wp-143086 - Scaling VBP in Canada

Scaling Value-Based Procurement in Canada

A Research Series

December 7, 2022

Defining VBP in the Canadian Context

Value-based procurement is generally accepted as being an approach to procurement that incorporates the principles of VBHC. It does this by focusing on acquiring products, services, and solutions that bring the greatest value, rather than focusing on the lowest possible acquisition price. Value is measured as the best clinical, patient, and operational outcomes at the lowest total costs over the full care cycle.

We need to find some ways—not just through taxpayer dollars—to catch up on surgical backlogs. By reinvesting the savings generated through VBP, we avoid having to invest more net new resources to help pay for some of the necessary augmentation of care.

Arden Krystal, President and CEO, Southlake Regional Health Centre

In 2019, we established Value-Based Healthcare Canada, a research centre dedicated to leading evidence-based research into the systematic implementation and integration of value-based healthcare in Canada.

Setting the Stage

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Read the Part 1 issue briefing, Setting the Stage.

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Different Is Necessary

Exhibit 3

Multi-pronged Strategy for Scaling Value-Based Procurement in Canada

*Or other actions including, but not limited to, procurement directives, standards, and guidelines. Source: The Conference Board of Canada

There are outstanding examples of methodologies and applied frameworks that are advancing the integration of system-level VBP in Canada. Our research highlights four methodologies that can help increase the value of healthcare investments at different procurement levels. Each approach generated considerable value in the form of financial and non-financial advantages for the contracting authority and benefits across stakeholder groups.

Every day, hundreds of thousands of Canadians access healthcare services. Many are undergoing critical life-saving procedures, while others are receiving important routine and follow-up care. With their incredible training and practice, clinical and professional healthcare teams play the leading role in delivering safe and effective care to Canadians. In support, medical technologies contribute to standards of care and clinical excellence that together ensure patient safety at the point of care. Value-based healthcare (VBHC), inclusive of applied value-based procurement (VBP) practices, is an important solution with the potential to address some of the most pressing issues threatening the sustainability and resiliency of Canada’s healthcare systems and supply chains. Procurement is the process by which systems contract for and secure medical technologies and service solutions. These technologies and solutions include everyday products like bandage dressings or personal protective equipment, the world’s most advanced devices for surgical procedures, and disease management solutions for patients living with diabetes, cancer, rare diseases, and other conditions. This research series sets the foundation for effective and scalable adoption of VBP policies, regulations, and practices in Canada.

The Path to Value

Unfortunately, VBP initiatives in Canada remain few and far between. While Canadian provinces and territories currently have no mechanism for identifying the procurement approach taken by contracting authorities, we anticipate around two-thirds of evidence-based medical technology tenders could incorporate some element of value-based outcomes. With excellent foundations, the current need is to ground existing and new VBP initiatives in systemic VBHC core principles and secondary implementation criteria. Doing so is critical to achieving value realization for patients, clinicians, and broader health system sustainability.

Slovinec D’Angelo and others, Value-Based Healthcare in Canada: Opportunities for Advancement (Ottawa: The Conference Board of Canada, December 8, 2020), https://www.conferenceboard.ca/e-library/abstract.aspx?did=10921.

To realize this shift, we propose a multi-pronged strategy and recommendations that address:

• current issues with healthcare funding and finance model design; • the lack of data and evidence to align action and monitor progress; • the need to educate stakeholders and professionals on VBP and galvanize capacity to scale efforts; • required changes to procurement policies and legislation to guide best practices and ensure adaptive system and organizational governance.

Read the Part 3 issue briefing, The Path to Value.

As world-class health systems embrace the shift toward value-based approaches to procurement and healthcare service delivery, will Canada be left behind?

Exhibit 1

Case Studies of VBP-Supportive Methodologies by Procurement Level

Source: The Conference Board of Canada

Fundamentally, value-based procurement is not a procurement problem. To achieve adoption at scale, we need alignment of system design and incentives.

Dov Klein, Vice-President, Value-Based Care, Ontario Health

Exhibit 2

VBP Outcomes and Benefits for Patients and Other System Stakeholders

Source: The Conference Board of Canada

Satisfaction Wait time to access services Recovery time Rehospitalization Reoperation Adverse outcomes

Engagement and input Point of care burden

Total cost of care Downstream treatment costs Rehospitalization Access to innovations Efficiency of clinical workflows

Access to care

Economic productivity of patients and informal caregivers

Patients/population groups

Providers

Hospitals

Healthcare system

Society

Activities of daily living and functional quality of life

Mortality Morbidity Access to innovations Access to care closer to home

Handling, functionality, and training

Access to innovations Satisfaction

Evidence-based patient care pathways

Research and development Adoption of innovations

Sustainability (removal of materials, waste management)

Recruitment and retention

Wait times for services and procedures (diagnostics, treatment, care)

Product traceability Patient safety Clinical experience Health equity Capacity

Continuum of care and transitions in care (from hospital to the community)

Stakeholder collaboration

Unless our healthcare investments are structured to incentivize or pay for value-based outcomes at scale, our health systems won’t be able to progress beyond the current model. And the potential for health outcomes and social and economic impact from procurement in healthcare will remain elusive. Thankfully, Canada is ripe for change and ready to harvest and build momentum toward paying for value.

1. Hospital unit

Improving patient safety using the MEAT VBP Framework

2. Hospital program

Competitive dialogue at the Southlake Cardiac Program

3. Regional

Eastern Health’s VBP policy and practices

4. Provincial

Ontario’s procurement of cardiac devices

Healthcare funding and finance models

Data, measurement, and evidence

Education, training, and tools

Procurement policies and legislation*

Provincial healthcare investments that incentivize value

Read the Part 2 impact paper, Different Is Necessary.

Download Impact Paper

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The Conference Board of Canada acknowledges and thanks the following organizations for their contributions and financial investment in Value-Based Healthcare Canada (VBHC Canada™) during the time this issue briefing was prepared:

Canadian leaders and experts agree: the biggest opportunity for VBP to be adopted at scale is for our provincial/territorial healthcare investments to incentivize value, outcomes, and costs over acquisition price.