Running Your Business
All four one, one four all?
Health is devolved in the UK and while there remains a debate about the merits of that approach, for policy geeks and economists, it presents a natural experiment that allows for comparisons. An opportunity to tease out lessons for adopting the best of the variation while avoiding the worst. Community pharmacy, where the four nations have different deals, is a case in point.
In England, the current Community Pharmacy Contractual Framework (CPCF) began in 2019 and is due to end in 2024, meaning negotiations on a new deal will be a focus for the next two years. In Scotland, the three-year funding deal agreed in 2020 is due to run out next year. The deal in Wales, announced in December 2021, includes funding commitments to 2025. In Northern Ireland, additional funding – of £8 million – was announced for community pharmacy for a new medicines adherence service, but few other details are available yet for a 2022-2025 commissioning plan for the sector.
Who: Are more parties better or worse?
More than two parties adds complexity, not least in who they represent. In England, the current deal was agreed by the Department of Health and Social Care (DHSC), NHS England and NHS Improvement (NHSE&I) and the Pharmaceutical Services Negotiating Committee (PSNC). That means three organisations, although it’s likely that DHSC and NHSE&I sing from the same hymn sheet.
The move to integrated care systems (ICSs) might present an interesting change in dynamic. ICSs should be in place formally, subject to the passage of legislation, in July 2022. The notion is that everything – or at least as much as makes sense – should be locally-led, not just from an NHS perspective but including partners like local authorities and others. Could PSNC find itself sat across from an ICS leader when negotiating the next deal? A local focus might sit better with the community orientation of pharmacy and could be an advantage?
In Scotland, it’s a little simpler with just two parties – Community Pharmacy Scotland and the Scottish Government. It’s the same in Wales and Northern Ireland too.
From the outside, it’s hard to see how the ‘who’ shapes the deals that are agreed, but the personalities at play probably matter more in terms of who really drives the bargain. Some deals come down to phone calls and conversations in corridors, rather than in the negotiating room.
When: Is a longer deal a better deal?
Businesses – and investors in them – take investment decisions that typically require a longer time horizon than that of the minister with responsibility for community pharmacy. How long deals run for is an important feature.
England’s current deal is for five years, Scotland’s for three and the one in Wales has commitments for four financial years. It looks like Northern Ireland will have one for three years too, running from 2022 to 2025. Yet the English, Scottish and Welsh deals have variable components and some of the details emerge late in the day. For example, details for year three of the CPCF in England, covering 2021 to 2022, were published and shared with community pharmacy on 23 August 2021, after the financial year had begun and well into the year to which it related. To be fair, this partly reflects a pandemic impact.
Rather than the headline duration, what matters is that there is sufficient clarity to provide predictability and stability. For community pharmacy, the details of what will shape its income – marginal though changes may be year by year – need to be agreed ahead of the financial year to allow for planning. It’s unreasonable to leave details to be agreed so late in the day. Should future deals feature a timetable that everyone agrees to, and more importantly, a pay for delay penalty for government?
What makes for the best deal?
It’s hard to know which of the deals for community pharmacy is the best because the details differ greatly and it appears the ambitions do too. There is no universal UK service, although the Welsh deal does require all Welsh community pharmacies to offer four priority services from April 2022 (a common ailment service, emergency contraception, emergency medicine supply and seasonal flu vaccination).
On the government side, simple can be better when it comes to administration and that can be a factor when deals are agreed. With a universal offer in place in Wales, it may be easier for the English and the Scots to move in that direction next time around.
All the deals include a dispensing fee, but arguably that’s where the commonality ends. In Scotland, there is a clearer recognition of population with the Pharmaceutical Needs Weighting Payment (PNWP), which adjusts payments according to age and deprivation. Recognising and allowing for the greater effort is likely to be important for ensuring community pharmacies operate in some of the more deprived areas, given the link between deprivation and health. It’s hard to spot such an appealing feature in the other deals. A sense of fairness will come when community pharmacies feel that unavoidable drivers of workload are reflected in the way they are paid.
Each deal has some notion of paying for quality, although it’s often more about paying for process rather than outcome. In England, the Pharmacy Quality Scheme (PQS) covers a range of activity, such as checking patients with diabetes have had their annual foot and eye checks and working with primary care networks (PCNs) on flu vaccination, although that’s come in for criticism because of clawbacks. It’s perverse to penalise community pharmacies for the failures of their PCN to vaccinate the 65 and overs.
Scotland has an example that is more clearly focused on outcomes, with a payment of £35 for recording people who have a 12-week quit date for smoking cessation. Could all the nations do better in setting out deals that really pay for quality?
The Welsh deal has an incentive for efficiency, with funding for automated systems and mention of dispensing robots and ATM-style prescription systems to add extra convenience for patients. Efficiency has to be a watchword in shaping new deals; community pharmacies are at the mercy of the same cost pressures as families in terms of energy price rises, for example.
Incentives recognising the wider impacts of community pharmacy are also in place in Scotland, with payoffs in terms of the medicines bill when community pharmacy can secure the best deal. In contrast to England, there has been a shift away from a generic clawback to a gain sharing approach, with margin from getting the best deal split with the local health board. Money matters, but so does the idea of who gets it and what they do with it.
In addition, encouraging community pharmacies to do the best they can to help keep people well is a feature in the Scottish deal. There’s no gatekeeping in the NHS Pharmacy First service; patients can go straight to their community pharmacy for advice on minor ailments. In England, the power of the NHS Community Pharmacy Consultation Service (CPCS) is diluted, because it relies on referrals from NHS 111 and GP practices and does little to persuade patients that community pharmacy is the best first option for them.
In Wales, there’s a planned shift in the balance of funding, away from dispensing and towards clinical services overall. That’s a strong signal about where both community pharmacy and the government want to see the profession going in the future.
The notion that community pharmacy can become an even bigger part of managing health and help free up the use of NHS care seems less convincing elsewhere, particularly in England.
The focus for many in the sector is the rate of increase in the total amount paid out to community pharmacy across a deal. In Scotland, the deal includes a fixed percentage uplift of 2.5 per cent to the global sum. In Wales, it’s a 2 per cent increase in 2022/23 versus 2021/22. In England, there is a flat allocation of £2.595 billion in each of the five years from 2019/20 through to 2023/24. There’s always going to be the question of whether there should be an uplift, and if so, whether it’s enough. That’s before considering what a dose of inflation might do to the overall picture.
Why are the deals the way they are?
Each party to a deal will hold closely to themselves what they really wanted (and that’s not necessarily what they will say in public either) and what evidence they used to bolster their asks. They will inevitably all differ in their views on how influential they actually were in reaching the deals that are done.
How negotiators get chosen, how they are supported and whether they have generated and drawn upon the best evidence to support their negotiation, and, crucially, whether they are actually good at negotiating, are all open questions.
Do these differences matter? As community pharmacy is the most accessible place for some types of healthcare, surely there should be some basic expectation of what it offers. People cross borders. Community pharmacy can shape health and wellbeing.
There will be differences in the deals that make sense, those that reflect the nature of the people community pharmacies need to serve and the local NHS they need to work with. And differences mean comparisons, the chance to learn, and improvement across nations as well as within them.
There are some elements that apply irrespective of these factors. The deals have to be good for patients, good for the NHS and if we want a thriving, and not just surviving, community pharmacy sector, good for community pharmacy too.
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