In the current economic climate, even the most experienced dispensing practices can benefit from going back to basics, to ensure they get the best deals from wholesalers and maximise dispensing fees.
Here are my tips on laying the foundations for profitability:
1. Meet with your wholesaler on a regular basis, ideally three times a year. You are putting a considerable amount of business their way so they should be receptive to your request. Ask the representative to go through your statements line by line so you thoroughly understand what you are being billed for.
2. Do not shy away from asking your wholesaler for better terms. If you do not ask, you will not know if an enhanced discount is on offer. Ask specifically about thresholds: must your spend reach a certain threshold before you receive a discount?
3. Ask your wholesaler to list its zero-discount products, there can be variations between wholesalers. A zero-discount product is one upon which you receive no wholesaler discount. You pay the full price for it but when your reimbursement is calculated, you are subjected to a clawback of 11.18 per cent.
This means, for example, that you pay £10 for an item, yet your reimbursement is only £8.88, representing a loss of £1.12. This loss is partially offset by the dispensing fee of £1.90.
However, once that zero-discounted item costs £17, the dispensing fee of £1.90 fails to offset the clawback and you start to lose money by dispensing.
4. Ask whether terms exist for zero-discount products, you might be able to persuade your wholesaler to give you a discount if you spend to a certain threshold. This will mitigate some of your losses.
5. Prescribe and dispense monthly, thereby maximising the dispensing fees you earn: every item dispensed generates a dispensing fee of £1.90, so the more items dispensed the more money earned.
6. Study the monthly Exeter statement sent to the practice. This statement details how your reimbursement for the month is calculated, including clawback, dispensing fees broken down by partner and also how many prescription charges are going to be deducted.
Bearing in mind you have already collected the prescription charges from patients, you must ascertain that you are not having a higher number of prescription charges deducted than you have collected.
On a month-to-month basis, it is not possible to tally up precisely the deduction for prescription charges as some scrips are sent back to the dispensary, but if you monitor them over a six-month period, you should be able to tally prescription charges collected with the deductions made.
Clearly, if there is a large discrepancy you need to look at the processes for handling the collection of prescription charges.
7. Ensure that every hand-written prescription is signed on the back and marked in the appropriate boxes. This applies to those patients who are normally exempt on age grounds.
Failure to sign the back will mean the prescription will be transferred into the paid section for counting purposes at the Prescription Pricing Division (PPD) and you will be charged a prescription fee (currently £7.20) for every item on that prescription.
8. Purchase your generic drugs as cost effectively as you can. This should be your focus, given that so many traditional manufacturers' scheme discounts have disappeared over the past few years.
Generics can be purchased from the wholesaler or from numerous other companies, sometimes called shortliners, dedicated to delivering you generics at rock-bottom prices.
It is worth asking both the wholesaler and the shortliner to do a comparison of prices with a month's worth of figures. There are often loyalty generics schemes available through wholesalers which give extra discounts on generics, if thresholds are reached.
Once again, ask if you are signed up to such a scheme and request details of the exact terms.
9. Claim all your out-of-pocket expenses. You will need to refer to the drug tariff to understand this fully. Out-of-pocket expenses can be claimed on all medicines infrequently supplied to patients with the exception of products in category A or M in part VIII of the tariff.
Out-of-pocket expenses can also be claimed on appliances in part IXB and IXC of the tariff but not on appliances in part IXA or IXR. Endorse the prescription with an indication of the total expenses incurred and with the recommended endorsement: XP.
Do not send the invoice up to the PPD, keep it within the practice in case it is required for evidence.
You can claim the costs incurred during the process of obtaining items needed for patients, such as postage, handling and cost of phone calls to manufacturers.
10. Finally, keep all of the practice's prescribers and dispensers informed about how the dispensary should be working.
Quarterly meetings, during which the dispensing lead goes through any recent changes should be enough to keep everyone up-to-speed.
- Dr Silver is a dispensing GP in Oxfordshire.