CHAS and Community Pharmacies

It’s been some two months since this Hobbit posted anything on Facebook . I apologise for this lack of productivity as I have been recovering from the twin shocks of watching HDB clinic rental bids reach $32,800 and the Incredible Hulk in 3D these last couple of weeks. Seriously, the Hulk looked puny next to the rent.

 

Recently there has been some disquiet and murmurings about the community pharmacy initiative by MOH which is also closely associated with another MOH initiative – Community Health Assistance Scheme (CHAS).

 

First, let the Hobbit clarify what is CHAS all about – CHAS is nothing more but a new and lousy name for the old PCPS scheme, but now extended to more people, namely the not so old and the not so poor. So essentially, it’s a better thing with a lousier acronym. It helps more people and gives us GPs more business. Except that the paperwork is really quite tedious. It involves the CHAS applicant and all his household members declaring their incomes. So the best way to get your parents to qualify for CHAS, even if you earn a million bucks, is to kick them out of your house and into a small HDB flat where there earnings per capita for that household is one big kosong.

 

Next thing you should know about CHAS as a participating GP is that there are like all helpful government initiative – auditors. You should know by now that civil servants are not rewarded for solving problems but for preventing abuse and protecting the gluteus – hence the need for auditors. I know of a case of a GP being told by the auditors that she was overcharging. The total bill (consultation and medicine) was a whopping $28 (Singapore dollars). In any case, I don’t think this was the “lady doctor” Mr Lee Kuan Yew was referring to over the recent SMA Annual Dinner.

 

Next is this issue of Community Pharmacy. Now this is a more touchy subject mainly because it involves Big Pharma (not to be confused with Big Mama, which is a movie about how voluptuous and nubile female drug reps become big mamas when they get married, then have 3 kids, gain 20kg and fret over PSLE after they leave Big Pharma).

 

But back to Community Pharmacy. Many GPs who attended the recent behind-closed-doors, off-the-record and under-the-radar but definitely beneath eerily still waters sharing session held somewhere near Outram MRT station asked how come the GPs do not have access to the low-price drugs that can be available to Community Pharmacies?

 

The answer is simple and it is not because someone realized more doctors attended opposition rallies than pharmacists. It is Big Pharma. These drugs are sold by Big Pharma to public healthcare clusters at low prices based on the agreement that they cannot be resold to other healthcare providers without Big Pharma’s agreement. If the whole of Singapore lived on drugs at these low prices, Big Pharma’s profits would suffer. And you know that the likelihood of that happening is slightly less than the MRT not breaking down, taxis picking you up at 11:45pm and COE going back to 20K a pop again.

 

Let this hobbit put it another way – we have had aggregate buying by the public hospitals for many years now (~10 years?). If the public hospitals could have shared their low prices with GPs, they would have done so long ago. They haven’t, because obviously they probably cannot.

 

The CHAS patients who presumably have access to these cheaper drugs at Community Pharmacies will be means-tested ones and hence a case can probably be made to Big Pharma that they should make available to these poor patients their drugs at these reduced prices. These poor people probably never could have afforded them anyway and this translates into new business and market share for Big Pharma.

 

In the meantime, “richer” non-CHAS patients will continue have to bear higher prices, hence in a way subsidizing these poorer patients and helping to maintain or grow Big Pharma’s profits.

 

Is this fair? Well, life isn’t fair, so let’s get used to it. Because there is no serious and practicable alternative – Big Pharma has tremendous power. They invest in Singapore and provide employment. They have the capability to practice territorial pricing, which is why our drugs cost a lot more than in JB. And more importantly, they have the power to stop doing business in Singapore, because Singapore, for all the huffing and puffing, is a small market that Big Pharma can bypass and ignore either in sales or investment. It will be similar to medical device importers telling Singapore they can easily forget about the little red dot if the regulatory costs become suffocating. You, the humble GP, cannot bypass Singapore or create a lot of investment and employment.

