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- Issue 81: April 2009
- Issue 80: March 2009
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- Issue 74: August 2008
- Issue 73: July 2008
- Issue 72: June 2008

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A Fractured Pharmacy Profession

Neil Johnston
Management Consultant Perspective

Issue 74: August 2008
Page: 1 of 1 Author's Profile | Send to a Friend | Printer Version
The basic infrastructure of pharmacy is fractured and is causing a major rift among pharmacists.
On one side we have the all-powerful 35 percent represented by pharmacy owners, while on the other side we have the silent 65 percent, majority represented by a mix of individual pharmacists, specialist clinical pharmacists and consultant pharmacists, plus a range of pharmacists providing business services in the management and IT sectors.
There is a spurious argument that all pharmacy services must be managed through a community pharmacy.
Pharmacy owners proclaim that it is their capital that is at risk if pharmacy services are not tied to the PBS, and thus a community pharmacy.


But this ignores the fact that not all pharmacy services need to be tied to dispensing, and that by forcing this viewpoint there is a negative pressure created, inhibiting the people who would research and develop new and expanded pharmacy services, investing their own capital into the process.
The silent 65% are structured as individual employees or as contractors (sole traders or incorporated).
It is the latter group that have ambition and wish to develop their services either in alliance or in competition with community pharmacies. It is the “competition with” bit that scares the community pharmacy sector, and nobody has developed the courage to experiment with an alliance process as a preferred model.
The alliance pathway would create a synergistic partnership that would add value to both sides and provide better returns, simply because the pharmacy proprietor would not have to develop any new services, while the service provider is happy to invest in their own abilities to provide a profit above the level of market value wages.

Because the PGA has excluded all pharmacist businesses except those structured as community pharmacies, it is evident that a new organisation has to evolve to represent the remainder that do not have a voice.
In particular an organisation to fight for a fair share of available funds to service the needs of this pharmacist sector, to develop an income stream that is not directly tied to PBS income and enable a pharmacy practice to be located in a range of settings.

Some young pharmacists have already contacted i2P for advice in this regard and are already drawing up a constitution for their own organisation. The constitution will also create space for pharmacy proprietors who wish to go down an alliance pathway rather than the current “dominant” PGA approach.
We at i2P believe in unity for the profession and we do not wish to see new organisations being formed that simply duplicate the function of another and compete for scarce resources.
But when the dominant organisation (PGA) concentrates the available funds for all pharmacy organisations, this is simply an unfair proposition. Government needs to have a wake up call in this regard given that community pharmacies are failing to deliver even the basic expectations through the PBS.
Community pharmacy might consider what benefit they are receiving from current PGA leadership. There is a lot of rhetoric and bulldust espoused at the top, but very little that is positive has filtered down to the coalface.
Tell me one pharmacy that feels benefit from the so-called PBS reform process, agreed to and signed off by the PGA.
Most pharmacies are shedding staff and beginning to worry about how to pay the bills in the coming months.
And it still remains a fact that the PGA has burdened its members with a myriad of clerical tasks associated with health bureaucracy, rather than patient health, with the former taking up nearly 90 percent of the available time during patient contact. The patient is actually relegated to becoming an interruption to this workflow rather than benefiting from a developing patient/ pharmacist relationship.

But examine the lifestyle of the PGA executive and you might consider that there ought to be a bit more of a “bang for the buck” for the PGA members who are partly supporting this lifestyle through membership fees, along with 10 percent commissions paid for managing government grants.
Nice work if you can get it.

As we have previously pointed out in earlier articles around this subject, a “bottom up” approach is required to solve pharmacy infrastructure problems, rather than the “top down” model that is currently in place.

The new pharmacy organisation proposed above would prefer to evolve as a national organisation, but broken down to semi-autonomous regions, each region approximating a natural catchment, rather than being constrained by boundaries such as state borders.
Much work has yet to be done on establishing the balance of power between regional and national executive.
It is believed that many services are better developed and provided at the regional level in a similar manner that the Divisions of General Practice is structured for doctors.
Local input and management can help to sustain local employment and services suited to a particular region.
Emphasis would be placed on developing research into pharmacy practice if a suitable level of funding can be obtained.
One would like to think that this could be thought of as the “bottom up” component that may work in alliance with a PGA, but for the moment I am not holding my breath.

Company structure would be encouraged for those pharmacists wishing to attract capital from non-pharmacy sources.
Community pharmacies have virtually shot themselves in the foot with the paranoid approach of having only pharmacist directors and shareholders.
This means virtually no exposure to outside capital.
Provided a company has majority directors and shareholders as pharmacists, up to 49% of the control of these companies can be vested in venture capital or other capital source, not tied to pharmacy wholesaler guarantee.

And cross-investment by these companies in each other, could see a national network develop with the financial resources to deliver valued pharmacy services with minimal government intervention and eventually having a structure of a public company.
This leads to an ability to create wealth using the stock exchange.

The past decade has seen the PGA squander most of the opportunities originally envisaged and formulated through the Wilkinson Report.
Pharmacy deregulation is still on the agenda for 2010, yet few have the confidence they have developed a survival strategy leading to a growth strategy.
Pharmacy proprietors need to develop their infrastructure, firstly through acquiring corporate management skills and secondly, to present an infrastructure friendly to professional alliance relationships.
The professionals involved in these relationships need not be pharmacists (they could be nurses, naturopaths or even GP’s), but they should all be balanced to deliver a totally integrated package that provides a pharmaceutically flavoured health system attractive to patients residing within the local regional catchment area.

Pharmacies that foster an image of good management, high-level professional skills and a range of retailing choices will have a sure-fire presentation that will survive.
As an alliance it will be able to deliver all that a single proprietor pharmacy could never hope to achieve.

Any pharmacist who is already involved in a professional service delivery (e.g. providing a locum service, HMR service) or a pharmacy proprietor with an alliance orientation who would like to be involved with the development of a new pharmacy political organisation leading into new investment opportunities should email me at neilj@computachem.com.au to register interest on a confidential basis.


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