The Telegram (St. John's)
Bulk-buying will save province millions, health minister says
The provincial government is taking a page from the thrifty shopper’s book of economics and will soon start buying medical and office supplies for the four regional health authorities and the provincial centre for health information in bulk.
The bulk purchase savings is one long-term benefit of the government’s initiative to streamline supply chain management into a province-wide system.
Health and Community Services Minister John Haggie says having one entity procuring and managing the inventory of medical supplies such as gauze swabs and needles, and office supplies such as paper and ink cartridges, will save the government $13 million annually on its $400-million budget, $10 million of which will come through bulk purchasing. “You’re going to see better value for the dollar that you spend because we can leverage the entire province’s needs to supplies for bulk-buying power,” Haggie said.
It’s not that the health authorities don’t currently engage in any bulk purchasing, but the current five-agency system doesn’t lend itself to effective vendor management.
“Our managers are all currently very generalist. They have to be, if you like, masters of everything,” Haggie said. “This will allow, in time, for subject matter specialists to evolve.”
It won’t, however, include the bulk purchase of medications.
“We are members of the Pan-canadian Pharmaceutical Alliance (PCPA), which is a provincial and territorial buying group, so if we look to leverage that bulk-buying power with drug companies, one of the challenges on the national scene is the disparity of formularies between provinces and jurisdiction.”
Another challenge, Haggies says, is the manner in which pharmaceutical companies negotiate and regulations in place regarding availability and licensing.
“It’s not just a (regional health authority) piece, there is a national component and some legal framework around that,” he said.
The new system will be based out of the Central Health Authority and administered by John Kattenbusch, its vicepresident of finance and infrastructure, with a board consisting of the CEOS of the four authorities and the centre for health information.
Haggie says there won’t be any change to the number of unionized staff in supply chain management at the moment, and while managers could become employees of Central Health, they will continue to be based in their respective regions.
Haggie said he expects the centralized system will alleviate some of the problem in supply chain staffing turnover.
“We’re constantly recruiting anywhere from 10 to 15 individuals to work in unionized positions in supply chain. It seems to be a challenge sometimes,” he says.