 

All this sounds terribly depressing. Well, it is. And it isn’t. Because CHAS still presents opportunities. Let’s look at a few:

 

  • Subsidies and low pricing aside, a system of separating prescribing and dispensing is intrinsically more expensive and inefficient than a GP clinic doing both. Think of the additional costs involved – rental, manpower etc. The GP clinic is still the most nimble healthcare construct around. Life gets tougher, we evolve. Like cockroaches and algae, we can survive nuclear attacks.
  • CHAS will bring more patients (barring the byzantine admin procedures). Personally, I think even with community pharmacies, chronic patients who need more than 4 drugs will still stay in polyclinics and subsidized SOCs. Those with less can move to CHAS, provided they only need one expensive drug, or maybe two at most.
  • You can choose the with-drug or without-drug package. Chances are, most GPs will use more generics and choose the with-drug package for the CHAS patients. And there are more and more good generics out there.
  • It’s an opportunity to raise our consultation fees to reflect true costs. If CHAS can offer a consultation rate of say $35 or $40 without medicines, then it will be obvious managed care companies that continue to offer rates of $10 or less are idiots that deserve to be ignored if not boycotted. You don’t need a guideline of fees to tell you that.

 

The last point on consultation fees deserves elaboration. What is the true fixed cost of a GP’s practice? That varies because of rent, working hours and pay expectations. Someone said that you need about $200 an hour to survive. This is not far off. If we closed our dispensaries and only earned from consultation and procedures, and expect an annual gross income of 200K a year (including employer CPF, leave etc); hire two clinic assistants (you probably only need two if you didn’t dispense) and paid a rent of say $6,000 to $10,000 a month, we still would need to reach a turnover of about $30,000 to $40,000 a month. If we worked an average of 48 hours a week, we would need to generate revenue of about $150 to $250 an hour for every hour the clinic open. Assuming you can see 4 to 5 patients an hour, you need consultation charges that range from $30 to $50. But most of us never do – because we subsume these costs under the drug mark-up. And that is also why many GPs are turning to aesthetics – because it is a lot easier to break this $150 to 250 an hour threshold with aesthetics than the grind of traditional GP work.

 

So, I guess GPs don’t really have to fret about Community Pharmacies or CHAS too much. The real danger is not to the GPs but policy failure. The whole point of Community Pharmacies and CHAS is to decant patients from the polyclinics and SOCs. But means testing hasn’t arrived in SOCs and polyclinics yet and these facilities are being built and equipped to ever-higher specifications. They represent terrific value. If I were a subsidized patient in the SOC or polyclinics and have all the time in the world to wait, why would I ever go to the GP? As such, CHAS may only appeal to existing GP patients who can decrease their out-of-pocket payments with CHAS or to newly-diagnosed chronic patients who have never tasted the forbidden fruit of fancy and cheap polyclinics and SOCs. In other words, no big shift or decanting will occur from the public sector to the private.

 

Long, long ago, in a galaxy far, far away (actually to be exact – In January 2005), when the current DMS had just been DMS for a couple of months, Ms Salma Khalik of the Straits Times wrote that MOH will stop doctors from dispensing after interviewing the DMS. This caused quite a furor then in the medical fraternity then and the Ministry of Health then wrote to the ST Forum to clarify and the DMS also wrote to SMA to explain. This hobbit also wrote about this incident in stout defense of this DMS. (please seehttp://www.sma.org.sg/sma_news/3701/hobbit.pdf ). The MOH minutes were actually released to SMA and it was reported then that “Of the separation of drug dispensing and the practitioner as in developed countries, DMS said it would not happen soon in Singapore. It would take some time before doctors in Singapore appreciate the benefits that such a system would bring to their practice.”

 

It’s been seven long years and many stranger things have happened, like outlawing the Guideline of Fees, allowing lawyers and judges to sit on SMC disciplinary tribunals and this confection called (American-ised) residency. Hence, the real but unspoken concern on the ground is, will this initiative lead to something more ominous down the road, the proverbial beginning of a long and slippery slope? DMS said it would not happen soon in Singapore. But that was said in 2005 and it’s now 2012. So perhaps it is time the medical profession gets the reassurance from DMS again that Community Pharmacy is not a prelude to the separation of dispensing and prescription.

 

Call this hobbit insecure, wary or even paranoid. But as bitterly painful events in the last few years have shown, trust is a commodity doctors can ill-afford nowadays under the current climate.

 

Back to CHAS. Will CHAS work? Against the backdrop of accountability, prevention of abuse and transparency that policy makers and bureaucrats are trying to paint, patient and GPs must also see the value of CHAS against the costs of CHAS. The costs of administration of CHAS, including processing of claims, using the proprietary IT system etc, must be accounted for. The costs of the patient making a trip to the community pharmacy must also be considered. And since time is money, costs also include time spent.

 

Meanwhile, GPs take heart. Cockroaches and algae can survive nuclear attacks….

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