Four trends that will drive future health policy – PGA analysis

A recent bulletin was issued by the Pharmacy Guild of Australia (PGA) that gave an insight into the thinking behind the 7CPA  preparation that will commence shortly.
i2P thought that this would be an excellent point in time to contribute comment in a constructive manner.
Hopefully a “think-tank” process may evolve where input can be archived for all pharmacists to be able to contribute.
In this document i2P comment is recorded in blue text while PGA statements are in brown text.
We have also added a fifth point that relates to Global Pharmacy potential entry, and the political climate for Location Rules and Ownership Rules that were not elaborated on by PGA.
It’s a good starting point and i2P congratulates the PGA for documenting the initial range of discussion points.

Cast your mind forward to 2025. What will community pharmacies look like?

How will their role in the health system evolve? What services will they provide and who will deliver them? How will they be impacted by technology? What will be their sources and mix of funding?

These are the issues the Guild is pondering as we prepare for the Seventh Community Pharmacy Agreement (7CPA) between 2020 and 2025.

Four clear trends are driving health policy in Australia and around the world.

1. Ageing populations

Populations are ageing with people living longer with a range of complex, chronic health conditions.

A growing number of people are on large numbers of medicines often for prolonged periods, making issues of adherence, addiction and pharmacovigilance increasingly important.

Medicines will remain the mainstay of community pharmacies.

But, to remain successful, pharmacies must value-add around their core dispensing role with a greater emphasis on personalised medicine support.

The ageing process is associated with a diminishment of mobility with patients becoming more housebound with each year of ageing.
Pharmacists will need to invest in systems that will enable a patient to be treated “in place”.
No patient wants to leave familiar surroundings in the latter stages of their life but increasingly pressures on family members to provide care to that patient, no matter how loved, at some point more institutional care has to be instigated.
i2P has long advocated a “Pharmacy-in-the-Home” program that would have the following characteristics:
The creation of a new employee within a community pharmacy  infrastructure is required – that of a clinical assistant.
Clinical assistants should have a good background in dispensing and the clinical care requirements for patients with chronic illness.
They will also need to be trained in different technologies and be able to document interaction with patients in electronic systems that would require pharmacist supervision and sign-off.
Systems of telehealth would be a feature of this service so that a clinical assistant can communicate with a pharmacist to manage any face-to-face contact with a housebound patient.
Being able to see the pharmacist a patient will engage with more trust.
A simple Skype-connected tablet device would provide portability and reasonable image quality.
Connection with the Internet can be provided with mobile technology within the tablet device, or by using the “hot spot” connection within a mobile smart phone.
Pharmacists engaging with patients in this manner will be able to identify simple ailments e.g. skin disorders.
There are also electronic hubs that can interface with equipment that can communicate by Wi-Fi which establishes a point for collaboration with community nurses, also treating GP’s.
There is also a specialty in anti-ageing that deals with clinical nutrients.
This specialty is a valid activity for clinical pharmacists and there is a core group of pharmacists that have been trained in advanced clinical nutrition (trained at the now defunct Guild College of Advanced Clinical Nutrition.
This resource would have been an ideal resource for pharmacists to transition to anti-ageing medicine.
You would not have to be a genius to know that we were going to have an explosion in aged patients with chronic illness, so the decision to close the College has never made sense.

2. Health costs

Government and non-government funders are driven by the need to curtail rising health costs by rationing access, increasing patient contributions and demanding greater efficiency and better outcomes from health providers.

The Federal Government will continue driving the hardest possible bargain on new medicine listings and the pricing of generics, with the PBS increasingly becoming a safety net for concession card holders and for high cost drugs.

Going forward, relying on government funding for dispensing alone will be insufficient to sustain a profitable pharmacy.

New integrated care models for high cost patients will encourage and reward health providers who take responsibility as part of a patient’s care team for delivering measurable health outcomes.

Community pharmacies must diversify their revenue base by seeking out new sources of funding that will enable them to play an enhanced role in the primary health and community care spaces.

