Thank you for your letter. I noted in the article the huge opportunities for the healthcare system to use value-based procurement to improve the sectors’ ability to access innovative technologies. The article centred on this, given that Canada, more often than not, lags behind other comparable OECD countries in the adoption of health technologies, including innovative pharmaceuticals, medical devices, and medical informatics. Canada is still playing catch-up, when compared with other developed countries, in the use of electronic health records. The slow pace of adoption of innovative technologies has a profound negative impact on the ability of the healthcare system to manage its resources more effectively, and most importantly, on the health of Canadians. A study last year concluded that health care organizations that adopt medical innovations have better health outcomes.[1] The study suggested that survival rates in the fastest-adopting hospitals are 3.3 per cent higher. That is equivalent to one-third of total improvements in survival rates over the last two decades. Value-based procurement allows health care organizations to identify valuable health innovations, and then test and adopt them within a framework that is directly linked to better health outcomes. Furthermore, and as I pointed out in the article, value-based procurement also provides the opportunity to focus R&D efforts on finding solutions to the most pressing healthcare challenges, which would boost Canada’s health and life sciences sector.
But, as you well noted, the opportunities within value-based procurement go beyond health and innovation outcomes. The BCG and MedTech Europe’s value-based procurement framework (one I have supported since its development) includes sustainability and macro socio-economic elements. (See Procurement: The Unexpected Driver of Value-Based Health Care.[2]) By extending the notion of “value” to recognize environmental impact and socially responsible supply chain practices, and by including these within value-based procurement, healthcare systems have the opportunity to contribute to social, environmental, and economic sustainability. Sustainable public procurement, which refers to purchasing practices that align with socially responsible and environmentally sound products and services, is increasingly imbedded within value-based procurement. In addition to the Swedish example you noted, there are others across Europe. (See Health Care Without Harm.[3]) Norway has implemented its Ethical Trade Framework[4] that prescribes ethical requirements for contracts, based on risk assessments and audits to evaluate compliance.
From my perspective, there are four elements required to optimize the role and impact of health systems in advancing social and environmental sustainability: legislation, policy, leadership, and culture. Value-based procurement can be linked to all four. Legislation and policies have been key in European efforts to meet international greenhouse gas emissions standards, and these have created incentives for green hospitals and green procurement practices that are making a difference. Leadership and culture that values innovation and sustainability is also needed to embrace and disseminate these practices with courage and enthusiasm.
I agree that the economic and social implications of responsible healthcare sector purchasing are sizable. As value-based procurement continues to be adopted in Canada, I hope that policy-makers and health leaders see the opportunity to test more, study more, and ultimately do more toward building social and environmentally responsible and sustainable practices—uncovering the part of the iceberg that is under water.
It is great to see the interest on what we do. I encourage you to visit The Conference Board of Canada’s e-Library to access publications and webinars on this topic, or send me a note at prada@conferenceboard.ca to continue the conversation.
Gabriela Prada; MD, MHA, CHE
Director, Health Innovation Policy and Evaluation
The Conference Board of Canada
[1] Jonathan Skinner and Douglas Staiger, “Technology Diffusion and Productivity Growth in Health Care,” Review of Economics and Statistics 97, 5 (December 2015), 951–64.
[2] Götz Gerecke, Jennifer Clawson, and Yves Verboven, “Procurement: The Unexpected Driver of Value-Based Health Care,” BCG Perspectives, December 8, 2015. http://www.bcgperspectives.com/content/articles/medical-devices-technology-sourcing-procurement-unexpected-driver-value-based-health-care/?chapter=3.
[3] Health Care Without Harm, Sustainable Public Procurement in European Healthcare (Brussels: HCWH Europe, 2014). https://noharm-europe.org/sites/default/files/documents-files/3125/Factsheet%20%7C%20Sustainable%20Public%20Procurement_0.pdf.
[4] Helse Sør-Øst, Ethical Trade (Hamar, Norway: Helse Sør-Øst, 2013). http://www.helse-sorost.no/fagfolk_/temasider_/etikk_/Documents/Ny%20estetisk%20handelsbrosjyre_Engelsk%20Korr4.pdf.