We recently carried the news that ADL Smartcare had won the contract to manage the national catalogue for the TCES retail model. There is a new website, but that is just the start and so we caught up with Peter Gore to find out just what the contract entails and how companies may wish to get involved.
Peter first updated us about the current position as regards the responsibility for the overall project. “The TCES team has now been disbanded” he explained. “However, the Department of Health (DoH) has appointed the London Consortium to oversee the contract and we work with them and will meet with them on a regular basis. We have various measures in place of what will represent good performance and what we are able to deliver and we will be measured on those things.”
So what exactly will Peter and his team be doing as part of the contract?
“There are five elements of the ongoing TCES agenda that we are involved with” he told me. “The first is the management of the specifications. For anyone such as a Local Authority that wishes to issue prescriptions as part of their model, then there are currently 218 prescription types that could be issued and they will be amended, added to or subtracted from over the years and it's down to us to manage that through panels and discussions with people like Commissioners. In short, we will be advising on what types of products will be going onto the list that could be prescribed.”
However, Peter says that they will not be choosing specific products. “We will be responsible for managing the specifications, not for choosing products.”
And, as Peter pointed out, the whole 218 product types are unlikely to be available throughout the UK. “Each area could, of course, take a subset of the products on the list and this is what is happening already.”
Peter went on to explain about the second key point. “The second element that we are responsible for is to set the tariff, by agreement with the DoH which is the amount that would be redeemed for the value range item on the list. And so, if a retailer has a prescription for product XYZ and he redeems it for the value range item, or minimally compliant item, then he will get paid a certain amount which we will decide. There are rules around what that pricing should be.”
Another part of the work involves the actual infrastructure. “The third element is that we maintain the infrastructure for a Local Authority to decide which of those 218 items currently on the list, it wishes to prescribe. If you take the London Borough of Southwark, for example, it currently only includes 60 of those items on the list. However, Southwark will use our infrastructure to select the ones that they do want to have on the list and then that will be available for any local retailer or member of the public to take a look to see what is being offered. All of the information is available for people to see and use free of charge.”
Organising the retailer side of the operation is also something that needs to be done as Peter explained. “We then have a list of locally accredited retailers that we will be maintaining too. In order to be able to redeem a prescription in a store, the retailer has to meet three conditions. The first is that the retailer must have a physical presence in the area that they are redeeming prescriptions. However, the interpretation of that is a little flexible as, if you have a man with a van that covers that area regularly, then that would count. The second condition is that you must be able to supply within a few days, but not necessarily have in stock; any of the items that are local prescribed and you must have at least one item that you can supply at the tariff price. Retailers can have as many items as they wish that would be a ‘top up' item and so there are lots of opportunities for up-selling. We look at this as similar to the ‘taste the difference' and the ‘value range'. You have to carry a value range item to be an accredited supplier, but it is likely that the retailer will make the money on the top up items. Finally, the retailer must have product knowledge within the outlet and must be able to decide what is or isn't suitable for a customer. Some people have interpreted this as having a ‘Trusted Assessor' but that is, strictly speaking, not a requirement.”
I asked Peter how this will be policed and how people will know that a retailer actually has the experience to be able to deal with the prescriptions. “The retailer will have to satisfy the Local Authority that they have the necessary experience. Peter suggested.
Is there a mechanism for that I wondered? “I guess that it is really self declared” Peter answered. “Local Authorities may police it in any way they choose and practice varies from area to area.”
One of the next stages is to take live a registration system as Peter went on to tell me. “Although not in place as yet, but coming in the New Year, will be a registration system for the retailers that will carry their details but also where they can pick the products off a list that match the items they can carry from the suppliers that they deal with. Once they have populated their list with what is required in their area, then, in effect, they become accreditable. That will flag up to the Local Authority that they are on the list and that may well trigger a call or visit to ensure that they know what they are talking about. What we have done is to tie the list to specific products and so, for example, if a retailer says that they are able to supply product X from supplier Y against a particular specification of an item, then they may get asked more specific questions about that product which would show that they actually do know and understand the products that they are dealing with.”
I asked Peter if he thought the process of checking would actually happen. “I don't honestly know how much of that will actually happen” he replied. “We are looking to do some work with Assist UK and possibly Age UK to allow people to share their experiences in an evidence-based way and so I think that may well turn out to be the easiest way of policing it in the longer term. So, if customers do go in and they find out that the retailer doesn't know what they are talking about, they will be able to feed back that information. Of course, also bear in mind that if a retailer does tell a customer that the product is suitable and it turns out that it isn't, then it is their responsibility. If the retailer, based on the information that they have, does the best that they can do and discharges their responsibility properly, then they are not liable and it is the Local Authority's responsibility. Actually the equipment is technically on permanent loan and so the responsibility for addressing the need remains with the Local Authority, but, if it goes wrong, the retailer is going to have to demonstrate that they raised the appropriate issues.”
And so maybe we will see something along the lines of TripAdvisor for the marketplace!
I did wonder how all this fitted in with the accreditation that has been ongoing for a couple of years now and that had been developed jointly by NAEP and the BHTA. A number of companies have signed up for and paid for accreditation through The Community Equipment Dispenser Accreditation Body (CEDAB).
