Computachem
E-Newsletter
Editor:
Neil Johnston
Regular Contributors:
Rollo Manning
Leigh Kibby
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Home July 2000 Edition
#9 |
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WWW (Who,What,Where) + E-VENTS
In this edition we are looking at a number of variables
impacting upon pharmacy as a whole. Leigh Kibby, in a departure from
his normal humorous style, presents a sobering article on the state
of men's health and why assistance is urgently needed, particularly
in the rural sector. The question is, can pharmacy offer some supportive
strategies?
Rollo Manning examines postings made to the Auspharmlist discussion
forum on the Internet, and forms the conclusion that:
"Community Pharmacists in Australia have a right to be concerned
about matters concerning their businesses, as they are after all big
investors in small business. That their concerns are most to do with
being paid for a fair days work is not unreasonable and should be taken
note of by those in a position to change the landscape in which they
operate. Their major partners, the HIC and medical practitioners, must
respect this and assist in the process of successful business management."
We are also endeavouring to take a fresh look at marketing in an effort
to see if we can provide a basis for pharmacy to stand out from the
crowd through the medium of "ideaviruses".
Genetically modified foods and their labelling are also back in the
news as are medical centres. Finally, there is a look at our supermarket
competitors, with evidence to show that they may have lost their way,
and have been caught short on strategy with the introduction of global
retailers to Australia. In panic, major supermarkets continue to cannibalise
small retailers (to increase market share) through takeovers or through
unconscionable conduct in the marketplace. This is beginning to cause
imbalance, particularly in some rural towns. We see a glimmer of hope
in Western Australia as state government intervention provides a mechanism
for small business to fight back.
ANOTHER LOOK AT MEDICAL CENTRE ISSUES
Medical centres have become a controversial issue for
two reasons. One is because entrepreneurs have entered into the ownership
and have radically altered the way in which medical practices are run;
the other is that CoAG recommendations were not followed in the recent
Guild/ Government agreement, to allow for the automatic inclusion of
a pharmacy in a medical centre. Legislation relating to medical practitioners
and their practice companies, does not act to exclude unqualified persons
or corporations. This has allowed groups such as Westpoint Corporation,
Foundation HealthCare, and Total Care Australia, plus others, to heavily
invest in practice companies and some downstream activities, such as
pathology and radiology services, and private hospitals. The model is
styled as "vertical integration" and what you end up with is a one-stop
medical supermarket.
To entice doctors into this type of arrangement, payments of up to $400,000
are offered for solo practices. This means the new management company
owns the patient list and requires a five year service agreement from
the doctor. Some describe this as an indentured labour agreement. In
return, doctors are paid 50% of the Medicare fee, are relieved of all
administrative activities, and are able to work regular (and shorter)
days. The package includes regular holidays with a locum supplied. On
the changeover, a doctor earning an annual income of $87,000 in solo
practice (after expenses) will earn approximately $100,000 per annum
from the same patient base within the corporate structure, scales of
economy coming through efficient management practices Consumer patients
appear to like this medical model, even though they are only allowed
a 10-15 minute consultation on each visit. Multiple problems are handled
by generating a set of 15 minute appointments for other days.
Patients often temporarily return to the "real doctors" remaining in
solo practice, when they need a more exhaustive or personal care response.
The analogy between pharmacy and the initial expansion of commercial
supermarkets is uncanny. Pharmacy customers deserted to supermarkets
because pharmacists were unable to offer a total package of price and
convenience, particularly where convenience would have meant offering
an expanded range of products to include food. Without going into the
various professional arguments, a pharmacy located in a supermarket
environment would have, (and still would be ) successful.Therefore,
it makes even less sense when pharmacies are prevented from being part
of a medical supermarket practice, because consumers have already voted
with their feet. Medical centre patients are bulk billed and have the
convenience of being able to make an appointment at any time within
a 24 hour day, and know that the appointment time will be honoured.
Medical practice companies are very strict on appointment times, as
the inability of the average medical practice to honour an appointments
schedule has become a consumer irritant. Bulk billing is also a consumer
need, even though Medicare payments to doctors may be inadequate.
