A “Pro Cure” for Procurement in Canadian Healthcare

Could the Stakes Be Higher?
I’ve always been partial to the use of the double entendre in written form. When I presented at the eHealth Conference in June 2017, my presentation was entitled “Stop Complaining About Healthcare Procurement: The Fix Is In” – the play on words of course being solutions to historical procurement ails were certainly available (and had been for some time) and cheekily, well, my personal regard as it relates to the phrase “open, fair and transparent” and the perception by some in industry that “the fix” is usually in when it comes to many open public procurements.

Little did I know that the use of the double entendre would back fire on me many months later in a way that I did not expect. In March 2018 at the Digital Health Canada UpOnDIGITAL Ontario Spring Conference where the conference theme was “Innovation in Procurement”, I naturally came to speak about, well, Innovation in Procurement. After completing my talk entitled “Common Sense, But Not Common Practice: Innovative Procurement Approaches”, I was approached by a number of the audience members that expressed to me how refreshing it was to hear about Innovation in Procurement rather than what they had heard mostly all day, which was the procurement of innovation. For a brief moment, I went cross-eyed. After gaining my composure, what was clear to me was that the appetite for innovative procurement approaches was stronger than ever, yet here I was standing dumbfounded in early 2018 realizing so much more education and awareness was still required and more importantly, as an industry, how could we have missed the mark when given such a great opportunity as this one-day venue.

As the leader of a recognized and award-winning consultancy in business and procurement advisory1, I realized some time ago this is much bigger than any one firm or its vested interests. This problem requires the entire industry to embrace it. Starting sometime around 2015, I decided to do my part to get the word out as it applies to strategic / value-based / innovative / innovation procurement. In my opinion, there is simply too much at stake in the context of Healthcare delivery in Canada that effects every one of us whether it be individually, our immediate and extended families or others we care about, to let any more substantial time go by without truly addressing this matter.

The Times They Are a-Changin’
Although before my time, Bob Dylan’s 1964 hit “The Times They Are a-Changin’”, seems poignant now more than ever. During the 2010’s, Business Transformation and Digital Transformation have become the order of the day. And with the election of the Provincial Progressive Conservatives in Ontario in 2018 and their recent announcements related to Healthcare Transformation, it seems to me that if we as an industry are to truly transform, there are some key enabling processes that are pre-requisites to ensure that successful transformation. According to the February
2019 interim report by the Ontario Premier’s Council on Improving Healthcare and Ending Hallway Medicine entitled “Hallway Health Care: A System Under Strain”, the use of apps (technology) and embracing innovation are key underpinnings of enabling that transformation. By extension, that implies lots of public procurement and presumably innovative procurements at that, including the procurement of innovation! And if the Ontario Government is intent on getting out of the business of what it historically has been shown to be not so good at (such as “last mile” service delivery, governance / implementation of technology projects, bringing innovative solutions to market) and focusing on what it is good at (policy, regulation, operational stability and so on) then more than ever, do we have to have the right procurement policies, culture, processes and tools in place.

State of the Union
As a relatively new member of the ITAC Health Procurement Task Force, I was curious to understand where ITAC Health stood with respect to procurement advocacy. What I discovered was that the major issues that ITAC Health was championing on behalf of its membership were:

  1. RFP Process and Content, namely, overly perspective and restrictive RFPs (e.g. clients telling the vendor “the how” vs. asking for “the what” in their RFP) coupled with the (unnecessarily long) timelines associated with RFPs
  2. Pre-procurement planning – business and IT readiness
  3. Specific Contact Terms or Concepts (Liability, IP Ownership, Indemnity)

The identification and articulation of these issues date back at least to 2013/2014, and it just so happens that 2013 / 2014 was really a time of change within procurement within Ontario2.  I intend to focus on issue 2. in an upcoming article because that issue could not be more on point.  Frankly, I regard the over-use of the term strategic procurement as an oxymoron.  However, with the integration of business strategy into the procurement process or said another way, having the procurement process fit within an overall approach and business framework, well, then there can truly be strategic procurement.  As mentioned, that is a topic onto itself which I will return to in a follow-up article. For the moment, let’s take a look at what has transpired since 2013 / 2014 which addresses issue 1. for the most part and to some extent issue 3. As you may be getting the impression, there is a lot to cover on the topic of innovative procurement but let’s start in this article with simply setting the stage.  But before I start, first a disclaimer – these are my personal observations as an industry insider and do not necessarily adhere to, nor pretend to represent exact timelines nor be all encompassing of all activities nor accomplishments occurring within the industry.  And with that, let’s turn to my observations.

