuneration for providing our professional and clinical role should not be determined by the location we practice in. While reducing funding for those roles is not ideal, it SHOULD be equal between settings

      Jarrod, I agree entirely. If the PBS paid all sectors the same for the same medicine and the same activities, then there would be no issue here.

      Hospital PBS pharmacies have always been paid less than community pharmacies; this cut only worsens the disparity.

      At the end of the day, this money goes towards services and medications that we can’t afford for our hospitals not to provide.

  3. Willy the chemist
    06/05/2019

    Equal pay for equal work.
    For example, community pharmacists also don’t get paid equitably for vaccinating.

  4. Michael Khoo
    06/05/2019

    Well, realpolitik often hurts! To be wanting in on CPA negotiations on one hand, then claiming to be somehow apart from community pharmacy on the other smells a little of hypocrisy? And although I do agree that Hospital Pharmacy is quite different, and should have some difference in remuneration to reflect this, the payment for the practice of dispensing should be equal under the PBS. Outpatients can wait hours for a script, with no brand choice, that costs much more than what they pay out in the community. That surely cannot last.

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