However, there is considerable unease among many of the stakeholders
as the medical centre model unfolds. Fear exists that participant doctors
will be forced to process more patients to maximise profits, and that
the doctor will become an agent of the company rather than of the patient.
A small number of these practices are already generating five to seven
minutes per consultation. Another fear is that doctors may be pressured
into ordering unnecessary tests from an associated provider, or only
generating referrals to centre associated services, removing doctor/patient
freedom of choice.
Already there is evidence of channelling of prescriptions, and a move
to develop prescribing software linked to pharmacy computers, to ensure
the process is seamless, and prevents "leakage". Pharmacists are very
familiar with the process of companion selling in the commercial area
of their business. It now seems that the pathology "special of the week"
or other inducement, may accompany every prescription. The lack of ownership
provisions means that health insurance companies can become the major
shareholders (with the potential to control the entire system as "managed
care"), and that doctors and pharmacists can also be shareholders. They
can also be shareholders in generic manufacturing companies to extend
"integration".
While all the above contributes to profitable and stable business, where
do ethics come in?
Is it time to legislate for registers of practitioner interest to be
available to patients?
It must also be asked if the current push by doctors to double the Medicare
rebate is driven by genuine need, or the need of corporations to satisfy
shareholders, by driving up dividends and capital gains. At the moment,
tangible asset backing to these types of shares is disproportionate
to capital gains, making the investment highly speculative. What happens
to the total industry when "bust" follows "boom"?
Consumers may eventually be disappointed with the model they are currently
embracing, because of the lack of ethical safeguards. It is essential
that pharmacy ensures that pharmacy ownership prevails in pharmacist
hands and that consumer expectation is adequately met from ethical investment
policies.
CONCERNS OF
COMMUNITY PHARMACY PRACTITIONERS
From Rollo Manning
The first six months of the year 2000 saw some 500 postings made to the Auspharmlist Discussion Forum on the Internet. In the hope of finding what concerned pharmacists contributing to the discussion, an analysis was done of those subjects which achieved ten or more responses. This shows that administrative subjects top the list by far. In fact only one subject of a "professional concern" nature made the list of ten or more hits. This was "harmful doses for the elderly", which was reduced to a debate on the virtues of chamomile tea over benzodiazepines as a sedative compared with "tender loving care"! The listings with the most hits show matters concerning dollars and cents well out in front.
The list is shown here:
TOP LISTING IN AUSPHARMLIST Six months to end June 2000
Lockie POS ..............................17
Owing Prescriptions..................15
Chemist Kickbacks...................15
HIC Rejected Scripts................14
Harmful Doses for the Elderly..14
Panadol Withdrawal...................12
Likely Prepulsid Withdrawal.....12
Costs of Providing CMI............12
Mail and Internet Order...........10
Total 121 of 500 (approx)
In fairness to the sponsors of the list it should be pointed
out the guidelines for postings does not limit the subjects to any particular
aspect of pharmacy practice. In fact the objective is stated as being
to "facilitate communication and the exchange of information between
community pharmacists in Australia. AusPharmList is broadly dedicated
to the discussion of issues relating to the practice of community pharmacy
in Australia."
That said, it should be possible to draw some conclusions from the above
table.