“Different Local areas can make their own decision about what mechanisms they use to establish competency within the local accredited retailers as there is now no national scheme for this. Local accreditation schemes can be displayed on the system, however each local area will respect the scheme of other areas meaning that prescriptions issued in one area will be redeemable in other areas. Once accredited, then retailers will get things like stickers for the window but they won't be paying for anything connected with the accreditation programme. They won't be paying for anything like that through us. The three requirements that I set out are now the rules and retailers don't need to do anything else to be a part of the programme.”
Going back to the products, I wanted to understand more about the role in terms of product selection and pricing etc. “We don't negotiate with suppliers” Peter explained. “We will collect evidence and listen to submissions about a particular product and then we have some very specific rules with some very specific legal underpinnings as to where the tariff is positioned in the market place. If a retailer makes more than a certain margin, then, under European rules, it becomes State Aid and therefore has to be declared under State Aid rules and that just gets so complicated you just don't want to go there. It means, in effect, that the Local Authority would be giving the retailer State Aid and subsidising the retailer. It's incredibly complicated and so a legal position has been taken in terms of what seems reasonable. At the other end of course, it just becomes unviable for people to get involved with the redeeming of prescriptions and so it needs to be worth their while, bearing in mind that nobody really makes a living out of the small ADL's and it's about footfall really. Of course, that doesn't mean that they should make a loss on it either if you pitch it too low. The DoH has aspirations about what might happen to the pricing, but we believe that it is largely dictated by the market and it depends on a whole variety of circumstances. If people are able to make the items cheaper, then perhaps the prices will go down or if people are selling in the volumes that justify it, then maybe that will see prices fall, but they won't fall just because you would like them to.”
Earlier Peter had mentioned that a retailer didn't necessarily have to have a ‘bricks and mortar' presence in an area to be able to provide a prescription redemption service and that being visible with a mobile service would be enough to gain accreditation. I wondered therefore about the thorny issue of the web based businesses and whether they too would be able to get involved at any point. Would we see redeemmyvoucher.com?
“No, that's not the case at the moment, nor is that foreseen to be the case” Peter answered. “However, there are some other elements that we mention. There is a national prescription clearing service in place and there is an agreement with Citibank. Any Local Authority that is part of that and any retailers that are registered through the system, which is provided to Citibank, means that they can redeem prescriptions from anywhere in the country. And a prescription could be issued in Stockport, for example and redeemed in Exeter from an accredited retailer.”
The contract that has been awarded to ADL Smartcare is for three to five years. “It is a three year contract, extendable to five years” Peter told me.
I wondered how the company was looking to make money from the contract going forward as there is a lot of work involved in providing the service and, by all accounts, the contract was won with a pretty keen bid.
“You're right to assume that the contract doesn't deliver a huge amount in terms of revenue” Peter admitted. “The basic infrastructure is provided free of charge and so, if a retailer wants to register, they can do that free of charge. If a manufacturer wants to know whether a product that he produces is in the tariff, they clearly can do that as it is published and there is no cost for that. However, if the manufacturer would prefer us to advise as to whether the product meets the criteria, then that's not a free service and so we do provide services of different types for companies for which they will have to pay. There are basic levels at which companies can operate which will cost nothing, but if they want to do something a little more complex, then there will be a charge.”
Peter gave some instances of where revenue may be generated. “For example, there are 20 or so Authorities where we provide clinics and self assessment but having your product simply listed won't necessarily make it come up at the end of an assessment as we might not have the knowledge to match. If companies wanted their products to come up at the end of a matching process, then you would have to pay for that work. This is linked to the Smartcare system.”
He added that there are other ways in which revenue could be produced. “There is also quite a bit of interest in people benchmarking their products against other people's products and that is another service that we will offer. We can provide a national picture of what is going and, although suppliers would know which of their products were being supplied in which regions, they wouldn't know how they were faring against another supplier and we would be able to tell them that. We are not saying that one company can spy on another as we have always had a policy that we would not allow that, but we can allow a company to benchmark so that they can find out how they compare to the average for example.”
And so it seems that Peter believes the rewards for the time and money that will undoubtedly be invested will come through a series of market analysis tools that can guide the trade through the maze that is the TCES model. The contract win means that ADL Smartcare will increase significantly the amount of data produced and that will have a value.
As far as the retailers go, Peter insists that there is nothing in the programme that would mean them having to put their hands in their pockets. That doesn't mean that there might not be services that the company can offer to retailers that they might want to take advantage of as Peter highlighted. “It may be the case, as we have had already, that a retailer would want to know what the better products are in terms of matching to the demand and what they should be stocking. That is something we can help them with and we would do that piece of work for them and that would be chargeable. That would be based on a mix of what we are able to draw out from the national catalogue, but also from our own knowledge of how products match to people.”
“It isn't our role to look at how we can force people to pay us money, that isn't the purpose of the model” Peter argued. “Our role is to find things that we can offer to the trade, either on the supply or retail side, that they would regard as having real value and that they would be more than happy to pay for.”
The systems are being testing at present and will be available in the New Year when Peter tells me there will be a major push to create awareness.
The website is HERE