Cost of living Squeeze: How to improve your profitability
With inflation reaching an eye-watering 10% the cost-of-living increase is really starting
to impact practices. The highest outgoings in any practice will be the cost of running the
building and staff wages. When the NHS awarded a 4.5% rise for NHS staff, it seemed like
one foot in the right direction for employees, however GP practices will not receive any
further funding to pass on the new rise. The uplifts agreed in the 2019 five-year GP
contract deal for GP practices “remain fixed”, the DHSC said, despite the Government
recommending a 4.5% rise.
So, what do you do? Do you raise staff pay beyond the level for which you will be funded?
This means the practice and partners absorb the cost. Or do you only offer the pay rise
that was agreed upon in 2019?
If you opt for the latter, you could risk losing staff as they may seek more competitive rates
with a different practice, or they may leave the healthcare service altogether. Staff turnover
has a huge effect on practices and is not cheap, with the costs associated with recruitment,
new employment checks, training as well as paying for overtime while looking for new staff.
If your practice is contemplating offering the full increase (which is still under the actual
rate of inflation), you may have already earmarked an area to “cut back” on in order to reduce
the financial impact on the practice. But will this mean cutting funding for additional patient
services? Either way, losing staff or cutting services could affect the quality of overall care
you can offer to your patients!
How can Dispex help? Dispex members that fully utilise the membership package and all the
online profitability tools and training, may find themselves already in a position where they
don’t have to “cut back” as much as other dispensing sites.
How to improve your profitability:
· Ensure your PA’s & VAT claims are faultless
If you need assistance to make the correct claims, then take a look at our comprehensive learner
led course PA’s & VAT. Members are entitled to discounted places, plus training funding is
available from your local Training Hub.
· Each month ensure your endorsements, switched items and batch submissions
are accurate, in order to receive the correct reimbursement for the products you
dispense and the correct remuneration for the services you provide.
Dispex has teamed up with the NHSBSA to provide FREE lunchtime webinars to help in this area.
Our webinars are hosted by Mark Gibbon, an NHSBSA Pharmaceutical Technical Analyst, and he
allows plenty of time for questions.
· Generics costing more than tariff
Each month over 140 generics, as priced in the Drug Tariff or DM+D, are priced at a lower price
than the purchase price. When you take the clawback into account, this jumps up to nearer 250
generics. In order to reduce losses on the Generics Costing More Than Tariff, the dispensers can
change the script to a generic brand or generic manufacturer (don’t forget the doctor will need
to initial the change).
Each month we update our table that highlights commonly dispensed generics which will make
dispensing practises a loss, as the best purchase price (from our preferred provider’s price list)
is more expensive than the reimb-ursement basic price.
· The options available to you are:
- Do nothing – and absorb the loss.
- CHANGE the script by adding the generic manufacturer supplied (full guidance is
available online for members).
- Do NOT change the script if the manufacturer’s price is less than the tariff.
- Do NOT change the script if there is no manufac-turer’s price and the purchase price
is less than the tariff price.
· Brand Comparison
We compare brands in the same classes of drug, assuming the same clinical efficacy. The comparisons
show the NHS cost and the difference in profitability taking into account wholesalers discount
(reduced and full) and manufacturers’ discount schemes (MDS). Discounts are offered and some
disappear, often with-out notice. Members can login to keep up to date.
· Positive Parallel Imports (PI’s)
We have had a deep dive into the profitability and pitfalls of Parallel Imports (PI’s). We provide a
list of Positive PI’s, which are more cost effective than UK brands. There are many Negative PI’s,
which will decrease profitability if you use them instead of UK brands. Members can login to keep
up to date.
· Manufacturers Discount Updates
We update members with the latest discounts offered by manufacturers and highlight any
discounts that are withdrawn. We analyse the impact of these changes on individual brand
profitability. Members can login to keep up to date.
· Sign up annually to the Dispensary Services Quality Scheme (DSQS)
Not only does the scheme help maintain the highest quality services for your dispensing
patients, but it also rewards Practices for doing so. Payment is based on the number of
dispensing patients on your organisation’s list on 1st January in the financial year to which
the payment relates. The payment is £2.58 per dispensing patient per financial year, so
depending on your list size, it is a potentially valuable source of income and often supports
other services within the practice. There are a few key quality requirements of the Scheme,
including competency assessments & ·training requirements, which Dispex can assist you with!
Need help getting started with DSQS or need a recap? Then consider attending our DSQS
· Training Opportunities
During these unprecedented times, a smaller pay rise may not be received well. One way to
help keep your employees on your side could be to offer them the chance to develop and
up-skill, with the prospects of this leading to a higher role and pay grade in the future.
Dispex offers many forms of training including tutorials, online learner led courses, in-house
training, and apprenticeships via Paragon Skills. Don’t forget training funding is available
from your local training hub as well as the new PCN training fund for management and
leadership (as long as you can demonstrate there is a need for training). As funding comes
directly from your local training hub and PCN to your training provider (such as Dispex),
your practice doesn’t need to pay up front and reclaim the costs. Click here for details.
· Are you getting the best price on your consumable supplies, such as controlled
drug registers, denaturing kits, owing books, dosette trays, stationery, cleaning
products, bags & bottles? They are lower cost items, but they can add up.
At Dispex we offer competitive prices for non-members and enhanced discounts for
our members on CD regi-sters, denaturing kits, owing books & dosette trays.
Hopefully, our member services will help dampen some of the financial strain on your
practice and the recent announcement of the business energy price cap will also relieve
some pressure. If you have mislaid your website login or are looking to join Dispex
please contact us via firstname.lastname@example.org