Being in business and able to keep an accurate sales analysis – Lockie
POS
Being paid for work done in a fair and reasonable manner – owing scripts
and HIC rejection Being defensive about suggestions of rorts – Chemist
kickbacks
Being at the frontline of product withdrawals from the market – Panadol
and Cisapride
Being forced to meet apparently unfair costs – CMI costs
Being forced to meet competitive market inroads – mail order through
Internet
Each of the above taken singly is highly laudable. In their own right they are deserving of attention. One aspect of the table is the return for "a fair days work". Surely the Health Insurance Commission and the medical profession can take some note of the fact they are errant in the manner they deal with community pharmacy. The HIC, acting on behalf of the Department of Health, pay the pharmacists of Australia for the Pharmaceutical Benefit items they dispense. Their contribution to the small business of pharmacy is considerable at around 65 per cent of total turnover. Surely it can get it right. But no! Whenever the question of the HIC crops up there is always a string of complaints, as evidenced on Auspharmlist. Could it be the HIC does get it right in the vast majority of payments and it is the niggling payment of dollars and cents among the billions paid out each year that annoys many? There is no doubt this is the case. Nonetheless the question always raises concern. It is time the HIC sat down with representatives of the singly owned pharmacies and sorted out the public relations mess that arises whenever the letters H-I-C are raised with practicing pharmacists. Similarly the medical profession with "scripts owing". The doctor is paid by the HIC almost immediately for a consultation if need be. Is it too much for the AMA to respect the position the pharmacist is in and ensure they get paid almost as promptly for the drugs they supply as a result of the consult? It is time for a fair go to pharmacy for the work it does in the supply chain and not to delay any further the opportunity to sit around the table and iron out the problem areas. How long is it since the Pharmacy Guild wrote about it’s most recent meeting with the AMA? Fair go...read the Auspharmlist and see for yourself what is concerning the community pharmacists of Australia. More next issue. Readers are invited to send in their interpretation of the range of subjects posted on the Internet.
The comments and views expressed in the above article are those of the author and no other. The author welcomes any comment and interaction that may result from this and future articles. The editor would be pleased to publish any responses.
In the mosaic of total retail activity, pharmacy still
occupies a significant, but steadily eroding market share. Market erosion
is not just applicable to pharmacy, as all small business retailers
are suffering. This process has, and continues to manifest, because
of weak anti-monopoly laws. It has reached a stage where it is not operating
in the best economic or social interests of Australia, and government
intervention is urgently required. With 83% of the retail dollar being
controlled by Franklins, Woolworths and Coles, there is little opportunity
for each member of the big three to expand individual retail sales and
market share. Each remains optimistic that in a "knock down, drag 'em
out battle" they will be the one left standing. However, there is now
an alteration to the equation as global retailers enter the fray with
their aggressive and efficient methods of transacting business. The
Australian majors had not planned for this form of competition and have
not organised to meet the threat to this date. Consumer groups have
often favourably looked upon the big three because of their apparent
lower prices.
Lower compared to what?
The remaining 17 percent of the retail market, precariously held on
to by small business (of which community pharmacy is a part), simply
has not had the opportunity to compete. With predatory retail pricing
and inflated wholesale prices through hidden rebates, the playing field
has definitely been uneven.
The introduction of the GST has offset some of these buying advantages
involving sales tax and rebates, but hidden margins enjoyed by the majors
(advertising subsidies, shelf rentals etc) still leaves a lot of corporate
fat. For example, shareholders of Coles can partake in a 15% off sale
and still receive an overriding discount of up to 25% in addition. It
was also reported in this newsletter that scandalous markups of up to
1200% were being imposed on fresh fruit by major supermarkets, to such
an extent that the growers had complained of almost zero returns. They
were unable to beat the blockade of the big three. Deregulation of various
industries e.g dairy, has not resulted in cheaper retail prices, only
inflated supermarket margins.
How can consumer groups be supportive of this type of behaviour?
Because the last decade has been a relatively easy one for the "big
three", they have become vulnerable through the "fruits" of their success.
Their local market domination makes them prime takeover targets for
the new global players, and this realisation has caught them by surprise,
as they have flourished in their "splendid isolation".
Instead of looking for opportunities overseas, they are beginning to
set up in towns that have traditionally not met sensible criteria to
support a new business.
The principal of these was a population in excess of 20,000. Because
this is done more in panic and without the least twinge of a social
conscience, it is totally disrupting the local economies of these smaller
towns, resulting in heavy job losses. Small town entry is made by takeover
of independent supermarkets. Australia-wide 24 independent supermarkets
have been taken up by the majors over 1999 and 2000 to date, which means
24 towns have had their local economies disrupted. This process has
been studied by the Urban and Regional Planning Dept of the University
of New England ,which has stated that there is not a lot of scope for
additional retail spending, with opportunities only available in non
retail and service business. It was further stated that with this process
"it was inevitable that small communities would decline".
