Policy and Political Action

Policy & Political Action

Health Sector Supply Chain Expert Panel

The Registered Nurses’ Association of Ontario (RNAO) is the professional association representing registered nurses (RN), nurse practitioners (NP) and nursing students in all settings and roles across Ontario. We are the strong and credible voice leading the nursing profession to influence and promote healthy public policy.

We congratulate the Ontario government for taking this initiative on supply chain management (SCM) in health care. The health system invests a large amount of money on purchased goods and services, and adopting a co-ordinated approach at the provincial level has the potential to enhance the quality of care, enhance patient safety, make better use of health professionals, and save money, which can be reinvested in health service delivery.

RNAO feels that the central goal of this exercise must be to ensure the provision of the highest quality of care for Ontarians, while ensuring accountable, transparent and evidence-based decision-making to sustain Ontario’s publicly-funded and not-for-profit health system.

The structure of Ontario’s health system is on the cusp of change. If passed, Bill 210 – Patients First Act will bring about much needed improvements by helping to stimulate system integration and co-ordination. RNAO is generally pleased with the Bill, given the direction it will steer the system toward. With a provincial emphasis on integration, co-ordination and consistency, partnership, reducing duplication and maximizing investment, now is an opportune time for the province to tackle the health system’s supply chain.

RNAO advises the Expert Panel to consider avenues for a more comprehensive, system-wide strategy along the full length of the supply chain, from supplier to final use. Potential improvements include:

  • optimal choice of supplies relative to need.
  • standardization of supplies purchased to enhance ease of use and ease of transition between care settings.
  • reduced cost in purchasing (including lower purchase prices; lower administrative and negotiating costs in purchasing; and lower delivery costs).
  • more effective SCM, including tracking of inventory, monitoring to ensure sufficient but not excessive stocking of supplies, avoidance of waste due to expiry of products, and ready access to those supplies by health professionals and workers.

A number of groups of hospitals have already formed their own SCM collaborations, recognizing the numerous advantages. A broader approach could be explored -- to extend the benefits of SCM co-ordination to all hospitals and other health service organizations including long-term care facilities. It would also be valuable to take better advantage of collaboration across all activities in the supply chain. Finally, the collaboration should help individual purchasing bodies integrate SCM from end to end. That should include developing a common SCM software for health service providers and assisting individual health organizations in adapting that software to their own supply chain.

While Ontario should consider all promising SCM interventions -- it should only proceed in those areas where the analysis suggests positive net benefits would arise. And attention must be paid to ensuring that any resulting integration and standardization serves the needs of any affected organizations. That means any strategies must be adaptable to the needs of very diverse organizations, allowing necessary flexibility. For example, it would not make sense to obligate a local hospital to order a claw hammer from central purchasing when it could be bought from a nearby hardware store. To that end, we urge the Expert Panel particularly to ensure good representation of diverse organizations (differing size, geographic setting, program areas, etc) that already participate in SCM collaborations. Stakeholder consultation should include patient representatives and front-line health workers and health professionals.

Moreover, it is important to avoid pitfalls along the way. For example, the intent to implement electronic health records (EHR) in Ontario was laudable, but as the Auditor General of Ontario concluded, a considerable amount of money was invested without resulting in a fully functioning EHR system. Lessons from Ontario's eHealth experience must be followed closely. Recommendations from the Auditor General are germane to the SCM exercise:

  • "Develop a strategic plan for implementation of electronic health records.
  • Improve oversight by board of directors.
  • Rely less on outside consultants
  • Ensure procurement policies are followed."

RNAO strongly opposes stretching the proposed SCM strategy into unhelpful areas, such as outsourcing that re-allocates service delivery and/or management from the public sector to the private sector. The Auditor General of Ontario has identified the significant cost of public-private partnerships in the financing, construction and operation of infrastructure. Bringing in external consultants is another form or outsourcing -- a practice that, if done excessively or indiscriminately, can not only be costly, but negates the talent of Ontario’s public service.

RNAO Recommendations:

  1. Proceed with health system structural reform (e.g. Bill 210), to enable system integration and co-ordination.
  2. Develop a provincial strategy on SCM in the health system that incorporates as many sectors and as much of the supply chain as are economically efficient and serves the needs of affected health organizations.
  3. Ensure that the Expert Panel's consultation is sufficiently broad that the full diversity of health organization needs and patient needs are adequately understood.
  4. As part of that strategy, implement province-led purchasing of as many classes of commodities as are warranted, given the objectives of the program. Consider using different purchasing models, depending upon the market structure in given product markets.
  5. Provide as much evidence-driven expert review of supply options as possible.
  6. Effect as much standardization of purchased commodities as warranted by effectiveness, economic considerations and as allowed by considerations of flexibility and need facing health service organizations.
  7. Consider all of the following objectives when designing a SCM strategy:
    • quality of care
    • health care experience
    • long-run cost savings, which in turn can yield more spending on essential health services
    • quality of work life in health care
    • labour standards among suppliers in health care
    • environmental standards (in health care and among suppliers)
    • economic benefits for the health sector and for the province
  8. In cases where there is a choice between for-profit and not-for-profit vendors/providers, preference should be given to not-for-profit vendors/providers. Expand access to not-for-profit health service delivery.
  9. With respect to phasing in of supply chain management collaboration, use the following criteria for prioritization:
    • degree of consensus;
    • ease of implementation;
    • probability of success; and
    • expected gains
  10. Ensure independent strong oversight of any agency that co-ordinates SCM in Ontario. Any co-ordinating body should either be a public or a not-for-profit agency. To maintain transparency and accountability, the government of Ontario, through legislative or other means, should take those steps necessary to ensure that:
    • group purchasing organizations and shared services organizations are subject to all aspects of the Broader Public Sector Accountability Act, 2010;
    • the salaries of employees and executives of group purchasing organizations and shared service organizations are reported under the Public Sector Salary Disclosures Act, 1996;
    • group purchasing organizations and shared services organizations are subject to audits by the Office of the Auditor General of Ontario; and
    • public reporting adequately explains the scope and nature of the coordination of SCM in Ontario. 

See the full submission with references below.
*Last updated 8/5/2016

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