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RPAS CONFERENCE 7 November 2008 Andrew Vickerstaff Practice Manager Aultbea & Gairloch Medical Practice
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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
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Proportion of Scottish practices that dispense Dispensing 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 2008www.isdscotland.org/GPpracs&pops
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Number of Dispensing Doctor practices in each health board area Dispensing practices are situated around the periphery of Scotland, far from the centres of population in the central belt 3 5 13 5 7 2 28 11 9 10 19 5 1 11 1 Source: www.isdscotland.org/GPpracs&pops July 2008www.isdscotland.org/GPpracs&pops Total 130 dispensing practices Out of 1,084 Scottish total
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Dispensing practice contract types Dispensing practices tend to have GMS contracts with their board where dispensing income accrues to the practice. Source: www.isdscotland.org/GPpracs&pops July 2008www.isdscotland.org/GPpracs&pops
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Scottish dispensing doctor patient demography Dispensing patients are older on average. The data implies a national average age of 40 years, whereas dispensing patients are on average 43 years old. Source: www.isdscotland.org/GPpracs&pops July 2008www.isdscotland.org/GPpracs&pops
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Scottish dispensing doctor patient rurality Dispensing 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. Source: www.isdscotland.org/GPpracs&pops July 2008www.isdscotland.org/GPpracs&pops
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Scottish dispensing doctor patient deprivation Dispensing 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 methodologywww.isdscotland.org/GPpracs&pops
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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
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Dispensing practices & community pharmacies Dispensing practices cost NHS Scotland £36m per year. For community pharmacies the figure is over £1bn. Source: www.isdscotland.org data for year to end March 2008www.isdscotland.org Notes: 1. Extracted from isd stats. VAT excluded as tax treatments differ 2. Excludes appliance contractors 3. Dispensing patients provided from CHI extracts to DDA under FOI request. Total patients ex ISD, assumed any patient not with dispensing doctor is served by a community pharmacist. Patients receiving dispensing services from dispensing doctors. Total registered patients with dispensing doctor practices is 278,500
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Dispensing practices & community pharmacies – England comparison Dispensing practices cost DOH £608m per year. For community pharmacies the figure is over £8bn. Source: www.ppa.org.uk, DDA, data for year to end March 2008www.ppa.org.uk
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Dispensing practices & community pharmacies – England comparison Dispensing 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 2008www.isdscotland.orgwww.ppa.org.uk 3.5m 178k £608m £36m
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Dispensing practices & community pharmacies – England comparison The difference between pharmacy and dispensing practice costs is less pronounced in England. Overall costs per patient are lower. Source: www.isdscotland.org, www.ppa.org.uk data for year to end March 2008www.isdscotland.orgwww.ppa.org.uk
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NHS Cost per item of drugs dispensed Dispensing 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 annualisedwww.isdscotland.org
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Dispensing volume per patient Dispensing 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. Source: www.isdscotland.org, 2008/09 Q1 annualisedwww.isdscotland.org
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NHS cost per patient of drugs dispensed Dispensing practices dispense more drugs but they are cheaper so the drug cost per patient overall is less than community pharmacists and reducing. Source: www.isdscotland.org, 2008/09 Q1 annualisedwww.isdscotland.org
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Dispensing fees per patient served Fees 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 2008www.isdscotland.org
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Dispensing fees including VAT The difference in VAT treatment increases the gap per patient significantly between dispensing doctors and community pharmacies. Source: www.isdscotland.org, 2008/09 Q1 annualisedwww.isdscotland.org
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Breakdown of fees Fees 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 2008www.isdscotland.org Minor ailment scheme, methadone, public health svcs, etc. Oxygen & adjustments
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Total NHS cost per patient served The gap is reducing, but dispensing practices are still around £10 more expensive per patient served per year. Source: www.isdscotland.org, 2008/09 Q1 annualisedwww.isdscotland.org
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Total NHS cost per patient excluding VAT Take out VAT, and dispensing doctors are cheaper overall and the gap is widening. Source: www.isdscotland.org, 2008/09 Q1 annualisedwww.isdscotland.org
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NHS cost per dispensing doctor patient Reimbursement of VAT costs around £20 per patient per year to dispensing doctors. Source: www.isdscotland.org data for year to end March 2008www.isdscotland.org
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NHS cost per community pharmacy patient Community pharmacists receive very little VAT reimbursement from the NHS. Source: www.isdscotland.org data for year to end March 2008www.isdscotland.org
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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
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Introduction of Category M Generic 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 analysiswww.isdscotland.org Cat M introduced Basket includes: Amlodopine 5 & 10mg Lisinopril all strengths Omeprazole caps 5 & 10mg Simvastatin all strengths
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Impact of Category M In 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 analysiswww.isdscotland.org Cat M introduced
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Summary of analysis What 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
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Dispensing doctor contract discussions How 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
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