While there has been a governmental investigation into the behaviour
of the "big three", economic rationalists have prevailed, and the damaging
process continues unchecked. The crisis is not immediately evident in
regional and major cities, but is certainly being felt by the rest of
the country. Government does not seem to have any sort of coherent policy
to prevent this social and economic decline of so many rural communities,
except to throw a bit of money at the problem from time to time. Our
laws pertaining to monopoly and market share concentrations are nowhere
near as strong as countries such as the US and the UK, where this type
of practice is severely stamped on.
Because the problem is so severe, it is just possible that the concept
of fixed retail prices and government supervised prices justification
may need to be considered once more, if the concept of a vital small
business sector is really a consideration of government.
A glimmer of hope is emerging in the state of Western Australia, where
a proposal is being considered to amend the Fair Trading Act, by introducing
a comprehensive unconscionable conduct component designed to protect
all types of small business in WA. For the first time, small business
will have access to WA courts to protect their rights. Fair Trading
Minister, Mr Douglas Shave, is moving to have the same provisions adopted
by other states and at federal level. The Pharmacy Guild needs to monitor
and be part of this process, encouraging its adoption Australia-wide.
Equal access to the retail market place is all that pharmacists and
other retailers have ever required. They do have the management and
marketing skills to complete the job.
Once in a while you can pick up a book about an old subject
looked at in a fresh and significantly different way. Such a publication
will stand out from the "me too" crowd and leave an indelible mark.
What Peter Drucker has been to management theory, Seth Godin is to new
marketing theory. He has written a book entitled "Unleash Your Ideavirus"
and it is well worth reading.
He describes how the first 100 years of the modern economy was about
who could build the biggest and most efficient farms, the second hundred
years as being the race to build the biggest and most efficient factories,
and the third century? Well, it's about ideas.
At the moment, nobody knows how to build a farm or a factory for ideas,
but it is ideas that are driving the new economy and creating wealth.
Ideas are changing the world, and even though we do not know how best
to organise the production of ideas, it is clear that if you can get
people to accept and adopt your ideas, you can win financially, gain
power and yes, change the world.
So how do you drive ideas?
According to Seth Godin you unleash an ideavirus.
An idea that is stationery is of no value, but an idea that moves, grows
and infects everyone it touches.......... is an ideavirus.
An ideavirus may start as a powerful, logical essay that assembles a
group of existing ideas and transforms them into a new, larger idea
that is unified and compelling. Just as easily, an ideavirus may begin
life as a song, or an image, or perhaps a very useful product or process.
The medium doesn't matter, but the message does.
As long as your message changes the way people think, talk and act,
you create value. In the new economy, consumers have built up antibodies
to resist traditional marketing. Direction needs to change from marketing
at people to creating an environment where consumers can market to one
another.
As marketing is about the spread of ideas, the future belongs to people
who can unleash ideaviruses. As an example, have you noticed how it
sometimes appears that everyone you know is watching the same TV show,
reading the same book, or talking about the same movie, website or TV
commercial. How does this happen? It usually happens because an idea
spreads on its own, not because the company behind it spends a large
sum of money on advertising, but because the idea behind it is an ideavirus.
Ideaviruses are not new. We all know the value of "word of mouth", but
what motivates someone to spread you message?
With improvements in the speed and quality of communication, ideaviruses
are much easier to start, are more potent and they start fast and spread
fast. Ideaviruses give increasing returns. Word of mouth dies out, but
ideaviruses keep growing and spreading.
Ideaviruses are the currency of the future therefore ideaviruses are
always about the new. In America, it took 20 years for radio to have
10 million users and it took 10 years for TV to do the same thing. It
only took 28 months for Netscape to accumulate 10 million users, and
Hotmail did it in seven months. By aggregating a mass audience and by
not having to share it with an entire industry, Internet companies such
as Netscape and Hotmail are able to realise huge profits.
Some ideaviruses are organic and accidental, they just happen and spread.
The Macarena dance was one such happening. But most successful products
and services are intentional acts of smart entrepreneurs who know that
launching an ideavirus will help them accomplish their goals.
Old style marketing relies on the concept of "interruption advertising",
which interrupts people with unanticipated, irrelevant and impersonal
messages, in the hope that they will buy something. Sometimes it works.
