Editorial
Welcome to the March edition of i2P – Information to Pharmacists.
You may have noiticed if you receive i2P by email, that we have simplified our mail out presentation.
This was because the code in our earlier version appeared to be too unstable to maintain, hence the simpler presentation.
Columns
Rollo Manning: Pharma-Goss
John Dunlop: Inside NZ
Loretta Marron BSc: Health Watch
Barry Urquhart: Marketing Focus
Harvey Mackay: Strategic Thinking
Mark Neuenschwander: I`ve been thinking about...Recent Comments
Past Editions
Volume 1 Number 1
Volume 1 Number 2
Volume 1 Number 3
Volume 1 Number 4
Volume 1 Number 5
Volume 1 Number 6
Volume 1 Number 7
Volume 2 Number 1
Volume 2 Number 2
Pharma News
Staff Writer: SIGMA Pharmaceuticals suspends share trading before release of revised earnings outlookHospital News
Health Politics
Pat Gallagher: Health Informatics - The State of the Nation
Peter Sayers: The Three-Ring Circus
Dr David More: e-Health IdentifiersEPublications
Picking pockets is pretty tricky. It sure is. So who’s picking whose??
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James Ellerson is passionate about developing primary health care services across the spectrum of all health care practitioners working in a practical alliance, whether in an urbanised or a remote setting. | |
After years of trying unsuccessfully to get pharmacists to use PBS OnLine the Howard government finally capitulated to the Guild’s lobbying.
In January 2007 a 40 cent per script bonus incentive payment for using PBS OnLine was introduced. Within two years the uptake went from 10% to 98%!
An incredible demonstration of how financial incentives can quickly effect change.
Originally opposing the initiative the Guild had proved its point - incentive payments get results.
PBS OnLine was locked in; Medicare Australia was happy and pharmacy owners were delighted with the extra $250 per week on the bottom line for every 625 scripts per week processed.
Pro rata, fully implemented, PBS OnLine was a $65 million initiative.
Yes ‘was’ is correct, because now we learn that the PBS OnLine script incentive will cease when the forthcoming 5th CPA commences on 1 July 2010. $65 million saved per annum; $325 million over 5 years! Is that so?
So Medicare giveth and Medicare taketh away. Have pharmacy owners had their pockets picked? How will they absorb this additional ‘cost’ to their business? Will it flow through to impact the rest of us hard working pharmacy employees? Can our employers guarantee we will not be affected? Or will they pass this increased ‘cost’ on to our customers in some way? In the end, whose pockets will be picked?
Now when Peter Piper picked a peck of pickled peppers …….. ahh, I digress, forgive me, we must move on.
It seems pharmacy owners are not alone. On 22 December the President of the AMA, Dr Andrew Pesce, appealed to Medicare Australia to review its decision to terminate (31 December 2009) the 16 cent ‘incentive’ paid to doctors for processing each Medicare Easyclaim online. Medical groups warned that GPs might abandon the practice of processing Medicare Easyclaims online unless incentive payments were extended.
Medicare Easyclaim is an EFTPOS-enabled electronic claiming channel that enables patients to receive on-the-spot Medicare rebates into their bank accounts without having to visit a Medicare office. Dr Pesce called for the Medicare Easyclaim rebate incentive to be continued to help medical practices cover the administrative costs associated with electronic claiming. In fact he went further by saying, “we are seeking a process that is consistent with the Government’s approach to pharmacies, whereby pharmacies receive a 40 cent payment for each prescription they process using PBS Online”. Whether he was calling for the 16 cent rebate to be increased to 40 cents is now a moot point. He got nothing.
It may be twisted thinking but in all fairness Medicare Australia has acquiesced to the AMA’s request and treated the doctors and pharmacists equally. It has ceased paying incentives to both groups. Now that couldn’t be fairer, could it? Well, it’s not quite fair. Doctors’ incentives got the chop chop on 31 December whilst our lot has been given a six month reprieve until 31 July 2010.
At 16 cents per Easyclaim it is estimated the Medicare Easyclaim incentives could have cost upwards of $30 million per annum; $150 million over 5 years. Stopping both schemes could save around $475 million over 5 years. The government should be very pleased with that.
But let’s put all this in its proper perspective. The government introduced its Medicare Easyclaim incentives in September 2007. By April 2009 only 8,132 medical providers were using the system to process approximately 560,000 services a month. That’s an average of 15 services per provider per week; only 3 per provider per day! Then in May 2009 a Transition Support Package (TSP) was introduced to further assist practices to offset some of the software costs incurred as they converted over to using electronic Medicare claiming. Six months later, by November 2009, 15,440 service providers were using the system. Another demonstration of how financial incentives can quickly effect change. So it’s fair to say that some progress has been made, but there is still a very long way to go. Why then terminate the Medicare Easyclaim incentives and why terminate the TSP only six months after it was introduced?
