Annual Report 2014

Annual Report
2014
Member Driven. Quality Focused.
Medbuy AR 2014 - FINAL.indd 1
2015-06-10 11:30 AM
Our Promise
Vision
As a healthcare strategic sourcing
organization, Medbuy leverages clinical
expertise and maximizes buying power
to offer quality products at the best
price. We foster an environment where
our Members collaborate, share best
practices, and ultimately, make decisions.
To become Canada’s preferred
national GPO in healthcare.
Above all, the patient is at the
centre of everything we do.
Mission
To provide maximum value to
Members by driving costs out
of the healthcare system.
4056 Meadowbrook Drive, Unit 135, London, ON N6L 1E4
www.medbuy.ca
2 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 2
2015-06-10 11:30 AM
2014
BOARD OF
DIRECTORS
Our Board of Directors is representative of our membership,
incorporating size, geography and type of facility into its composition.
Our Shareholders elect the Board, which has the responsibility
of guiding the organization and ensuring that the needs of the
membership are always top of mind.
Sarah Chow
Chair
Natalie Hovey
Vice President Finance and
Information Management
Lakeridge Health
Angela Zangari
Vice Chair
Executive Vice President,
Finance and Operations
Niagara Health System
Michel Leger
Independent Board Representative
New Brunswick
Shawn Gilhuly
Secretary, Treasurer
Vice President, Finance
and Chief Financial Officer
London Health Sciences Centre
Sarah Padfield
Vice President and
Chief Financial Officer
Chatham-Kent Health Alliance
Joey Caissie
Director of Special Projects
Vitalité Health Network
Andrée Robichaud
President and Chief Executive Officer
Thunder Bay Regional Health
Sciences Centre
Kelly Campbell
Vice President, Corporate Services and
Chief Planning Officer
Hamilton Health Sciences
Andrea Seymour
Chief Operating Officer
Horizon Health Network
Tony Dagnone
Independent Board Representative
Ontario
Nick Vlacholias
Senior Vice President
and Chief Financial Officer
Children’s Hospital
of Eastern Ontario
Gordon Gilman
President and Chief Executive Officer
FacilicorpNB
www.medbuy.ca 3
Medbuy AR 2014 - FINAL.indd 3
2015-06-10 11:30 AM
Message from the
Board Chair and the CEO
4 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 4
2015-06-10 11:30 AM
This past year,
Medbuy’s Board of
Directors completed
a governance
renewal process to
optimize the Board’s
ability to support
Medbuy’s Strategic Plan and future
growth aspirations. I would like to thank
our Board and Shareholders for their
support and commitment throughout
the process. I believe the changes that
emerged will set us on a course of
continued success in the coming years.
buying power to offer quality products at
the best price is more important than ever.
The healthcare landscape is evolving;
however, the need for quality patient care
remains the same. As healthcare facilities
are being asked to do more with less, the
value Medbuy offers in maximizing our
Medbuy is about to embark on a new
strategic planning process to guide the
organization over the next three years.
This represents an exciting prospect for
Today our Members
face unprecedented
pressure to contain
costs within their
organizations while
continuing to deliver
quality patient care.
As a trusted service provider, it is more
important than ever that we challenge
ourselves to find new ways of maximizing
the value we bring to our Members while
upholding the highest standards of quality
and safety.
and every one of our Members.
One of the steps we took last year to
achieve this goal was creating a new
Hospital Relations team, which is tasked
with engaging with Members directly in
their facilities, working with each Member
to drive greater value. We believe that it is
important to be attuned and responsive to
the needs of our Members at the individual
facility level, and our Hospital Relations
team will play an important role in ensuring
we are providing quality service to each
As Members, we recognize the benefit
of Medbuy Membership. Together, we
utilized Medbuy contracts valued at more
than $680 million in 2014 to purchase
over 115,000 different products needed to
deliver quality, safe care to our patients.
Through innovative contracting and
value-added services, Medbuy empowers
us to maximize efficiencies, adhere to
government procurement regulations,
learn best practices, and meet our supply
chain needs.
Risk remains a central concern for us at
Medbuy, and I am proud to report that we
are actively engaged in the “high reliability
organization” approach to sourcing that
we embarked on last year. A key part
of this was the implementation of our
Medbuy Clinical Product Risk Rating
Tool©, a risk assessment screening system
which we have integrated fully into our
operations.