Interruption advertising gives control to the marketer which is a perceived
advantage, but in essence it is very expensive, difficult to target
and as a result, usually ineffective. Basically it is marketing to people
who really don't want to be bothered. The goal of the consumer is to
avoid hearing from the advertiser whenever possible. Marketers who continue
to follow the strategy of interruption advertising will find the mathematics
not to their liking. High up front costs with minimal numbers of strikes
will create costs that will find their way back into the selling price
of the product or service. When price becomes prohibitive, the product
or service will then disappear.
What marketers are now looking for is that "something" that taps into
the invisible currents that run between and among consumers. Instead
of talking to, or at consumers, marketers have to help consumers talk
to one another. In creating an ideavirus, we are not buying space, we
are producing an environment. Such an environment will allow an idea
to replicate and spread. It is the virus that does the work, and not
the marketer.
We will be exploring practical applications of ideaviruses in future
newsletters to assist in giving pharmaceutical marketers an edge. If
we succeed, then this newsletter itself will prove to be an ideavirus,
infecting as many persons as possible.
YOU'VE GOT MALE
by Leigh Kibby
Men’s Health
The health of men in Australia is declining at such a
rate it is now a major cause for concern. Rural men, particularly young
rural men (men 15-25), are enduring a health crisis. These rural men
are at risk and dying. Suicide, farm accidents (which can also be called
"risk denying behaviours - RDBs") and road death are reaping a grim
harvest in our rural communities.
Urgent action and innovative approaches need to be taken now so that
we can prosper as a nation socially, economically and morally.
Rural General Practitioners (GPs – doctors) are primary care providers
who can take a lead in reducing the male death rate through a preparedness
to support innovative approaches to community health. Mentoring is one
such approach that can make a substantial difference and build the capacity
of men to deal with the issues that lead them to suicide and self-destructive
and/or risk denying, action.
The "Unhealthy" Facts Men are taking their own lives, or dying from
RDBs, at a rate that is alarming.
"Males are four times more likely than females to take their own lives,"
and " ….suicide rates for males 25-44 have continued to rise."
"Each year in Australia 1,600 young males die and more than 60,000 are
hospitalised as a result of injury. In 1993, 45% of all the deaths in
this age group were the result of unintentional injury. By far the highest
number of young men who die this way were in remote areas."
In fact, "Living in the country is a health hazard …… especially for
young men."
Rural GPs and medical and health care professionals are called in, often
on an emergency basis, to provide treatment and supervise care in an
effort to save lives and treat the outcomes. Whilst the skill of these
isolated and rural GPs makes a substantive difference to the long-term
physiological outcome, it is apparent to them that prevention is worth
any tonne of cure they can provide.
"We would prefer to spend our time improving the health of rural men,
rather than treating serious injury or preventing death," says Dr. Olga
Ward a GP in outback Australia.
"The numbers of injuries we treat and the suicides know about are more
than statistics. They are people who have families, friends and communities
and so the impact of their loss or injury has a ripple effect socially
and emotionally,"says Dr. Phil Holz.
The key is to know and understand the issues that lead to these frightening
statistics and then treat the cause rather than the occurrence.
Social / Personal Issues
It is clear that the health of rural men is related to the problems
they face and their unwillingness, or inability, to seek help rather
than ignoring or burying the problem.
"Men are obviously feeling troubled and the troubles are worse in the
country." The causes of their troubles range from financial worries,
relationship breakdowns, unemployment, substance abuse and alcohol to
list a few of the triggers.
Additionally, "It appears that many rural men adhere strongly to the
traditional male role ….. and this may feed into the role of risk-taker,
hard drinker….many men drink to relieve stress" and these factors affect
their accident rates and can lead to suicide as an option – avoidance
and escape.
Furthermore, men have used denial and repression rather than adopting
coping strategies. "I see it all the time in my practice. Tough, strong
men who really want to talk but don’t know how or who," says Dr. Ward.
"Females express males repress," which might explain the difference
in the female and male suicide rates.
