VALUE-BASED PROCUREMENT PERSPECTIVES
An article from the Insights Series
An article from the Insights Series
Neil Fraser, president of Medtronic Canada and regional vice-president – Canada, Medtronic plc
In Canada, I am often asked to speak about value-based procurement. Given our single-payer provincial healthcare systems in Canada, the importance of getting procurement right here is profound. I’m interested in the topic because it can help improve patient access to new therapies (e.g., leadless pacemakers and stent retrievers for stroke), and it could potentially serve as an enabler for value-based healthcare models.
Value is defined as patient outcomes relative to the cost to deliver those outcomes. Value-based procurement then is making purchasing decisions that consider how a product or solution can best deliver the outcomes being measured and reduce the total cost of care — rather than focusing exclusively on purchasing a specific product at the lowest possible price.
For context, 10 years ago, physicians decided what medical device was right for their patients.1 For example, if a patient needed a pacemaker, his or her doctor might consider factors such as age and the likelihood of needing an MRI. To curb the rising cost of healthcare and standardize the process of procurement, hospitals have since relied more heavily on procurement professionals to make purchasing decisions. The consequence is that a doctors’ ability to get his or her patients access to a given pacemaker — e.g., a leadless pacemaker — is dependent on the outcome of a tender.
Healthcare procurement professionals tend to work in isolation from the clinical environment, physically removed from what the hospital is doing. Over time the focus on cost reduction has been taken to such an extreme that clinical benefits and long-term value are often deprioritized for the sake of short-term savings.
Progressive health systems in Canada are starting once again to include physicians in decision-making to better understand the usability and clinical outcomes of products and services. At the same time, hospitals and procurement organizations are trying to better understand the concepts of value-based healthcare. And at Medtronic, we are committed to bringing together key stakeholders — from procurement professionals to patient advocates — to help ensure our products and services are benefitting the entire system.
This is the case in Ontario, where innovative procurement models have emerged thanks, in part, to the emergence of competitive dialogue, which allows hospitals to go to tender for a solution (rather than just a product). Competitive dialogue also means they can discuss that solution with suppliers during the tender process.
Innovative Procurement at Southlake Regional Health Centre
Ontario's Southlake Regional Health Centre engaged in competitive dialogue and innovative procurement to achieve better value.
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Implementing value-based healthcare and procurement is challenging. But it is possible. For Medtronic, it is integral to achieving our mission to alleviate pain, restore health, and extend life. More importantly, the patients we serve deserve it.
Neil Fraser is the president of Medtronic Canada and regional vice-president — Canada, Medtronic plc. He is also the chair of MEDEC, a board member of Baycrest Health Sciences, and member of the Federal Health and Biosciences Economic Strategy Table (ISED/Health). In 2014, he was a member of the federal advisory panel on healthcare innovation and the Ontario Health Innovation Council. Neil is a frequent speaker on the topics of value-based procurement, outcomes-based healthcare, and the medical device sector’s role in improving clinical outcomes, economic value, and access to quality healthcare.