Security of supply is another key priority
for us. We are active participants in the
national Multi-Stakeholder Steering
Committee on Drug Shortages, which is
contributing best practices for addressing
scarcity within the drug supply chain; and
we have implemented contract strategies
and processes for mitigating and
managing potential vulnerabilities.
With rising demands on our healthcare
system, there is incentive to embrace
innovation that will drive value and
Medbuy, as it offers an opportunity to
reflect on the changing environment in
which the organization operates. I am
optimistic that by proactively assessing
the evolving needs of our Members,
and new opportunities in the healthcare
system, Medbuy will continue to play
a valued role supporting Canada’s
healthcare supply chain with innovative
solutions.
I would like to thank the Board of
Directors, the Member Committee
representatives, and the Medbuy team for
their continued commitment to excellence
in meeting our health system’s supply
chain needs.
Sarah Chow
chair, board of directors
sustainability. We recognize that as
a GPO, we have a role to play in the
adoption of innovation within the
healthcare system, and our evolving
contract strategies will continue to reflect
this shift.
We completed many sourcing initiatives
last year, several of which resulted from
new approaches we developed for going
to market. These innovative strategies
created conditions that allowed for a high
degree of choice and autonomy, as well
as access to new technologies, while
securing substantial contract savings.
I would like to thank Sarah Chow and our
Board of Directors for their contributions
over the past year. I look forward to
working with you to ensure Medbuy
remains a valued service provider to our
Members.
Kent Nicholson
president & ceo
www.medbuy.ca 5
Medbuy AR 2014 - FINAL.indd 5
2015-06-10 11:30 AM
2014 FINANCIAL HIGHLIGHTS
222
$
MILLION
ANNUAL SPEND
TAKEN TO MARKET
20
%
AVERAGE ANNUAL
SAVINGS ON SOURCING
INITIATIVES TAKEN TO
MARKET IN 2014
44.4 1.12
%
$
MILLION
IN ANNUAL SAVINGS ON NEW
AND RENEWED CONTRACTS
OPERATING EXPENSE RATIO
OUR OPERATING EXPENSE RATIO
REMAINS BELOW THE 5-YEAR AVERAGE
OF 1.13%, DESPITE INVESTMENTS IN
CLINICAL AND SOURCING TEAMS.
6 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 6
2015-06-10 11:30 AM
CONTINUED GROWTH AND SAVINGS
EXISTING MEMBERS CONTINUE TO GROW
Over $680 million in contract purchases by our Members in 2014
Capital:
$22.5M
700
600
$ MILLIONS
500
Medical/Surgical:
$345.5M
400
300
200
Pharmaceuticals:
$321M
100
0
2009
2010
2011
2012
2013
2014
SOURCING INITIATIVE SAVINGS (ANNUAL SAVINGS 2011-2015)
Members have realized nearly $90 million in savings just in new initiatives since 2011
90
80
70
$ MILLIONS
60
50
2014
40
2013
30
2012
20
2011
10
0
2011
2012
2013
2014
2015
www.medbuy.ca 7
Medbuy AR 2014 - FINAL.indd 7
2015-06-10 11:30 AM
We completed a number of significant sourcing
initiatives last year, including our Orthopedic Total Joints
RFP in summer 2014 and Cardiac RFP in winter 2014.
These two sourcing initiatives alone represent $110
million in savings for our Members over the next 5 years.
VALUE DELIVERED TO THE HEALTHCARE SYSTEM
PROJECTED MEMBER SAVINGS OVER THE NEXT 5 YEARS
40-45
%
CARDIAC PRODUCTS
31
%
BASIC WOUND CARE
41
%
CLOSED WOUND DRAINAGE
40-45
%
ORTHOPEDIC TOTAL JOINTS
8 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 8
2015-06-10 11:30 AM
Innovative sourcing strategies
address evolving needs
“This RFP was a great
innovative sourcing strategy
in that it offered the best
of both worlds – clinicians
selected products based
on their clinical needs
and technology, while the
institution secured great
value. This was a true value
for money approach. Our
clinicians were astounded
at the savings, and the
experience underscored just
how valuable it is to be a
part of a GPO.”
