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Consumer group calls for a “fundamental shift” in how pharmacy services are funded

Important questions about the governance of the multi-billion dollar agreement between the Federal Government and Pharmacy Guild of Australia (representing pharmacy owners) are raised in the article below.

Carol Bennett, CEO of the Consumers Health Forum, argues that the Fifth Community Pharmacy Agreement – a $15.4 billion investment by taxpayers over five years – fails to meet accepted governance standards.

When the current agreement ends in 2015, the Government should consider a new funding and governance model which involves all the key stakeholders, she says.

This article was first published Public Administration Today magazine, Issue 34, April – June edition, and is reproduced here with permission.

***

Governance lacking in pharmacy funding

Carol Bennett writes:

The Australasian Council of Auditors General suggests four basic elements of good governance: accountability, participation, predictability and transparency.

The Consumers Health Forum of Australia (CHF) argues that these are lacking in the Fifth Community Pharmacy Agreement, a major health program that involves Government expenditure of $15.4 billion over five years.

Few Australians would doubt the worth of our taxpayer-funded pharmacy scheme. In any publicly funded program, taxpayers have a right to expect the principles of good governance to be applied.

Do they realise pharmacies receive such enormous government funding through a scheme lacking governance standards taken for granted elsewhere?

Since 1990, the Commonwealth Government and the Pharmacy Guild of Australia have entered into Community Pharmacy Agreements. These set out the level of remuneration that pharmacists will receive for dispensing medicines covered by the Pharmaceutical Benefits Scheme (PBS) and the arrangements regulating the location of pharmacists approved to supply these medicines. More recent Agreements have increased in scope to also include provision for professional pharmacy programs and services.

These programs and services are a major feature of the Fifth Community Pharmacy Agreement, which commenced on 1 July 2010. They include medication management programs, research and development, rural programs and Aboriginal and Torres Strait Islander programs. There is also funding to support Pharmacy Practice Incentives, including incentives to provide identified services to consumers.

Community pharmacy plays an essential role in the Australian healthcare system, and health consumers rely on pharmacy services. This is why it’s so important that consumers can have confidence in how pharmacy services are funded –and why we need to see accountability, participation, predictability and transparency as key elements of future funding arrangements for pharmacy.

Each is discussed in more detail below.

Accountability

Accountability for the delivery of programs under the Agreement could be addressed through a rigorous evaluation program, with the results made public. An Evaluation Framework is publicly available, which is a good step towards delivering this accountability, but review of it raises questions about whether the evaluation will provide evidence of whether the Agreement is delivering safe and high quality healthcare and improved health outcomes to consumers.

CHF and a number of other organisations have raised significant concerns about the Evaluation Framework, based on the information currently available:

• There appears to be a lack of engagement planned with key stakeholders in the evaluation of certain elements of the Agreement, particularly in the evaluation of governance arrangements. For example, the list of stakeholders identified for consultation in the evaluation of one of the key governance structures, the Agreement Consultative Committee (ACC), is limited to the Minister for Health and the Government, Department of Health and Ageing executive, the ACC itself and the Guild National Council. All of these are directly involved or have direct links to the ACC.  If it is to be meaningful, evaluation must take the views of other stakeholders into account.

• Timeframes for the evaluation of different components of the Agreement are often unclear. For some areas of the evaluation, there are clear statements around when activities will take place. For others, there is no information regarding when data will be collected, or only vague information that data collection will be ‘ongoing’ with no indication of when collection will commence or end. Others refer to processes that should have been completed prior to the publication of the Evaluation Framework in December 2011 – for example ‘Public consultation process March/April 2011’; ‘Identification of data needs 2011’ –but there is no indication of whether these processes have actually been completed. Also, the Evaluation Framework was not released until a year and a half after the Fifth Community Pharmacy Agreement was signed, well after the implementation of some programs had commenced.

• The scope of many of the evaluation questions outlined in the Framework is too narrow to deliver meaningful outcomes. Vague questions such as ‘To what extent have Fifth Agreement investments delivered the results expected of them?’ are unclear in scope, particularly when the ‘results expected’ are not listed.

• Health and quality use of medicines outcomes are not included as key indicators for evaluation of patient services. Given the significant investment in Community Pharmacy Agreements, there should be a measurable improvement in these areas, and this needs to be addressed in the evaluation.

• There is a lack of consideration of how the Agreement is facilitating community pharmacy’s integration with broader health reform processes. CHF has been told that the Evaluation Framework is intended to be a ‘living document’, and that it is a high level Framework, with additional detail sitting below it.  In the absence of the public availability of that detail, it is difficult to see how the current Framework supports accountability –particularly when there is no indication of whether the evaluation results will be made public.

Participation

With a $15.4 billion agreement, it would be reasonable to expect key stakeholder participation in developing it. But that is not the case.

Community Pharmacy Agreements are negotiated solely between the Government and the Pharmacy Guild. No other stakeholders are invited to the table. This arrangement is written into the legislation under the National Health Act 1953.

