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How the cuts are affecting me: ‘Cat M clawbacks will hit my business by £32k’


02 Nov 2017

Part of The Pharmacist’s series of case studies on how the funding cuts are affecting ordinary pharmacists, a Dorset contractor explains what effect they are having on his business

Mike Hewitson – superintendent pharmacist, Beaminster Pharmacy, Dorset

‘The cuts have felt much worse than we initially planned for. We planned for a long time for them and made sensible decisions to save money. I thought we were as ready as we could be. But as with many pharmacies, the reality has been very different from the theory.

‘One of my pharmacies was protected by the Pharmacy Access Scheme (PhAS) and the other one wasn’t. We predicted to have a 4% hit overall on our NHS income.

‘What came on top of the cuts has been a pretty big Category M clawback, which will hit my business by about £32,000 by next August. This has forced us into a really different place, in terms of our short-term cashflow and the decisions about what we should and shouldn’t do as a business.

Juggling cashflow

‘The most difficult aspect has been juggling cashflow, especially with huge price rises for generics and dwindling NHS receipts. I had to delay paying our corporation tax bill as a result, which was very embarrassing. We are now considering restructuring our long term borrowing to give us more breathing room because of the volatility in NHS income and uncertainty in the future.

‘We recently took the difficult decision to reduce our opening hours to save money. We no longer open for non-core opening hours in one branch.

‘There has been quite a big psychological impact on our customers who have once again questioned the logic of cutting back on pharmacy when GPs are so over-stretched. We’re also considering reducing hours at the other pharmacy, which opens for 25% longer than we are contracted for.

‘We’ve had to get tough with staff, which has been quite difficult because I really do appreciate the people I work with. For example, we’ve had to crack down on payment for sick leave because we had some members of staff taking advantage. Likewise, we’ve had to ask our pharmacists to dig deep with their advanced service provision.

Impossible to plan

‘The difficult part of where we are right now is that I honestly couldn’t tell you where the NHS wants us to be. Do they want us providing high quality clinical service or do they want a race to the bottom on cost? Because you can’t have both. This makes it impossible to plan.

‘As businesses, we don’t have the luxury of the NHS’ magic chequebook where overspends get written off by moving money from one budget to another or where capital investments appear from nowhere.

‘The current state of pharmacy funding is not sustainable, as we’ve seen from Lloyds recent announcement of 190 potential closures.’

We want to hear your stories about how the cuts are affecting your business. Email lealegraien@cogora.com or tweet us @Pharmacist_News.

More cuts case studies:

‘We have increased dispensing volume and offset the funding reduction’

‘My business has lost at least £200,000′

 ‘I’m not confident about the future’

‘The future looks bleak for community pharmacy’


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