The region’s 13 hospitals are joining forces to save what they hope is millions of dollars.
The Northern Supply Chain initiative has already realized a savings of $1 million, says Scott Potts, the executive vice-president of corporate and diagnostic services at Thunder Bay Regional Health Sciences Centre.
“Basically it’s all about strategic sourcing and procurement, going out to (request for proposal) as a group, where you’ve got a much bigger critical mass to spend. You’re just generating that type of savings. You’re standardizing contracts, you’re standardizing products and we’ve had some great early success,” Potts said on Wednesday.
Essentially it’s a buying group, Potts added.
“There’s a lot of commonality to the things that hospitals buy, so there’s an opportunity of consolidating that purchasing, doing it at once and getting better pricing from the suppliers and other service providers.
“And we also are leveraging the national group purchasing organizations as well. So we don’t have to do it all. We’ll leverage the expertise that we can,” he said.
The program, which includes St. Joseph’s Care Group and 11 other hospitals throughout Northwestern Ontario, began last November.
Grant Rowson, the administrative director of financial services and information technology at Dryden Regional Health Centre, said for smaller institutions, it’s a chance to realize significant savings riding on the coattails of larger centres like the hospitals in Thunder Bay.
“The amount of requests for proposals that we do within one year is about what they do in one month at the Thunder Bay Regional Health Sciences Centre,” Rowson said.
“So essentially we’re tackling a lot of RFP contract expertise. There’s a lot of common things that various hospitals by. So while we’re trying to buy a certain supply from someone, so is the next hospital. So we get in on a group contract together and there’s cost savings, there’s efficiencies, there’s administrative savings. It just makes things easier.”
Given new direction from Queen’s Park to hold expense increases to a maximum of 2.5 per cent annually, Rowson said the savings can be used to do what hospitals do best.
“When you think about it, every administrative dollar that you’re spending in the health sector, one could argue is another dollar not available for front-line care,” he said.
“This is a no-brainer scenario, that if we can cut out some of the costs we can make it more efficient. It’s just simply making better use of taxpayer’s money.”
The savings can be realized on everything from common medical supplies to group benefits for employees.
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