Healthcare procurement in Ontario: The challenges for innovation
Medical technology companies in Ontario have to go through an intensive procurement process with individual healthcare institutions before seeing their innovations implemented and impacting patient care.
How can we find collaborative ways to work within this process, so that innovators can better navigate the challenges of the system?
Over the past few years, there has been increased scrutiny regarding how public funds are spent in Ontario. Both government and the public have growing expectations for healthcare organizations (among others) to operate with accountability and transparency.
The Broader Public Sector Accountability Act, 2010 brought in new rules and accountability standards for the Broader Public Sector, including directives setting out rules for procurement and expenses. The procurement requirements are detailed in the BPS Procurement Directive.
As a result, healthcare organizations have developed and implemented standardized procurement policies and processes, leading to increased efficiency, financial control, quality and value for money. Further benefits include risk mitigation on behalf of the organization, greater discipline and accountability in procurement activities, and a better balance between clinical and business requirements. In some circumstances, the impact is a combination of the new policies and procedures plus greater centralization of procurement (e.g., through the creation of shared services organizations).
Suppliers are also experiencing benefits as a result of this evolution in healthcare procurement processes. These benefits to industry include:
- Fair and transparent processes that equalize opportunities
- Standardized documentation & processes (creating efficiencies within supplier organizations)
- An emphasis on the importance of the evaluation process in creating fair and transparent outcomes for procurement initiatives
An interesting dichotomy arises from the application of more stringent evaluation criteria and their impact on the introduction of alternative and innovative technology. Advances in technology are critical because they typically have a positive impact on both patient outcomes and total health economics, but current processes may hamper their introduction. Measurable, clearly delineated evaluation criteria are essential to a fair evaluation process, enabling respondents to develop submissions that better address an organization’s requirements.
The flip side is that this approach limits an organization’s ability to evaluate new technology or alternative strategies that may be proposed because it is very difficult to develop criteria that measure the unknown.
The good news
There are various initiatives underway in the healthcare sector that seek to address this dichotomy in a way that respects procurement process requirements while enabling a faster introduction of innovation, with a goal to positively impact patient outcomes and health economics in Ontario.
For more information on the procurement process and its impact on innovation, be sure to attend the fourth annual MaRS Future of Medicine conference on November 15, 2012.
Sarah Friesen is president of Friesen Concepts Inc. She specializes in healthcare procurement solutions, with a focus on strategic sourcing transformation and professional development. She sits on the boards of Shared Services West and HTX. See more…