The Pharmacy Guild represents pharmacy owners. It does not represent employee pharmacists, who are often the people involved in rolling out programs funded under the Agreement. It does not represent the consumers who ultimately fund the Agreement through their taxes, and will be the beneficiaries if programs are delivered well. There are many other stakeholder organisations that are directly impacted by the Guild-Government Agreement, but nor do they have a seat at the table.

Other stakeholders are also absent from the high-level governance of the Agreement. The Agreement Consultative Committee oversees programs funded under the Agreement, including, but not limited to, their design, business rules, timelines, outcomes and expenditure. These are areas where external stakeholders could add significant value. But the ACC membership is limited to membership from the Pharmacy Guild and the Department of Health and Ageing.

Other stakeholders do get a look-in on the Programs Reference Group. But this is only an advisory body – it does not have any authority to make decisions about program delivery.

Also its terms of reference do not provide any scope for it to provide advice proactively – advice is to be provided ‘when requested’.

Predictability

Until recently, predictability was one area in which the Fifth Community Pharmacy Agreement was doing well. Five-year agreements clearly set out the funding to be provided by government and the programs that would be delivered through community pharmacy. The government has indicated its commitment to maintaining the Fifth Community Pharmacy Agreement for the full five years, in spite of concerns expressed by some stakeholders.

In January 2013, however, the Guild called for a moratorium on the provision of one of the key programs delivered under the latest Agreement – Home Medicines Reviews (HMRs). This call was based on a higher than projected uptake of the HMR Program in the latter months of 2012, resulting in a projected overspend in the program for the 201213 financial year.

The Guild also raised concerns about short timeframes for HMRs and careless behaviour by providers. Australian research, including reviews of the HMR Program itself, clearly indicate that the groups at the highest risk of medication errors and adverse medicine events after discharge from hospital are older people, those taking multiple medications and those taking high-risk medications. HMRs are intended to reduce the risk of these adverse medicine events and errors.

Although the HMR Program is a free consumer service, research has consistently indicated that the community initiated HMRs uptake has remained below the projected use. This is despite the fact that the program has been shown to successfully identify medication-related problems and improve the knowledge and adherence of the consumer to a medication regime.

Previous evaluations of the pharmacy component of the HMR Program commissioned by the Guild have cited a lack of awareness of HMRs among consumers as a key barrier to participation.

More recently, the Guild commissioned Increasing Patient Demand for HMR: A Marketing Plan, outlining a number of detailed strategies to increase patient demand for HMRs.

As recently as 2012, the Guild indicated it hoped to see the number of HMRs delivered under the 5CPA grow substantially.

To date, HMR Program overspend has amounted to $4.2 million, largely as a result of a recent spike in demand. CHF notes that $52.11 million has been allocated for the provision of the HMR Program, much of which has not yet been spent, and argues that it should be considered within the broader context of the $15.4 billion provided to community pharmacists under the 5PCA.

The Fifth Community Pharmacy Agreement provides community pharmacies and pharmacists with $386.14 million in funding for the provision of professional services, with an additional $277 million for programs to support and deliver patient services. This amounts to total funding for programs to deliver professional services over the life of the Agreement of around $663 million.

CHF also notes that the Pharmaceutical Society of Australia (the peak national professional pharmacy organisation representing Australia’s 25,000 pharmacists – which is excluded from the negotiation of the Agreement) has initiated moves to improve the business rules associated with the HMR Program in 2012, and has described the proposed moratorium as unnecessary.

CHF has argued that the HMR Program is not unsustainable. No evidence has been provided to suggest that the program could not be cross-subsidised within the existing parameters of the Fifth Community Pharmacy Agreement. Ongoing delivery of a program that delivers value to consumers – and potentially reduces other health system costs through reductions in adverse medicines events and errors – is the kind of predictability that the Agreement should provide.

Transparency

With all the issues outlined above, it is hardly surprising that transparency is not one of the key strengths of the Agreement. Details are only available at the very highest level about how the $15.4 billion is being spent, and how spending and outcomes are being monitored.

The gaps in the Evaluation Framework outlined above, combined with very little publicly available evaluation data on program delivery under past Agreements, means that Australians can have little confidence this major investment is delivering results. Health consumers have questioned the lack of data on the quality and consistency of health information and services provided by pharmacists through 5CPAprograms. They deserve to know whether the substantial funding that goes into these programs is delivering improvements in healthcare and health outcomes.

Conclusion

The importance of community pharmacy in the Australian health system cannot be questioned. Australians value the central role played by pharmacists in the delivery of primary health services and the provision of health information. CHF does not question the role that pharmacists play or the value that they provide.

But when we are talking about $15.4 billion of public money over five years, it’s reasonable for Australian taxpayers to expect that the basic elements of good governance will be met – accountability, participation, predictability and transparency.

The current Community Pharmacy Agreement ends in 2015. It’s time for Government to consider a fundamental shift in how pharmacy services are funded – with substantial changes to how future agreements are negotiated, delivered and evaluated, or ideally through a new model which involves all the key stakeholders.