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Proposal to Temporarily Suspend the Issuing of Funding Agreements for New Community Pharmacies -
Consultation Document

Background

Counties Manukau District Health Board (CMDHB) is intending to develop a policy for access to funding agreements for provision of community pharmacy services within its district.  The rationale for developing a policy is as follows:

1.    Historically, any pharmacy that has obtained an operating licence from Medsafe has been given a funding agreement by CMDHB.

2.     Since July 2009 there has been significant growth in the number of new pharmacies in Counties Manukau. There is no obvious link between these new pharmacies and population growth, established need,  or service innovation and there is no evidence that the establishment of new pharmacies has improved service access or the capacity and capability of community pharmacy to deliver better quality professional care or improved health outcomes. There is some evidence that the growth in new pharmacy businesses is affecting the ongoing sustainability of the community pharmacy business model, and is associated with unsustainable growth in dispensing volumes through overuse of close control and a decline in medicine management services at a time when there is a national drive to enhance the role of community pharmacists in improving therapeutic outcomes.

3.     CMDHB envisions a locality approach to health system delivery that better co-ordinates and integrates hospital, primary healthcare, community and public health services at the locality level and ultimately places local communities at the heart of health service planning and delivery.   Targeting our efforts at a locality level will also mean that resources can be targeted to those areas with the poorest health. Organising primary care, secondary care, and other health providers around the same local populations will greatly assist integration of services for patients. Community pharmacy is a key provider within any integrated community health service and should be part of a planned approach to service development.

4.     CMDHB wishes to fund community pharmacy services that align with its strategy for community health service delivery, that enable system, quality and safety improvements and positively impact on people in priority areas. This requires pharmacy service providers that have the capacity and capability to deliver new and improved services, providers whose services are coordinated with other primary care providers and providers who are efficient and sustainable. Efficient and sustainable service provision requires that the growth in community pharmacy services is matched to population growth, the service needs of the communities within Counties Manukau and future sector planning for co-ordinated service delivery in these communities.

5.     CMDHB proposes to encourage and support high quality and efficient service provision and obtain best value through development of a funding policy that will define the criteria for access to a funding agreement within Counties Manukau.  The basis for this agreement will be

a.  community pharmacy services delivered in the right setting at the right time as part of a multidisciplinary network of community-based services.

b.  community pharmacy services that have the potential to improve health outcomes and quality of life and to reduce costs to the health system.

Feedback Sought

Development of a pharmacy funding policy and consultation on such a policy will require intensive work over a three to six month period. In order to maintain the “status quo” within the sector during this time  it is proposed to suspend the issuing of funding agreements for new pharmacies. This would preserve the current position prior to the development and introduction of a funding policy.

CMDHB is seeking your feedback on its proposal to temporarily suspend the issuing of new funding agreements while a policy is developed for granting funding agreements that aligns with the strategic direction of our DHB.

Please note that a consultative process will be carried out in relation to the proposed content of the funding policy at a later date.

Effect of the Proposal  

For three to six months from 1 October 2011, no new Pharmacy Funding Agreements will be issued to any new pharmacy, even if that pharmacy has been granted an operating licence by Medsafe. 

Exceptions to the Position  

It is proposed that the following exceptions will apply:   

  1. Any pharmacy that, prior to 1 October,  has received written approval from CMDHB to establish a new pharmacy and has made an application to Medsafe for a licence on the basis of that approval but a licence has not yet been issued;

  2. Any existing licensed and funded pharmacy that is undergoing a change of ownership only; or

  3. Providers who can establish to the satisfaction of CMDHB that they have made a substantial and irrevocable commitment to establishing a new pharmacy prior to 1 October in expectation that a funding agreement would be forthcoming.

Period

It is proposed that the temporary suspension would be in place for three to six months during which CMDHB would develop a pharmacy funding policy for its district.  

How to Provide Feedback

The feedback period ended at the end of business day on 31 October 2011.

Your feedback will inform CMDHB’s final decision as to whether to proceed with the temporary suspension of issuing new pharmacy funding agreements and the conditions that may apply during any suspension period.

Please note that any information or response you provided may be subject to disclosure under the provisions of the Official Information Act.

 

 

Published:  31-Oct-2011  |  Enquiries:  Programme Manager, Pharmacy Services