Pharmacy Complete

Pharmacy Cuts

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Planning for a sustainable 2019 and beyond

Everyone who owns or works in a community pharmacy in England is experiencing a very challenging time, both professionally and commercially. The current funding settlement together with reinstatement of the temporarily postponed Category M overspend recovery, creates further cashflow and profitability issues for many owners, particularly independents.

This is on the back of almost three lost years whilst the judicial review of the previously imposed funding settlement was pursued when we were not asking the right questions of the right people to understand where pharmacy could support the struggling NHS and public health systems.

We have written many times about the need to change the contractual framework and the funding formula to incentivise the right behaviours and reward quality delivery through a fairer system that benefits a few and penalises many. However, this will take time as PSNC seeks to rebuild relationships and trust with the NHS and DHSC.

To support pharmacy contractors, Pharmacy Complete has developed a unique Business Development Programme. Planning for Growth enables owners and their managers to take control of their future by developing and then implementing a robust business development plan.

This course, which builds on our Leadership development programmes and the platform of Healthy Living Pharmacy, provides essential business knowledge, skills and tools at a time when community pharmacy can no longer wait for someone else to create their future business model nor be so dependent on the NHS for profitable income.

We have already successfully run workshops for some forward thinking small groups. Whether you are an independent owner, a small or medium sized group, or an LPC looking to support your contractors, the time to act is here and now.

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Pharmacy Complete – enabling pharmacy for a healthier future

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Pharmaceutical Services Report 2017/18

What is it?

NHS Digital have released their latest report on services provided by community pharmacies in England between 2007/08 and 2017/18.

What does it say?

  • The total number of community pharmacy contractors fell by 80 (0.7%) on 2016/17 to 11,619 with the proportion of independents (5 or less pharmacies) remaining at 38%
  • The number of 100 hour contracts fell by 10 to 1,179
  • The number of distance selling pharmacies rose by 29 to 350
  • The total number of prescriptions dispensed in community pharmacies in 2017/18 was 1,013.3 million, a fall of 2.3 million on 2016/17 with the average number of items per pharmacy at 7,267 per month
  • 97.3% of pharmacies provided the Medicines Use Review service (MURs) with the average per pharmacy being 299 which was no improvement on 2016/17
  • 89% of pharmacies provided the New Medicine Service (NMS) with an average of 90 per pharmacy
  • 77% of pharmacies provided the NHS Flu Vaccination service and delivered 1.34 million vaccinations (an average of 150 per participating pharmacy and a 40% increase on 2016/17) to improve the reach of this important protection intervention. This was worth £12.3 million in fees
  • 3,930 pharmacies delivered one or more locally commissioned Enhanced Services, a 3% drop on 2016/17

What does it mean?

  • Its tough out there!
  • The number of pharmacies serving communities are declining, i.e. no longer viable and/or through consolidation
  • The number of DSPs are increasing and the number of items they are delivering are increasing against the normal trend
  • A potential 1.4 million MURs were not completed equivalent to £35 million left on the table, despite the funding cuts, to the detriment of patients and the contractors involved
  • 318 (11%) pharmacies chose not to deliver the NMS
  • 2613 (23%) pharmacies chose not to deliver the NHS Flu Vaccination service. If they all engaged and delivered the 2017 average of 150 vaccinations, this would be mean an additional 391,950 patients would be vaccinated which would be worth £3.6m in fees to those additional pharmacies
  • We could move the flu median up by using the whole pharmacy team to effectively implement and promote the flu service
  • Local services continue to be decommissioned for whatever reason, e.g. funding challenges, poor understanding of commissioners of the benefits of using community pharmacies, poor or inconsistent delivery by some pharmacies

Conclusions?

Community pharmacy’s ‘cheese’ has moved and, in the rapidly changing health and consumer ecosystems in which we operate, we must constantly adapt to remain relevant and compelling to commissioners and consumers of our services. In addition to pursuing an effective contractual framework and new locally commissioned services, we must plan for a sustainable future, embrace the digital healthcare revolution, be more effective at supporting self care and explore opportunities for private services to reduce dependence on  NHS revenue which is declining in value and profitability.

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Beyond the JRs

The Judicial Reviews challenging the cuts have been dismissed. The judge’s view was that they were not unlawful and, in the context of the £22billion funding gap faced by the NHS, the cuts were inevitable. The Department of Health got a rap on the knuckles for poor process and limited disclosure of facts, but the fact is, the cuts are here to stay.

So what does that mean for community pharmacy owners? The pain has already been felt from the initial reduction in fees and the impact that has had on cashflow, but there is another pinch point to come in June which must be planned for. In our Viewpoint item in October 2016 we recommended 10 actions to take on things you can control, those still apply and are even more urgent (see below).

The positive is that over 11,000 pharmacies have engaged with the Quality Payment scheme although we have yet to see the detail. This is a clear signal that the sector is both willing and able to deliver these criteria. We hope that 100% deliver against all 4 of the gateway criteria and the 8 quality criteria by the November 24 claim date. Many pharmacies chose to delay achieving Healthy Living Pharmacy status knowing that they can claim in November; we can help you with that through our Complete HLP suite.

Community pharmacy has long been done to and not shaped its own destiny, either nationally or at individual business level. The time has come to create our own future both professionally and economically. At national level, unity and strong collaborative leadership will be critical if we are to realise the aspirations and opportunities in the Community Pharmacy Forward View, the Murray Review and the subsequent Making it Happen document.

At individual business level, where you are in control, every owner must develop their own plan to create a resilient business. Our 10 recommendations are a great place to start and we can support you in creating that business plan:

1.  Redefine your purpose – what you love doing, what you are good at, what there is a need for and what is more likely to result in generating new profitable income

2.  Engage and settle your team – developed and motivated workforce will be more productive

3.  Now is the time to invest in your people – develop them as Health Champions so that you have the right people doing the right things at the right time

4.  Hold up a mirror to yourself and your business; build on your strengths and minimise your weaknesses

5.  Maximise all current opportunities – focus first on delivering quality MURs, NMS, flu vaccination service (prepare and plan now), the Quality Payment criteria and any locally commissioned services

6.  Look at your OTC business and set short, small growth targets and engage your team in achieving these, rewarding with team incentives

7.  Take a critical look at your community (your market) and consider the health and wellbeing opportunities to grow further

8.  Make a plan and engage your team in the development and implementation of that plan

9.  Fully embrace and implement Healthy Living Pharmacy – this is more than a quality criteria, its a business development model that will differentiate your pharmacy

10. Create an ethos that delivers a high quality customer experience that will build loyalty, footfall, service delivery and transaction value