Pharma Benefit Scheme
One cannot deny the fact that Information Systems are major players in the simplification of business processes in all aspects of businesses. Since their early part of the Information Age, information systems have been utilized by companies and government instrumentalities to aid them in the efficient performance of their respective tasks. The implementation of such information systems is not a simple task as sometime it requires the integration of such systems in the currents processes of the organization and even at times requires changes in the company’s business paradigms. Aside from this, its implementation can be a little expensive. A thorough analysis of the current system and processes needs to be done before planning the intervention to be made. This is very critical since a not well-planned system may result to waste of resources. In addition to the cost of developing the system including the manpower required to do so, it also requires the organization to provide for the necessary hardware components to implement the system developed. And we all know the purchasing technology hardware is not a joke as it is expensive while careful study of required hardware must be made to ensure compatibility. (Department of Health and Ageing, Australian Government 2012)
The use of information systems is not limited to business organizations as numerous government and non-profit organizations are utilizing information systems with the aim of improving their services. The Department of Health and Ageing of the Government of Australia is not an exemption to this. They have been utilizing Information Systems in several of their services of which one particular service is integrated in its Pharmaceutical Benefit Scheme.
Background of the Pharmaceutical Benefit Scheme
The Pharmaceutical Benefit Scheme is a project of the Australian Government aimed at providing Autralian citizens with “affordable, reliable and timely access to necessary and cost-effective medicines”. (Brown et.al. 2006) This scheme implements two types of policies. The first is in terms if patient co-payments which refers to the contributions of patients directly from their own pockets when they purchase medicines which they need. The other policy is with regards to the consumers Safety Net which is directed towards provisions that tries to protect patients and their families from spending too much on medicines within the year. Instead, the schemes safety net provides some arrangement to reduce the impact of the cost of medicines to the individuals. However, the safety net is not equal to all as this depends on the individual or families income. Particularly, families or individuals who are within the set threshold belonging to low income brackets or those who enjoy pensions or allowances from the Commonwealth Government are qualified for the copayment and safety net provisions.
All Australian residents having a valid Medicare Card are entitled to the benefits of the Pharmaceutical Benefit Scheme. In addition, foreigners whose countries have a Reciprocal Health Care Agreement are also eligible to apply for the benefits of the scheme particularly the subsidy on medicines. Citizens who are holders of Pensioner Concession Card, Commonwealth Seniors Health Card, Health Care Card or the DVA White, Gold and Orange Cards are eligible on the other hand for the concessional benefits which have greater amount of subsidy from the government.
The current patient fees and charges applied under the Pharmaceutical Benefit Scheme includes a maximum of $36.10 on most of the PBS medicines while a maximum of $5.90 for individuals having a concession card. One determinant of the copayment adjustment is the Consumer Price index of each year, although in reality, the PBS medicines cost more than what the government is actually asking from the individuals as co-payment.
The safety net threshold also increases yearly based on the CPI index. It currently stands at $348 and $1,363.30 for concession card holders and other patients, respectively. This safety net is uniformly applied to each family regardless if the number of members of the family including partners who are not legally married. If safety net thresholds have been met, then the concessional patients are given the PBS prescriptions without any farther charge while regular patients pay any other PBS medicines they got.
History of the Pharma Benefit Scheme
The Phamaceutical Benefit Scheme was institutionalized when the National Health Act of 1953 was enacted in 1953 and since then it has been implemented by the Australian Government. Although some benefits provided in the PBS have already been implemented as early as 1948. At the start, only limited lifesaving and disease preventing drugs were given free to the community by the government. However, this number increased and evolved such that by the 2002, over 590 drugs were subsidized in different drug brands. Although some restrictions were set, only 200+ of the drugs require doctors prescriptions. A complete list of the supported drugs can be accessed in the Schedule of Pharmaceutical Benefits for Approved Pharmacists and Medical practioners.
