Report on health-care procurement 'forward-looking, ambitious'

By Jennifer Pritchett, Associate Editor

Many of the recommendations in a new report on how to optimize the quality and efficiency of Ontario’s health-care procurement strategy are “appropriate and forward-looking,” but creating a province-wide supply chain entity and the timelines around it are ambitious, says Toronto health lawyer Michael Gleeson.

“The report calls for a completely new system, a consolidation of most of the province’s health-care procurement,” he tells

“Rather than having separate hospitals or shared service organizations, there would be one entity that does the purchasing, logistics and every step in the supply chain for the entire province.”

Gleeson, a partner with DDO Health Law, notes the report, prepared by an expert panel established by the province in April 2016, sets out a strategy to consolidate the procurement process over the next three years with a recommendation to move forward with a transition board for the first year.

British Columbia and Alberta have already implemented some aspects of a province-wide system, he adds.

Ontario appointed the expert panel as part of its plan to develop a strategy to improve the delivery of supply chain management in the health-care sector, says the Ministry of Health and Long-term Care’s website.

The Ontario report, Advancing Healthcare in Ontario: Optimizing the Healthcare Supply Chain - A New Model, sets out its recommendations in a five-pillared approach that includes:

1. the creation of an “independent, transparent and publicly accountable” entity that will consolidate Ontario’s supply chain infrastructure and organizations into one integrated entity that would be funded by fees;

2. adopting patient and clinically focused buying decisions that would be aided by the establishment of clinical and medical expert advisory panels;

3. using value-based procurement and innovation;

4. performance, value, quality and improved safety — using analytics and tools to report information and insights about the performance of products and services, and adopting a bar code system to enhance patient safety through the traceability of products; and

5. appointing a 12-month transition board to move the consolidation plan forward to establish the entity’s governance structure, recruit the leadership team, new board and to put a business plan in place.

Gleeson explains value-based procurement as a “strategic approach to procurement and sourcing that considers more than just pricing.

“It also measures things such as patient outcomes and reduced service utilization," he says. "Is it a service or product that prevents repeat visits to a health-care provider? Does it increase life expectancy? Are there other economic benefits? Is it a product that can be used at each stage of care as opposed to using different products at each stage?”

Gleeson says the panel’s recommendation for mechanisms to monitor and analyze data with a view to make improvements would be a positive move forward.

“It’s gathering more information from health-care providers, patients and other stakeholders in the procurement process to make sure we have valuable intelligence about what’s being bought, where products are going, how much waste there is, and what products are most effective, so that it can inform intelligent buying decisions,” he says.

“In an era when there is such emphasis on patient-centred care, getting information about how goods and services affect patient outcomes and experiences seems appropriate and reasonable.”

While many of the recommendations make sense individually, implementing them within the timelines set out in the report will be a challenge, Gleeson says.

“I will be interested in seeing how many of the recommendations the government decides to put into practice and under what timelines,” he says. “There isn’t a firm commitment as yet from the province that all of these recommendations are going to be implemented.”

Instead of creating an entity to control all of Ontario's health-care procurement, the government could look at implementing some of the recommendations through the existing shared-services organizations, Gleeson says.

“Many of the recommendations in this report could be adopted on a smaller level by the shared-services organizations to produce some cost savings and more efficient purchasing without completely changing the system by creating the entity,” he says.

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