RSM Australia has released a paper outlining the impact of 60-day dispensing that will cripple many pharmacies, and questions whether savings will accrue to concession-card holders (PD breaking news).
The impact of the Federal Government's initiative of 60-day dispensing for prescriptions for certain drugs from 01 Sep has the potential to "blow a huge hole in a healthcare system the rest of the world envies", according to RSM Australia's national health leader Peter Saccasan.
"On the Government's own numbers, this measure is saving patients $1.8b, saving the Government $1.2b - and the statement that no Government MP will make is that this entire $3b is coming straight out of the pockets of pharmacy owners, all $3b of it."
Saccasan and RSM's national pharmacy leader Kian Ghahramani's report looks closely at the data and the detail around the Govt announcement, in particular at suggested efficiency savings and the impact of the decision on Australia's 6,000 pharmacies.
"The likely profit loss per pharmacy outlined in our report is more than 50% of net profit and for most pharmacies a loss of over $200,000 when all impacts are considered," Saccasan said.
"Additionally, the cutback in hours and that pharmacists will likely charge for other services to mitigate the profit hit means concession-card holders could be worse off under this proposal.
"Our analysis shows pharmacy staff reductions could be 5,000 employees, and it could be as many as 10,000 employees, based on the assessment that at least 5,000 pharmacies may need to cut one to two staff to go some way towards saving costs in their business," Ghahramani said.
"Many pharmacies may have to cut more: how else do you find over $200,000 in savings?
"This is real money coming out of businesses owned by families who have put their lives, and most likely their homes (to buy the business - just like any other business owner) on the line," Ghahramani said.
The RSM paper outlines how the speed and extent of these changes will cripple pharmacy businesses, with the Health Department itself noting "there will be little time for business owners to transition to other income sources".
Saccasan said the Government's insistence that they are returning efficiencies to pharmacy and that this should overcome all problems is "mischief-making at best and is contributing to an anti-pharmacy sentiment that prevails in some quarters on this issue".
"The 60-day dispensing is being promoted as a cost-of-living measure providing savings to more than six million Australians.
"However, there are many concession-card holders who will not save a cent," Saccasan said.
"Once a concession-card holder hits $262.80, they get free medicine," he shared.
"This 60-day dispensing measure eliminates $43.80 of that spend - however, the safety net has not been changed and according to Federal Health Minister Mark Butler it won't be changed, so concession-card holders who take many medicines a year will still be spending that extra $43.80 before they are eligible for free medicine," Saccasan said.
"The Dept's own analysis projects a loss of $158,000 in the dispensary.
"RSM's data is also showing there will be a 24% drop in store visits and a 22% reduction in script volume.
"We assess lost visits will result in a loss of gross profit of around $39,000 per pharmacy (at least $27,000 lost from sales of general medicines and other retail categories and around $12,000 in lost professional services income), giving a total loss of $197,000.
"Pharmacies make no more than any other small business on the bottom line, and this measure means over 50% loss of profit before they have paid the bank and paid their taxes," Saccasan concluded.
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