Value is defined as achieving the best patient-centered clinical and operational outcomes at the lowest total cost over the full care cycle. This is a considerable change from the traditional approach of focusing on attaining the lowest acquisition price. Across all of Canada, there are many practices, pieces of legislation, and trail-blazing policies that are helping to lay the foundation for value-based procurement (VBP).-By MALIBU KOTHARI

Right now, there is no mechanism to identify the procurement approach being taken by any of the local, regional, and provincial healthcare contracting authorities. There are four methodologies being examined that have been shown to provide considerable financial and non-financial value to the contracting authority and to other important groups such as the patients, the providers, the hospitals, the healthcare systems, and society as a whole. Additionally, each methodology provides potential solutions to the most difficult challenges of implementing VBP across all of Canada. These are shown via measurement and data, as well as potential partnerships between the public and private sectors.

VBP can help to support value-based healthcare (VBHC), as it evaluates the overall value of a solution or product in terms of its ability to improve patient experiences and outcomes. VBP can often help a healthcare system transition to VBHC, as the number of changes needed to implement VBP can lead to a cultural change in a healthcare system where an organization sees that it is more effective and beneficial for patients and healthcare systems to see long-term value from solutions it implements rather than just getting a product or solution at the lowest possible cost.

Four Methodologies

There are already examples of successful VBP being implemented in Canada using the four different methodologies. One methodology is the Most Economically Advantageous Tendering (MEAT), where bids are scored on price and quality, then ranked. This was used by an intensive care unit (ICU) in order to procure bloodstream infection prevention solutions. The result was that millions of dollars were saved, plus the outcome of the patients was considerably better.

A second methodology was used by the Southlake Regional Health Centre Cardiac Program to reduce their Program costs by 35% in 2017 as compared to the costs incurred between 2014 to 2015. Measured in 2021 dollars, the cost savings was equivalent to $10.5 million. Savings of that amount can make a considerable difference when it is reinvested into providing better patient access to their services, as well as improving the quality of care these patients receive when they are admitted into the Program. Other benefits included reduced readmission rates and additional capacity.

The third methodology was used by Newfoundland’s largest health authority, Eastern Health, to build 20 ongoing initiatives. These initiatives range from better managing diabetes through targets based on patient needs and evidence to improving processes related to patient flow and staff scheduling. The results from these initiatives have led to competitive dialogue, risk sharing, and fixed bundle payments, all of which have improved the care and service quality providers and staff are delivering to their patients.

The fourth methodology involves a collaboration between Plexxus, CorHealth Ontario, Ontario’s Ministry of Health and Long-Term Care, and all 12 of Ontario’s ICD-implanting centers. This led to the first provincial VBP of cardiac resynchronization therapy (CRT) and implantable cardioverter defibrillators (ICD). Thanks to the VBP framework, the total cost of a patient’s care was evaluated over his or her lifetime, leading to better value for everyone involved, from the patient and the providers to the hospitals, healthcare system, and supplier community.

More Examples of VBP in Canada

At the national level, Canada Health Network’s “Edges” are made up of groups of health authorities, home care organizations, private clinics, and hospitals to procure innovative solutions. The Canadian Collaborative Procurement Initiative (CCPI) has brought together groups of buyers across Canada so that vendors can sell to multiple organizations easily, saving both on time and cost.

At the provincial level, there are several successful VBP examples, plus a number of promising frameworks with great potential in the near future. The 2018 Public Procurement Act has allowed Newfoundland and Labrador to increase procurement practices’ transparency, consistency, and flexibility. The Quebec Life Sciences Strategy and the Public Markets Strategy has set the groundwork for integrating and adopting innovative medical technologies into the health care system once the innovation procurement framework is completed.

The province of Ontario has a multi-tiered approach to procurement. It has launched its Innovation Procurement Framework that is based on outcomes. Its Supply Ontario program, expected to be fully operational by 2023’s end, will enable the provincial government to take a more centralized procurement approach.

Alberta has been making decisions to operationalize VBP practices and approaches, looking to maximize value for patients and other stakeholders. British Columbia’s Procurement Concierge Program is promoting innovative procurement approaches so that all suppliers can participate and bring much needed innovation and technologies to all patients and stakeholders there.

Potential VBP Barriers

Despite the success and promise of VBP at both the national and provincial levels, there are some potential barriers that can hinder VBP adoption and effectiveness. The Competition Bureau’s digital health care study identified the following six barriers:

- Fragmentation - Restrictive Contracting Requirements - Price Emphasis - Risk-Averse Contracting - Long procurement cycles - Prescriptive policies

The one barrier that is the most pertinent is the price emphasis. The study indicated that there must be a collaborative effort to take the entire range of benefits into consideration, including lower costs over the long term and better outcomes for patients.

Canada’s Conference Board did its own study and came up with these VBP-exclusive barriers: - Health and Hospital System Finance Models - Provincial Funding Models - Data and Measurement - Policy and Legislation - Professional Capacity

The Conference Board suggested three ways to address the aforementioned barriers. First, establish a national innovation procurement expertise center. Second, remove all barriers to competition. Third, enact policies that encourage and support procurement processes focusing on innovation.

In addition, there need to be initiatives that renew VBP funding and encourage competition; both of these will lead to further development of VBP throughout Canada and lead to a more innovative and competitive healthcare system that will provide better overall care and outcomes for all Canadians.