Since the early 1950”s community pharmacy has increasingly relied on government funding as a primary source of income.
The upshot of this reliance on government is that it virtually owns the dispensing market in pharmacies, because market share has become so high for PBS dispensing.
Thus control of the script market has passed from pharmacists to government bureaucrats.
i2P has previously advised that PBS as a product reached the end of its life cycle in 2012 and is simply now a fully commoditised “loss leader” for community pharmacy
There is a private market that can be developed but we are yet to see an impetus from pharmacy leaders to promote this segment.
Some pharmacists have turned back to their origins and have begun to develop a compounding specialist market which creates a channel for creative prescribers to link into.
There is also an opportunity to jointly invest in approved laboratories that can actually manufacture basic compounds for retail by pharmacies.
This is another method of improving gross profit and developing a local brand that extends value to existing pharmacy brands.

Medical marijuana is one substance that holds the promise of being able to treat many chronic conditions and would suit a compounding laboratory environment where a blend of THC/CBD compounds can be produced and tailored to a particular patient.
Pain management has already proven successful through using natural and standardised forms of marijuana with drug addiction falling dramatically in areas that have been able to legally have this substance prescribed.
There is also an opportunity to invest in growing crops of marijuana, because demand will progressively increase as will price concurrent with demand.
Controlling your market end-to-end will ensure that you will always be in a position to make your patient supply at an economical price-point.

There is also an integrated market where nutraceuticals can be successfully prescribed by both doctors and pharmacists.
This can include prescribing of S3 medications.
Used correctly, nutraceuticals can reduce drug side-effects, replace nutrient loss induced by drugs , reduce dosage of drugs or even replace drugs completely.
Patients respond to this type of prescribing because they view it less problematical in terms of drug side effect damage, and it is an area that they are able to become involved in terms of taking responsibility for their condition.
Integration actually increases compliance, reduces government costs and drives more effective outcomes.

There is also a need to expand the core business of a community pharmacy to include a range of paid professional services.
While there is a hint of momentum now in this direction, it certainly has a long way to go.
Service development can be stimulated by government fund “seeding” (top-down) the real momentum must come from individual pharmacist design and development (bottom-up).
Because GP’s have now priced their services beyond consumer expectation, there is an opportunity to fill consulting service gaps at a price level acceptable to pharmacy patients.
This activity will be incessantly challenged by doctors and assisted by front organisations such as the Friends of Science in Medicine.
Doctor services will continue to increase in price, so if pharmacy can offer efficient and valued health consultations at a reasonable price, they will win in the market area of minor ailments coupled with an active referral service for more complex patients to health practitioners that can best match the patient’s condition.
Because of cost and the insistence of doctors leading all of primary health care, the cost of programs such as “Patient Homes” will fail long-term.
Pharmacy needs to be positioned as a community triage point for the initial treatment of patients or for referral to a more skilled health practitioner.

3. Consumer empowerment

Consumers are becoming more knowledgeable and less willing to be told how they will look after their own personal health care needs.

Better informed consumers are more mobile and less rusted-on, resulting in more intense competition across the health sector.

Pharmacies that provide quality, value, convenience and personalised care to their patients will be embraced. Those who don’t will become wholly reliant on cost and price as their only differentiator.

Greater consumer empowerment means pharmacies must have a thorough understanding of their patients and be able to demonstrate that they have the capacity to meet their personal health needs.

While consumers are seeking empowerment through independent Internet access, they find they are often obstructed by doctors not willing to answer questions or even look at the research uncovered by a patient.
This does not empower consumers, and they will walk with their feet to health providers who will.
Already the medical practitioners who practice integrative medicine report that patient volume is expanding at a very healthy rate, while the rest of the medical world decry that sales of complementary medicines have now reached approximately 65 percent of Australia’s population.
Consumers really are on the move.
Pharmacy can match consumer need by providing a mentoring service and be ready to interpret research conducted by patients and point them towards a range of information sources.
Drop the interrogation style interview for a softer educative mentoring style.
Adopting that policy will empower the patient and they will increasingly value your knowledge services – and they will pay for them!
This also means that a clinical pharmacist must be available, stationed in the front of the pharmacy to be accessible for interviews.
This will help to empower pharmacy patients who will accept and value your input.
Tailoring your infrastructure to service and meet patient demand will be the key to your future success.

4. Technology and data

The final trend is the looming pervasiveness of technology and data in all aspects of the health system.

Health decisions from the macro to the individual patient care level will be increasingly driven by the smart use of data and the technologies that maximise its value.

The unprecedented flow and analysis of patient, population and health financial data will become the dominant determinants of future health reform at all levels, from the development of funding and service delivery models, to evidence-based health solutions and the care of individual patients.