The government has stated that the benefits for practices and their patients are considerable. Turnaround times for payments are faster and practices no longer need to submit paper forms for bulk bill claims. The patient no longer needs to visit the Medicare office or mail in a form to make a claim. The cumbersome process of lodging a claim against Medicare has been streamlined and Medicare has made a significant leap forward towards eBusiness in becoming a major online claiming and processing centre.
Further, considerable benefits flow through to government in that PBS OnLine and Medicare Easyclaims have enabled Medicare Australia to substantially cut its overheads by shifting onto its customers (pharmacists, doctors and patients) much of the administrative burden and costs involved in providing an online claiming service. As a consequence Medicare Australia has been able to employ less staff (perhaps up to 6,000 fewer staff!) and this has provided a way forward to consolidate its office facilities around Australia. Under the Human Services Minister, Chris Bowen MP, Medicare and Centrelink are now scheduled to be merged into a ‘one-stop’ shop enabling further rationalisation of staff and office facilities. In a business the size of Medicare Australia this shift is one of seismic proportions reducing bureaucratic processes, duplication, and most importantly costs. Streamlined systems, improved efficiency, lower costs, are all an integral part of online claims processing and a high priority goal for Medicare Australia.
The end result of all this is that both pharmacists and medicos are now carrying the burden of these significant savings in administration costs for the government. In effect there has been a substantial cost transfer away from government to its service provider customers. This again begs the question: Whose pockets have been picked?
But is there maybe more to this than meets the eye? Why has Medicare Australia decided to stop PBS Online incentives and Medicare Easyclaim incentives? GFC? Well, let’s face it, the incentives have been effective, they have achieved their purpose, they are no longer relevant.
The Government played hard ball. So too did the Guild. The Guild surrendered on the 40 cent per script incentives and agreed to the dispensing fee being frozen for two years. In exchange the government agreed to retain the community pharmacy location rules and preserve the wholesaler Community Service Obligation. Also, although it has yet to be confirmed at the time of writing, we must assume that pharmacy ownership restrictions will remain with pharmacists.
In mid-January we leant the Guild had clawed back 15 cents per script as an eprescribing incentive to drive the uptake and exchange of scripts electronically. A $24 million initiative per annum; $120 million over 5 years! Should we be thanking the doctors for that? Did they get their pockets picked?
However it has come about we should compliment the Guild - as Oliver’s Fagan would say, the Guild is “Master of the Game”. First the government picks our pockets and the doctors’ pockets. Then the Guild picks the government’s pockets transferring 37% of what we lost back to us as an escript incentive. So, doctors, pharmacists and government have all had their pockets picked. As Fagan said: “You see, Oliver...
In this life, one thing counts
In the bank, large amounts
I'm afraid these don't grow on trees,
You've got to pick-a-pocket or two”.
Now that the protection of the pharmacy owners turf is out of the way (unfortunately John Menadue AO will be disappointed) the next round of negotiations, early in 2010, will focus on the delivery of additional patient-centric services. The Guild has said these will increase in the areas of “Professional Programs, Quality Assurance, Rural Programs and eHealth and strengthen the role of community pharmacy in primary health care in support of the government’s health reform agenda”.
At the 2009 APP Conference last April Kos Sclavos said that “having endorsed eRx Script Exchange its objective was to demonstrate that it works and then to approach government on the issue of ongoing funding”. So it seems a fair bet the Guild will be positioning its eRx system as being pivotal to entrenching the government’s health reforms in place. Last October 5 in the Australian Financial Review he said “We are spending millions on this”.
Can the Guild pick the government’s pockets one more time? Can Kos convince the government to provide the funds to cover the cost of rolling out its eRx system across Australia? And if he can, how much money will eventually flow into the Guild’s coffers as a 50% shareholder in the eRx system?
Surely this is where the PSA should be taking over the lead in the 5th CPA negotiations. Responsibility for Professional Programs, Quality Assurance, Rural Programs and eHealth should lie with the PSA who represent us as professional pharmacists. How much longer should we, as professionals in health service provision, be spoken for by the shop owners?
Peter Piper picked a peck of pickled peppers
A peck of pickled peppers Peter Piper picked.
If Peter Piper picked a peck of pickled peppers,
Where's the peck of pickled peppers Peter Piper picked?
“Elementary my dear Watson”, said Holmes as he lit his pipe. “You will find it secreted away in obscure pockets in the Guild’s bank account”.
“You've got to pick-a-pocket or two”.
Return to home
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