Elio Rotondo
senior manager,
supply chain operations
the hospital for sick children
Our Cardiac RFP completed in December 2014 was the first initiative in which
we utilized a new split award strategy for dealing with products of high clinical
sensitivity. The initiative generated great success: we achieved significant
savings, met the need for choice in this category, and paved the way for
greater access to new technologies.
Under the split award strategy, we created an RFP environment where suppliers
were invited to compete for market share of the total Member spend. This approach
enabled us to secure great savings while offering a high degree of flexibility and choice
for our Members, who were able to purchase the products they need.
From a clinical perspective, Members were given the autonomy to decide what
would work best for their facility based on their clinical needs and the types of
patients they care for. The attractiveness of this flexible RFP framework enabled us
to increase participation significantly from the previous contract, and generate
substantial savings while adhering to provincial procurement regulations.
With rising demands on our healthcare system, there is a heightened interest in
new technologies that will drive value and sustainability. We recognize that as a
GPO we have a role to play in the adoption of innovation within our healthcare
system, and our evolving contract strategies reflect this shift.
By continuing to adapt our contracting strategies, we are ensuring Medbuy
is equipped to respond to risk; we are meeting our Members’ needs for
choice, and we are facilitating the adoption of new technologies within the
healthcare system.
CARDIAC RFP
AT A GLANCE:
• Used split award
• Took $110 million in
life cycle spend to market
• 40 - 45% savings achieved
www.medbuy.ca 9
Medbuy AR 2014 - FINAL.indd 9
2015-06-10 11:30 AM
member driven
20
14
HIGHLIGHTS
Funded 9 industry research projects
Medbuy contributed to nine research projects in 2014
through our R.E.D. Fund sponsorship program, with a
focus on projects that emphasized enhanced patient care
and safety. Sponsored Member facilities include: CHEO,
Hamilton Health Sciences Centre, and St. Michael’s
Hospital.
Ranked “best overall performance”
by the supplier community
For the second consecutive year, Medbuy was ranked
number one overall by suppliers in the Advantage
ReportTM Mirror – Healthcare 2014, which compared the
performance of 15 unique buying groups across Canada,
including GPOs and SSOs. Productive collaboration with
our suppliers means superior service and value for our
Members, who benefit from the secure relationships we
have developed.
Hosted Member CNOs & CMOs
at 26th IHI National Forum
Medbuy hosted 20 Chief Nursing Officers and Chief
Medical Officers at the 26th IHI National Forum in
Orlando Florida, providing the opportunity to learn the
latest improvement ideas, connect with over 4,000 health
care professionals, and generate momentum for change in
health care quality and safety.
10 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 10
2015-06-10 11:30 AM
Hosted Pharmacy Fall Education Day
140 contracts signed
Medbuy’s Pharmacy team hosted its annual Fall
Education Day in November 2014. This year’s topic
of focus was current and anticipated standards for
sterile compounding. Sixty pharmacists and pharmacy
technicians from Member facilities attended the day-long
event of learning, knowledge-sharing and networking.
2014 was a busy year for Medbuy: we issued 50 RFPs,
and signed 140 contracts for medical/surgical and
pharmaceutical products for our Members. We took
$222 million in annual spend to market and secured an
average of 20% savings for Members.
Completed over 250 product validations
with Clinical Expert Groups
Hosted 2 successful joint Committee Meetings
Medbuy’s Clinical Services team worked with Member
Clinical Expert Groups to conduct over 250 product
validations – a scale of activity which speaks to the
commitment of our Members’ clinical representatives
to securing quality products for their patients.
We hosted two highly productive joint Committee
Meetings in 2014, bringing our Members together in
London, Ontario, and St. Andrews, New Brunswick,
for two-day working sessions in the spring and fall,
respectively. Attendees had the opportunity to collaborate
with colleagues on best practices and shared goals, and
discuss changing industry trends.
www.medbuy.ca 11
Medbuy AR 2014 - FINAL.indd 11
2015-06-10 11:30 AM
member driven
Medbuy’s full-service offering
New Hospital Relations team launched
We are committed to providing superior service to our Members, and a key
component of this is strengthening engagement with Members at an individual
facility level. This past year we established a new Hospital Relations Team
focused on bringing our services to Members in their facilities on a regular basis.