To continue to be successful, pharmacies must embrace and become experts in e-health, tele-health, wearables and remote monitoring devices, and business and health analytics.

Technology already has the power to disrupt entire industries, including pharmacy.
Unless you do your own research into what is happening in pharmacies around the world – or in technology development that can be adapted to pharmacy, you remain vulnerable to a sudden attack on your ability to survive.
And it can happen so quickly!
Your culture must adapt to one of creating projects within your pharmacy that will give you an “edge”.
More a process of incremental small projects that can integrate and become a larger system, to help the health delivery process.
Also, in a marketing sense to ensure that you are seen to have a “point of difference” that can be seen and understood by your patients.
Become a technology “hub” by retailing devices that can support patient health and fitness with supplements like the best nootropics and adapt the “hub” so that clinical pharmacists can tap into this information resource.
That technology is available right now.
Australian pharmacies are losing ground by the day and they are not even aware of it.
Leadership silos and in-fighting, also conflict of interest, characterise the reasons for this fall-behind process.
Individual innovators need to rise up and see the world from a higher vantage point.

5. Global Competitors

i2P has added a fifth dimension to the list prepared by the PGA, but they do seem to have overlooked this very relevant point, because global pharmacy conglomerates have been trying to enter Australia for many years in their quest to own and operate Australian pharmacies.
That government is willing to trade the hard work and investment of their community pharmacists either as a PBS negotiating tool or as a means of reducing their own management ineptitude in developing the national budget.

In the Hawke-Keating years pharmacy was actually offered to Woolworths, but they were unable to match the gross margin levels that could have generated that change.
Strange, isn’t it – community pharmacies were more productive than government thought they were.
The PGA takes comfort in letters of support from a range of political parties given up pre-election.
Would you trust any political promise for any period of time?

In our current situation with an election just finalised, Malcolm Turnbull stood accused of dismantling Medicare and PBS.
There is no doubt there was some truth in that accusation because we had seen the privatisation of Medibank, and a visit to Australia by the Boots conglomerate.
They had already started their process for entry to Australia by striking an alliance with Sigma – firstly to warehouse Boots products exclusively to be on-sold to nominated pharmacy franchises.
A later process would have been to become an equal partner in Sigma wholesalers.
The initial process (product franchise) was designed to raise the profile of the Boots brand, well before a retail entry.
But Boots comes with Patient Benefit Manager companies and Health Insurance companies – the Patient Benefit Manager company being the ideal infrastructure to privatise Medicare and PBS.
Fortunately Malcolm Turnbull was exposed by the opposition sufficiently to affect the election outcome adversely for Malcolm Turnbull.

With a current pharmacy review under way with Stephen King as chairman, it would seem that this committee is now irrelevant.
A global conglomerate would seek to retain Location Rules to maintain an orderly market introduction so the outcome for that system may remain intact.
As far as Ownership Rules are concerned, they also now seem a bit more distant because of the political backlash of the Medicare/PBS privatisation.
It will be a long time before Patient Benefit Managers become acceptable, however pharmacy Ownership Rules will continue to be the mechanism to bully community pharmacists into submission in the 7CPA.
However, there is less value in the government health system and if pharmacists can get off their collective backsides, they may be able to avoid the level of reliance on government control to that of irrelevance.
That is possible.

How will pharmacy look in the future?

The ongoing success of community pharmacy will be underpinned by its two core strengths as trusted medicine experts and highly accessible health destinations.

The successful pharmacy of the future will be less reliant on dispensing alone, but will retain a strong retailing presence that combines products, services and support to deliver holistic health solutions that meet the individual needs of its patients.

It will be intensely patient-focused and integrated with the wider health system; it will have developed new revenue streams from a diversified source of funders and likely specialise in particular areas of medicine or patient care; and it will be data-driven whilst embracing the latest advances in technology.

This is the forward-looking agenda that the Guild is turning its mind to as we prepare for the Seventh Community Pharmacy Agreement.

There is little to take issue with here except to ask:
 How? When? Where? Why? – and will there be an inclusive review at regular intervals to check the overall direction?
Will there be internal collaboration between pharmacy organisations and more importantly, will collaboration extend to include allied health and natural health.

Natural health is expected by the Australian community and pharmacy should have a clear and independent policy that supports views similar to the doctors from the Australian Integrated Medicine Association.
Vested interests are seeking to control pharmacy policy in this area – they should be told to butt out!

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