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November 2010

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NEWSLETTER – NOVEMBER 2010

Dear Clients, colleagues & friends

Well the big news is that the dispensing fee has finally made its appearance, with all the errors corrected and all the court actions done and dusted. This is the beginning of a long road forward as we negotiate with the third party payers (the medical aid schemes) what they are prepared to pay us. Cheek of it, telling me what they will pay me for your medicine when you are the customer / member and you pay them a membership fee. No discussion here of the huge profits that medical schemes make and the annual subscription increases that are way above the CPIX ,  not to mention the huge salary increases that the CEO’s and his mates all get annually .

At issue is what we will be charging because the fee as published is a maximum fee. In our industry we have had a host of charlatans and “con” artists over the years who supposedly have discounted  prices by creating the impression of being “cheaper” than their competitors.

The “dispensing” fee as it is currently described is a misnomer. In the old days one was entitled to charge a fee for the interpretation, manipulation and preparation for provision of the medicine, as prescribed by the doctor to the patient. This was called the dispensing fee and we were paid the handsome sum of R 1.30. That’s right , ZAR 1.30. The cost of carrying the medicine on the shelf was a mark up of 50% .

The new fee, called the dispensing fee, takes all the operating costs of running a dispensary only  into account. No other costs eg the running and providing of goods for sale in the front of the dispensary (front shop), are ascribed to the dispensing fee component .

The “single exit price”(SEP)  ie the price at which we acquire the medicine from our suppliers, is not permitted to be marked up by any percentage at all, except as prescribed in the dispensing fee regulations .

During the time whilst we have been waiting for the pricing fee to be determined the price of medicine, as a part of the total health bill , has come down by nearly 19% in community pharmacy. During that time, since 2004,  the dispensing fee has not escalated  at the same rate as the CPIX. In fact it has not risen at all. What has risen is the SEP, which the manufacturer charges us! And the Board of Healthcare Funders (BHF) are telling the medical schemes to negotiate the price down even further. I wonder who the CEO of the BHF thinks will service the members of those medical schemes in the rural areas in particular? By the way the CEO of the BHF sits on the Pricing Commission! Is this an independent mind applying itself to the problem? 

So, is it good  or bad ?

So far, in all the confusion, uncertainty and the court rooms, 600 pharmacies have been forced  to close  due to financial pressure. All this while government wants affordable, accessible and quality care for the people. There is just no human capital or  civil servant capacity to make this work. The NHI ( National Health Insurance) is seen to be the panacea by the ANC to heal all? Unless you are a cadre deployed into the money grabbing, tender leeching and corrupt halls of privilege, you will not see this work. The new MOH and his 10 point plan which he  has vowed to start immediately has already been dealt a sucker blow by the Minister of Finance who has said that taxes will not finance NHI. Also quoted was a  senior Director General who said in the Dispatch recently: “we don’t know what NHI will look like, let alone what it will cost”?????  Heaven help us!

At Colletts Pharmacy we will continue to strive to make certain that your medicines remain accessible, affordable and available at all times without, I am sure you do understand, compromising our viability as a business! We will continue to  deliver free of charge, have a personal relationship with you, our patient, try really hard not to have  you to wait for your medicines while we order the stock in, only supply what you need for the month, assist wherever possible to ensure that you are not forced to receive your chronic  medicine, other than the Prescribed Minimum Benefit (PMB), from a courier or mail order distribution business. We have been investigating the issue of medical aids forcing members to get their chronic medicines as well as their PMB medicines from courier/mail services and penalizing the patient  when they choose to use the provider of their choice. There appears to be  a loophole which the medical aids have been exploiting to their advantage. More on this as it unfolds!!!

Our Dilly December Promotion will be augmented by our Monthly Link promotion and we do hope that you will find many valuable offers and savings over the Christmas period.

Finally, as we approach the festive season we urge you to be aware of the traffic on the roads as the “crazy” people hit the roads. To our Matrics, all the very best as you await your results and I do hope that they will be what you want them to be!

Yours in health,
Taki

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