This level of direct interaction will be an effective way to reach out to Members
to understand their needs, ultimately helping us drive greater value for our
Membership.
The first member of the team is Ruby Hartsell, who has accepted the position of
Director, Hospital Relations. In addition to providing service to Members, Ruby
will build and mentor the Hospital Relations team based in Ontario and Atlantic
Canada.
The Hospital Relations team is tasked with meeting with Members in person
to directly address any service issues, concerns or opportunities. They will also
work with each Member facility to develop customized plans for engagement
with Medbuy to ensure each of our Members receives the full value of their
membership. Our Hospital Relations team has already begun to visit Member
facilities and will focus in 2015 on developing formalized plans for each Member.
Ruby Hartsell, Director Hospital Relations
In addition to the Hospital Relations Team, we continue to provide a
comprehensive suite of services to our Members through our IT, Spend Analytics
and Member Services programs.
Information Technology (IT)
Our IT team worked closely with Members
this past year to enhance our eCatalogue
(“the eCat”), giving convenient access to
information about purchase volume,
contracts, products, and spend data.
We have responded to Member feedback and
requests by focusing on features that create a
user-friendly process, giving Members autonomy
when accessing their contract information.
We have continued to see a positive trend in
usage of the eCat, and look forward to working
with Members in the coming year to further
enhance their digital experience.
Member explores eCat features with Medbuy Network Administrator Scott Houle
12 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 12
2015-06-10 11:30 AM
Member Services
Our team of customer service and procurement specialists
is dedicated to supporting our Members. Key services include:
• On-boarding of Members
• Participation optimization
• Member-supplier liaison
• Custom reporting
• Provision of product/contract information
This past year, we made significant progress with our
onboarding of HealthPEI, Northwest Supply Chain,
as well as 40 nursing homes in New Brunswick
(new FacilicorpNB Associates).
Member Services Team: Karen Noble, Lisa DeBruyne, Val Valle, Tracy Burwell and Dawn Bouffard
SPEND ANALYTICS PROGRAM
More and more Members are harnessing the power
of their data through our Spend Analytics program,
which includes:
• identifying and reducing off-contract spending
and invoice price discrepancies to maximize
value from savings opportunities
• access to reports and data for ongoing analysis
of their spend practices.
Four Member hospitals joined our Spend Analytics
program in 2014: SickKids, Nipigon District Memorial
Hospital, St. Joseph’s Care Group, and Hamilton
Health Sciences Pharmacy. over 95% of our Members
are now utilizing this valuable program.
SPEND ANALYTICS OVERVIEW
Data Collection
Data Analysis
Opportunity Review
• Integrated data feed provides
Members’ spend information to
Medbuy on a scheduled basis.
Dedicated Spend Analysts using
proprietary tools and technology to:
Price Discrepancies:
Are you paying the right price?
• Cleanse, validate, enrich, classify
spend data across multiple,
disparate systems
Volume Discount Audit:
Did you get the right discount?
• Easy implementation with little
impact to Member.
• Experience implementing most
major hospital information systems.
• Conduct ongoing analysis to identify
spend patterns and cost reduction
opportunities
Channel Change:
Are you purchasing from the
right supplier and on contract?
Identify new contract opportunities:
Increase your spend under contract
www.medbuy.ca 13
Medbuy AR 2014 - FINAL.indd 13
2015-06-10 11:30 AM
member driven
Capital and Food
& Nutrition Offerings
“We are thrilled to be
offering such a significant
‘value add’ to our Members
through this tool. Bonfire
will considerably improve
our Members’ experience
as they work through the
validation process, giving
them the flexibility and
autonomy they need to
manage their own projects.”
Jay Ayres
director,
st. joseph’s health system, gpo
Medbuy is proud of our partnership with St. Joseph’s Health System, GPO
(SJHS-GPO), Canada’s first and only GPO dedicated specifically to Capital
Equipment and Food & Nutrition procurement, offered through two core
programs: CAPsource and MEALsource.
In 2014, SJHS-GPO saw continued growth, adding several new product
categories to its service offering. We also saw growth in membership to
the CAPsource program, welcoming the province of Prince Edward Island,
Kingston General Hospital, as well as 45 long-term care facilities recently
added to FacilicorpNB (an existing CAPsource Member).
