rpas conference 7 november 2008 andrew vickerstaff practice manager aultbea & gairloch medical...

RPAS CONFERENCE7 November 2008

Andrew VickerstaffPractice Manager

Aultbea & Gairloch Medical Practice

AGENDA

• Dispensing practices– How many, where?– Comparison of demographics, rurality and deprivation

with Scottish average• Comparing dispensing practices with community

pharmacies– Difference Scotland vs. England– Cost breakdown 2007/08– Trends per item dispensed

• Scottish drug tariff changes

Proportion of Scottish practices that dispenseDispensing practices represent 12% of practices but just 3% of patients in Scotland. Dispensing practices are either small or dispense to just a proportion of their total list.

Source: www.isdscotland.org/GPpracs&pops July 2008

http://www.isdscotland.org/GPpracs&pops

Number of Dispensing Doctor practices in each health board areaDispensing practices are situated around the periphery of Scotland, far from the centres of population in the central belt

3

5

13

57

2

2811

9

10

19 51

11

1


Total 130 dispensing practicesOut of 1,084 Scottish total


Dispensing practice contract typesDispensing practices tend to have GMS contracts with their board where dispensing income accrues to the practice.



Scottish dispensing doctor patient demographyDispensing patients are older on average. The data implies a national average age of 40 years, whereas dispensing patients are on average 43 years old.



Scottish dispensing doctor patient ruralityDispensing patients are much more likely to live in remote and rural areas of Scotland than for the nation as a whole. 85% of dispensing practice patients live in areas classed as rural.



Scottish dispensing doctor patient deprivationDispensing patients are on average very similar in deprivation to the Scotland average. Dispensing patients are much more likely than average to be classified in the middle quintile of deprivation.

Source: www.isdscotland.org/GPpracs&pops July 2008 & SIMD 2006 methodology


AGENDA





Dispensing practices & community pharmacies – England comparisonDispensing practices are twice as important as a proportion of total NHS dispensing activity south of the border.

Source: www.isdscotland.org , www.ppa.org.uk data for year to end March 2008

3.5m

178k

£608m

£36m

http://www.isdscotland.org/

http://www.ppa.org.uk/

Dispensing practices & community pharmacies – England comparisonThe difference between pharmacy and dispensing practice costs is less pronounced in England. Overall costs per patient are lower.

TOTAL COST PER PATIENT

£171.66

£192.30

£173.29

£204.08

£150.00

£160.00

£170.00

£180.00

£190.00

£200.00

£210.00

England Scotland

To

tal c

ost

pe

r p

atie

nt p

er

yea

r

Pharmacy Disp practice

Source: www.isdscotland.org , www.ppa.org.uk data for year to end March 2008


http://www.ppa.org.uk/

NHS Cost per item of drugs dispensedDispensing practices dispense items which are on average more than £2 per item cheaper. This difference is growing as the average price per item has reduced over time.

Source: www.isdscotland.org , 2008/09 Q1 annualised


Dispensing volume per patientDispensing practice patients receive an average of 2 items per year more than community pharmacy patients and this difference has remained as total items dispensed has grown.



NHS cost per patient of drugs dispensedDispensing practices dispense more drugs but they are cheaper so the drug cost per patient overall is less than community pharmacists and reducing.



Dispensing fees per patient servedFees to dispensing practices are higher per patient but have not been growing whereas pharmacist fees have increased to close the gap.

Source: www.isdscotland.org data for year to end March 2008


Dispensing fees including VATThe difference in VAT treatment increases the gap per patient significantly between dispensing doctors and community pharmacies.

£-

£10.00

£20.00

£30.00

£40.00

£50.00

£60.00

£70.00

2004/05 2005/06 2006/07 2007/08 2008/09 Q1

Dis

pen

sin

g f

ees

(in

clu

din

g V

AT

) p

er p

atie

nt

per

yea

r

DISPENSING FEES PER PATIENT INCLUDING VAT

Community pharmacies

Dispensing doctors



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Community Pharmacists Dispensing Doctors

TOTAL FEES 2007/08

VAT

Other

Oncost

Container allowance

Pharmacy only payments

Transitional payments

Dispensing fees

£169.5m £10.1m

Breakdown of feesFees structures reflect the difference between the new community pharmacy contract and dispensing doctor payments (which have not changed since the Red Book).

Source: www.isdscotland.org data for year to end March 2008

Minor ailment scheme, methadone, public health svcs, etc.

Oxygen & adjustments


Total NHS cost per patient servedThe gap is reducing, but dispensing practices are still around £10 more expensive per patient served per year.



Total NHS cost per patient excluding VATTake out VAT, and dispensing doctors are cheaper overall and the gap is widening.


£170.00

£175.00

£180.00

£185.00

£190.00

£195.00

2004/05 2005/06 2006/07 2007/08 2008/09 Q1

Dis

pen

sin

g f

ees (

excl.

VA

T)

per

pat

ien

t p

er

year

TOTAL COST PER PATIENT EXCLUDING VAT

Community pharmacies

Dispensing doctors


AGENDA





Introduction of Category MGeneric drug reimbursement prices in Scotland have plummeted since the adoption of Category M in April 2006. Pharmacy transitional payments compensate them for the effect on their income. Dispensing practice contracts in Scotland have not changed.

Source: www.isdscotland.org , AV analysis

Basket of Category M Products

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Pe

nc

e p

er

pa

ck

Cat M

introduced

Basket includes:

Amlodopine 5 & 10mg

Lisinopril all strengths

Omeprazole caps 5 & 10mg

Simvastatin all strengths


Impact of Category MIn this example, the adoption of Cat M has led to an almost 90% reduction in reimbursement price for amlodopine 10mg tabs x 28. This is not unusual. The equivalent strength of felodopine is not classed in the same category and its price has remained higher & generally more stable.

Source: www.isdscotland.org , AV analysis

Impact of Becoming Cat M

-

200

400

600

800

1,000

1,200

1,400

Pe

nc

e p

er

pa

ck

Felod10mg MR Amlod10mg Cat M

Cat M

introduced


Summary of analysisWhat has lead to the perception of “high cost“ and “perverse incentives” of dispensing practices?

• Dispensing practices differ from community pharmacies– Patients are older and more remote on average. Patient

deprivation is less extreme by standard methods.– Dispense more but cheaper items.– Gap in fees per patient is reducing but payment scales are very

different– Reimbursement of VAT makes dispensing practice more

expensive overall per patient– Dispensing practices are getting cheaper over time, whereas

pharmacy costs continue to grow• Category M has had a huge negative impact on generic drug

reimbursement prices & hence dispensary income

Dispensing doctor contract discussionsHow to address the perceived and real cost differences between pharmacies and dispensing practices.

• VAT reimbursement makes dispensing doctors more expensive– NHS gain is HMRC loss if practices forced to register– Big increase in practice administration costs– Practices lose VAT on drug margin

• BUT dispensing practices have lost out due to Cat M• What do we want?

– Protection from pharmacy encroachment– Income stability

• What could we offer?– Investment in patient services– Adopt a dispensing doctor formulary– Take on pharmacy quality and training standards– Provide local pharmacist services without cost duplication

rpas conference 7 november 2008 andrew vickerstaff practice manager aultbea & gairloch medical...

Documents

agenda dispensing practices

dispensing practice

dispensing income

dispensing services

dispensing doctors

scottish average

scottish total slide

scotland average