Although, only formally legalized in 1953, a repatriation pharmaceutical benefits scheme has already been established by the government as early as 1919. This purposed of such is to me able to provide free medicines to ex-service men and women especially those involved in the First World War and the Boer War. Between 1944 and 1947, there were early legislative attempts were made and trying to set a restriction of the medicines to be provided to medicines included in the Commonwealth Pharmaceutical Formulary. Between 1948 and 1949, the government was able to introduce the Limited Pharmaceutical Benefits Scheme which extended the coverage of the previously approved Pharmaceutical Benefits Act of 1947 to include additional benefits to geographically isolated communities and in addition provided additional “life saving and disease preventing drugs” to the whole community for free. In 1951, the different health related acts were consolidated and become incorporated in the National Service Act and in 1953, a Pharmaceutical Benefits Advisor Committee (PBAC) was formulated. The current PBS today was first used and introduced in the 1960s. This had the general components of “combination of the existing pensioner and general schemes, an expanded range of drugs for the general public, and the introduction of a patient contribution (or co-payment) of 5 shillings to provide some control on volumes and expenditure.” (Biggs 2003) However, even with the introduction of the concept of co-payment to so as the government will not shoulder all the cost of the medicines, the Governments expenditure of medicines still rose to $100 million from $40 million. This expenditure is attributed to the increase in the prescription volumes. Between 1970 to 1979 and with co-copayments increased for $1 to $2.75, the government’s expenditure still continuously increased until such time that it reached $211 million. The increase was partly caused by the inclusion of contraceptive drugs in 1973. Cyclone Tray also had an impact on the expenditure of the government since during the aftermath of the cyclone, the government offered free medications. (Biggs 2003)
New improvements to the scheme were done in 1983 with the introduction of a concessional beneficiary category aiming to help the disadvantaged group. A concession card is given to low-income and unemployed individuals which entitled them to pay lower copayments (concessional amount) to drugs they purchase. However, the move also increased the contribution of patients to cover-up the added costs of implementation of the new schemes. From the 1990’s changes made to the PBS were focused mainly on increasing patients’ co-payments to somewhat lessen the expenditure of the government.
The Pharmaceutical Consolidated Information System
There are several effects of the Pharma Benefit Scheme both to the government and to the individuals or families availing of the schemes. The government’s contantly increasing amount of subsidy to on PBS has been subject for scrutiny. Likewise, the increasing percentage of Australia’s population suffering from chronic diseases has also been a burden as most as majority of the PBS drugs are for chronic diseases. This is expected to grow as the population ages. Another factor seen to have a significant contribution to the increase in cost of pharmaceutical drugs is the increasing cost of current health technologies being used.
Before the changes were implemented in the PBS, most of the PBS drugs were connected to reference drugs, without determining if these drugs are being produced by several manufacturers or not or without taking into consideration the competitive market these drugs are in. The government deemed it necessary to introduced reforms to the system in order to maximize the pricing and get better value for the drugs at a cheaper price promoting transparency on the prices.
The PharmCIS which was originally scheduled to be released in 2011 was delayed and finally pushed through last December 2012 which was delayed according to the DoHA to ensure that the data formats used will be standardized. Basically, according the, no significant changes will be made as regards to the implementation of the PBS but the system focused on standardizing the data formats using XML formats for easy integration in the IT systems of other pharmaceutical corporations.
In addition to data integration, this system also aims to have a untified and a single main source of data to avoid inconsistencies and accuracy of information to aid better decision-making. It also aims to consolidate existing processes to be able to come up with one uniform process that is applicable across the board to improve efficiency. Moreover, this system also tries to improve the communication mechanisms between prescribers and dispensers (pharmacy) through the introduction of machine encoding and provides ways for electronic transfer of prescriptions from one health organization to another but also adhering to privacy rights of the patients.
The major advantage of the new system over the old system being implemented is the data schema it uses – that is through the XML format. With the format, data processing is expected to be faster compared to the old textfile format since the textfiles sometimes requires manual adjustments of the data. Because of the XML data formatting, there is an increased reliability of data which means it will not require Medicare to approve prescriptions through telephone. Other advantages of the system is the phaseout of vague terminologies that might be confusing since the system uses the Australian Medicine Terminology (AMT) which gives drugs with unique numerical identifiers.
With regards, to the cost of the system, in the long run, technically, it will be a profit generator as errors will be minimized and could provide clients with more efficient services. although, this system will not have a direct effect on the prices of drugs. It will be more of a cost-cutter rather than a revenue generator to the pharmaceutic organizations as efficiency is improved. The introduction of the system does not lessen or add to the number of patients these pharmacies of the PBS serves.
References:
Brown, L, Abello, A, and Harding A ,2006. Pharmaceuticals Benefit Scheme: Effects of the Safety Net. Agenda, Vol. 13, No. 3 , pp.211-224.
Commonwealth of Australia, 2012. Independent Review of the Impact of Pharmaceutical Benefits Scheme (PBS) cost recovery.
Hamilton, C, Lokuge, B, and Denniss, R., 2013. Barrier to Trade or Barrier to Profit? Why Australia’s Pharmaceutical Benefits Scheme Worries U.S. Drug Companies. Yale Journal of Health Policy, Law, and Ethics, Vol. 4, Issue 2 , pp.373-386.
Lopert, R, 2009. Evidence-Based Decision-Making Within Australia’s Pharmaceutical Benefits Scheme. The Commonwealth Fund, July 2009.
Sweeny, K., 2007. Key Aspects of the Austrian Pharmaceutical Benefits Scheme. Working Paper No. 35. Pharmaceutical Industry Project Working Paper Series. Center for Strategic Economic Studies. Victoria University of Technology.
Sweeny, K., 2007. Trends and Outcomes in the Australian Pharmaceutical Benefits Scheme. Working Paper No. 36. Pharmaceutical Industry Project Working Paper Series. Center for Strategic Economic Studies. Victoria University of Technology.
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