A key area of focus over the past year was streamlining and enhancing
processes to optimize the user experience for Members, which included
implementing a new digital evaluation tool. The SJHS-GPO team worked
closely last year with the creators of Bonfire, a web-based procurement
tool, to streamline supplier proposal submissions and Member evaluation
processes. This enhanced tool will greatly improve the Member experience
working through the evaluation process, as it provides a faster and more
efficient way to evaluate RFP submissions digitally.
14 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 14
2015-06-10 11:30 AM
quality focused
Medbuy Clinical Product Risk Rating Tool©
An “HRO” approach to quality and safety
In 2013 we announced the launch of a highreliability organization (HRO) approach to sourcing
to anticipate and contain risk. Now two years in, we
are proud to be living the HRO principles, through
the integration of our risk assessment tool, the
Medbuy Clinical Product Risk Rating Tool© into
our sourcing processes. By using the tool to rate
each and every product we review, a specific course
of action for sourcing is followed that reflects the
clinical sensitivity of the item.
The risk assessment tool is not only for Medbuy
use, but for our Member facilities as well. The tool’s
rating scale can be used to drive sourcing strategy
and reduce or modify risk throughout a hospital,
which can have a significant impact on patient
safety. We look forward to sharing this tool outside
our membership to benefit the healthcare industry
as a whole.
Clinical Engagement
Last year we continued to integrate our
Clinical Services team into our validation
and scoring processes. The Clinical
Services team was actively engaged with
clinicians clinicians at our Member facilities
throughout this past year to facilitate
sourcing activities, conduct product risk
rating, develop scoring criteria, assist
facilities in sourcing products for managing
potential Ebola cases, and advise Members
on a variety of product safety questions.
The team was also available to review and
evaluate new technologies introduced by
suppliers.
www.medbuy.ca 15
Medbuy AR 2014 - FINAL.indd 15
2015-06-10 11:30 AM
Contributing to
Industry Research
We continued to support the development of research that
contributes to patient safety and quality improvement as well
as industry best practices. Last year we supported nine research
projects led by our Members. In addition, we continued our longstanding support of CAPHC’s patient safety and quality initiatives,
including its Inhaled Nitric Oxide Collaborative (iNO). The
latest work of the iNO Collaborative has resulted in two sets of
guidelines for inhaled nitric oxide in the neonatal and paediatric
populations.
Developing national standards will positively impact patient safety
for this highly specialized population of patients, while contributing
to operational efficiency for hospitals across Canada.
Member Research Projects
Supported in 2014
• Implementation of a Prospective Radiology
Quality Assurance Peer Review System
(Hamilton Health Sciences)
•T
he feasibility of Stress-First/Stress-Only Myocardial
Perfusion Imaging to reduce patient radiation exposure
in a selected subset of patients undergoing testing
in a tertiary care facility (SFSO-MPI)
(Hamilton Health Sciences)
•M
edication Safety Pictograms for Safe Handling of
Drugs by Health Care Workers (CHEO)
•R
ecall of Sickle Cell Disease Pictograms used in the
Sickle Cell Action Plan and Prescription for Children
(CHEO)
•M
easuring the Benefits of Embedding a Radiologist
in the Juravinski Hospital Emergency Department
(Hamilton Health Sciences)
• Development of a smartphone application/app
to improve prescribing of antibiotics
(St. Michael’s Hospital)
A call for Member research proposals is issued in September of
each year. Through our website, we offer Members a digital archive
of abstracts from previous research supported by our Research,
Education and Development Fund. The archive offers a knowledge
sharing tool for accessing industry research conducted by
our Members.
• Proposal to Implement Online Education and
Training to Accompany the Medical Imaging Primer
with a focus on X-Ray Usage and Safety
(Hamilton Health Sciences)
•T
he Use of Natural Health Products in Pediatric
Patients in Respite Care (CHEO)
•P
arenteral to Oral Conversion of Antibiotics at
the Pediatric Intensive Care Unit of the Children’s
Hospital of Eastern Ontario (CHEO)
16 MEDBUY ANNUAL REPORT 2014
Medbuy AR 2014 - FINAL.indd 16
2015-06-10 11:30 AM