Health Statistics Men die more often – female death rates for the period
1992-1996 were 40% lower than male rates. Male death rates are 20% higher
in remote areas.
"For males, injury hospital separation rates in large rural centres
and remote centres are respectively 39% and 145% higher than in capital
cities."
The male death rate from injury is three times higher than the female
rate. Solutions "Even if it were needed and the men were likely to attend
sessions, there are not enough psychiatrists, psychologists and counsellors
in Australia to undertake therapeutic interventions with every man in
need. We need a strategy that works with men, in a man’s way and in
their communities. Mentoring is an ideal strategy for men, as long as
the Mentors are properly trained," (Rick Hayes).
Mentoring provides another man who can listen in a way that helps men
share their problems, express their feelings and then develop solutions
and action plans, the latter being very important to men. Having some-one
who can listen, with who men can discuss their problems.
"The emotional release from this sharing [groups organised by OM:NI]
gives many men the opportunity to relax, talk to their peers and to
function as whole individuals."
"A man needs only one person in whom he can trust and confide…"
In the past, men and communities created opportunities for Mentoring
to develop naturally. Roles were clearer and so the Mentor or friend
needed to provide less help or guidance. Nowadays, the changing world,
and increasing pace of change, means different coping strategies are
needed and so Mentors need different listening skills.
These skills can be learnt and the beauty is that "Mentorees" will acquire
"emotional intelligence" whilst talking over their problems with their
Mentors. Research on the success of Mentoring programs for men is a
needed urgently and pilot programs are one way of getting the data.
One important aspect of any program will be to link closely with GPs
and other professional health workers to facilitate referral and to
monitor the effectiveness of the program. Another benefit to this will
be training these GPs and health professionals in the key Mentoring
skills. Australia has developed a model (the ERA Mentoring strategy
and training seminar) that has achieved some success with men and is
attracting interest from overseas. Trialling this program in rural Australia
could lead to significant insights and would improve very attractive
to overseas communities and health professionals.
The comments and views expressed in the above
article are those of the author and no other. The author welcomes any
comment and interaction that may result from this and future articles,
and can be contacted directly by e-mail at leigh@kinematic.com.au
. Alternatively, the editor would be pleased to publish any responses
directed to neilj@computachem.com.au
.
While this article was being researched, Australian and
New Zealand health ministers were meeting on July 28th, to discuss a
decision reached 12 months ago i.e that all genetically modified (GM)
foods should be labelled.
Since that decision, there has been much debate on whether less than
1% of genetic modification required labelling, if GM foods should be
labelled at all, or should any foods with GM traces be so labelled,
including food served in restaurants and cafes.
The issue is thrown into stark relief when it is known that 96% of Australians
want full disclosure on labels, confirmed by a recent study conducted
by the Australian National University. Manufacturers, on the other hand,
know that consumers will boycott GM foods, at least in the introductory
phase. John Howard is known to support a minimum requirement for labelling,
because he is concerned at the cost to business, but he is not likely
to be supported.
The Australian Chamber of Commerce and Industry stated simply, that
it will be consumers who will ultimately bear the costs associated with
food labelling (albeit that a business nightmare would occur, if consumers
did not buy a GM product at all, thus not incurring any label costs).
While there is no doubt that genetically engineered substances will
provide a new range of medical treatments in a novel way, the focus
on this benefit is being pursued by biotech manufacturers to gain acceptance
for food, agriculture and livestock genetic manipulation. The effects
of GM substances entering and affecting the environment, or on human
health, are simply not known, and any attempts to force this type of
process without adequate evidence, needs to be discouraged.
There is still a range of ethical issues to be resolved. As negative
effects are not likely to be observed until two or three generations
have occurred, let us hope this technology hastens slowly, and that
information becomes available in a free and open manner.
P.S As we go to press, the Australian and New Zealand representatives
for their respective states and territories have voted overwhelmingly
for the labelling of GM foods irrespective of the concentration.
There will be two exemptions:
*Foods that are accidentally contaminated, and
* Foods prepared by restaurants or other prepared foods outlets.
Looks like a new niche market for those restaurants advertising that they do not use GM foods!
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