Keeping the Patient First
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1 Keeping the Patient First A Dialogue with Suppliers May 2011
2 Keeping the Patient First Supply chain consolidation and cost savings are driving significant change in the health system. Keeping the patient first throughout the broader health value chain will be critical to long-term success in outcomes for patients and the health system Health Supply Chain Changes Impact on the Provider and Supplier Communities Impact on Patient Outcomes Implications for the Industry We are eager to engage the audience today in dialogue on these topics, and will be using electronic polling to ask questions throughout the session
3 Health care systems and supply chain models are evolving across Canada, increasing the importance of performance management Health system consolidation and change is underway across the country: YK Lower Mainland Consolidation and GPO Alberta Health Services and GPO BC NWT AB Patient First Review SK NU MB ON QC NL PEI NB NS SSO Implementation and LHIN IHSP/CSPs Increased Focus on Supply Chain Consolidation Back-Office ERP Implementation RHA Structure and SSO Implementation Supply chain consolidation is driving significant spend savings targets, which will require a renewed focus on the management of system level performance and patient outcomes - 3 -
4 The changing landscape will drive changes in supply chain performance management, relationships and the impact on patients Performance enhancement will need to be a focus across the supply chain to enable improved patient care, which has implications for key stakeholders: Government, Health Providers and Shared Service Organizations Improved supply chain savings / Increased buying power Improved access to care and/or bottom-line operating savings Changes to business model, ownership and operations Changes to end-user experience Increased expectations to deliver on savings and customer experience GPOs Increased buying power Increased customer complexity Increased expectations for savings Suppliers Consolidation of buyers Change in relationships Pricing pressures and buying sophistication Increased supply chain complexity - 4 -
5 A focus on cost can t lose site of the supply chain as an integral component of the broader health value chain As cost pressures and savings targets continue, consideration of the value chain and ecosystem that drives patient outcomes will be an important decision-making factor Improving Patient Outcomes Product Selection Sourcing Order Processing and Entry Production, Inventory and Packaging Care Unit Storage and Inventory Dispensing and Care Delivery Improving Patient Experience As an integral component of the value chain in improving patient outcomes and the patient experience, the supplier community can have a significant positive impact on service delivery beyond traditional cost evaluation - 5 -
6 Pricing pressures and reduced margins create risk in the ability of suppliers to fully contribute to the value chain Impact on Suppliers Reduced Investments in Research and Development Changes to Relationship Model with Clinicians and the Organization Decreased Ability to Support Clinician Education Diminishing Role in Improving Patient Care and Outcomes Increased Focus on Procurement, Logistics and Planning Rigor Decreased Flexibility in Driving Innovation Increased Cost of Doing Business and Changes to Canadian Labour Pool - 6 -
7 Evolving the supply chain to optimize patient outcomes will need a systems approach and partnerships across supplier and providers Traditional Supply Chain Initiatives Sourcing Initiatives Establish formal supplier negotiations and RFP processes Consolidate spend across health care institutions to increase negotiation power Establish a single point of contact protocol to formalize the sourcing process Procurement Initiatives Establish centralized procurement offices Leverage procurement technologies Logistics Initiatives Establish a centralized distribution model Optimize inventory requirements at the centralized DC level (if applicable) and at the hospital storage locations Leverage 3PLs when required to best manage the distribution and/or transportation efforts to member institutions. Partnership Initiatives Keeping the focus on patients and outcomes first Assess total systems cost of ownership of products and services Integrate clinician relationships and discussions into the sourcing process Move to a synchronized model with key partners/buyers - 7 -
8 Improved Patient Outcomes The advancement of providers along the health supply chain maturity curve suggest an appetite for enhanced supplier dialogue As health organizations continue to optimize their supply chain and target savings, continued efforts to improve patient outcomes will be critical to success Understanding performance through the maturity model today will help to set the foundation for increased collaboration and performance along the supply chain in the future, shifting organizations up a supply chain maturity curve working more collaboratively with the supplier community can help health care organizations to accelerate their progression along this curve. Stage 4 Baseline Planning and Data Stage 1 Foundational Discipline Stage 2 Advanced Sourcing and Procurement Stage 3 Integrated Supply Chain Strategy, Planning and Execution Synchronized Supply Chain Provider-Supplier Supply Chain and Relationship Maturity - 8 -
9 Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services through more than 7,700 people in 57 offices. Deloitte operates in Québec as Samson Bélair/Deloitte & Touche s.e.n.c.r.l. Deloitte & Touche LLP, an Ontario Limited Liability Partnership, is the Canadian member firm of Deloitte Touche Tohmatsu. Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms. Deloitte & Touche LLP and affiliated entities
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