A Brief History of Time
Over the last few years, Innovative Procurement in Ontario has gained some traction. Between late 2013 and early 2017 is what we at my company refer to as the “awareness” phase. This phase is where various Government organizations and private entities sought to define innovative procurement and educate the broader market. And actual implementation was sparse.

During this time, we saw the formation the Ontario Health Innovation Council (OHIC) ultimately culminating in the January 5th, 2015 publication of the “The Catalyst: Towards an Ontario Health Innovation Strategy” report. One of the six recommendations of that report was to “Accelerate the Shift to Strategic, Value-based Procurement”. Around this time period (2015 and before), the Healthcare Supply Chain Network (HSCN), was promoting Innovation Procurement and also developed some templates and tools in concert with the Ontario Ministry of Government and Consumer Services’ (MGCS) Innovation Procurement Initiative – these templates and tools presumably were the forerunner to the Innovation Procurement Toolkit (IPT) which came into being in 2018.

By the end of 2015, some innovation models and approaches were out in the public domain along with some preliminary tools. As a result, in 2016 and beyond, implementation started to take a foot. We are now in what we refer to as the “implementation” phase, although certainly it is early days as much education and awareness is still required let alone practical experience on using these methods. Let’s not make the mistake that just because various publicly funded, well intentioned Government bodies have brought forward the innovation agenda that there is necessarily anything new here. For example, Competitive Dialogue has its origins in Europe around 2004. My firm has specialized in procurement advisory since 2002 and let me tell you, we certainly haven’t been advising our clients to use traditional, linear RFP based approaches for the last 15+ years!

As of late 2016, one of the more notable innovative procurement examples was for the eReferral and Patient Portal program (“System Coordinated Access”) in the Waterloo Wellington LHIN / CCAC whereby market sounding, and joint design were used. Through 2017 and gaining momentum into 2018, more and more Ontario-based hospitals and agencies started to try out innovation procurement models although adoption was largely at the region or individual hospital level. We have seen some uptake within the Ministry and some agencies and boards, but it is still far nascent in those corners of the industry relative to the hospital sector which is not surprising given the makeup of the OHIC council, the hospital influenced nature of the Catalyst report, HSCN’s constituency and the BPS origins of the innovation agenda. From my perspective, there have been (and continue to be) some seriously big dollar programs within the Ministry and Broader Public Sector that could have benefited from different procurement approaches. Although there is adoption within the hospital sector, far greater awareness and education is required within the “central” areas of Government. Some other examples of innovative procurements that come to mind, again hospital centric, include UHN’s use of the competitive dialogue process; Southlake Regional Health Centre and Peterborough Regional Health Centre multi-stage Innovative Procurement utilizing a Competitive Dialogue Process (“Patient Communications Hub”) and Hamilton Health Sciences Corporation’s multi-stage Innovative Procurement utilizing a Competitive Dialogue Process (“Unified Data Architecture Solution”). Some of you might be wondering why I did not mention some of the recent, in-flight or burgeoning HIS procurements? That probably deserves an article on to itself! Suffice to say, although the examples of innovative procurements are limited, there is now real momentum.

The Road Not Taken
I don’t have all the answers on how to accelerate awareness and adoption of truly flexible and strategic procurement approaches. But the good news is we do have the answers on how to address innovative procurements.

To the former, we are doing our part. If this article resonates and you feel it is relevant, this will serve as the first article I write in a series that will become yet one more mechanism to get the word out in concert with the efforts of our friends and colleagues at ITAC Health, Digital Health Canada, various other Industry bodies, within Industry itself, Government and the Broader Public Sector.

In upcoming issues, I intend to “put the strategic back” into strategic procurement and explain the distinction. I also would like to pull back the curtain and detail various aspects of our battle-tested, client sanctioned proprietary framework, methods and tools that are the practitioners’ playbook to both assuring the successful outcome and substantially de-risking any complex strategic procurement. My firms’ clients know all about this. It is time others did too. You might say that there is already MGCS’s “BPS Primer on Innovation Procurement” and HSCN’s “Innovation Procurement Toolkit” available so what more is needed? We regard those two fine publications as important educational constructs for the industry in order to get the word out and provide both some of the models and early toolkits to enable innovation procurement. Said another way, like any new subject, we need to start somewhere with a taxonomy, nomenclature, concepts, a sub-set of models and preliminary tools and those publications goes a way to addressing that. But here’s the thing – ever tried to write an Outcomes Based Specification (OBS) oriented RFx? Conceptually it makes a lot of sense. But execution is an entirely different matter. For those that have embarked on that journey, you understand what I mean here. Although the previously aforementioned publications serve as a starting point, they are just that. They provide part of map. What I will discuss in upcoming articles is to fill in the rest of the map, but more importantly, define the terrain and how to navigate it.

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