Research on Value-Based Procurement Shows How to Strengthen Canada’s Healthcare Systems

By: CBoC Team

Ottawa, December 7, 2022The Conference Board Canada released today the final installment of a three-part research series aimed at supporting leaders in government and the healthcare industry with tools and recommendations to propel value-based procurement (VBP) as a key element of applied value-based healthcare (VBHC) efforts. The research shows that value-based procurement of medical technologies and solutions is gaining momentum in the context of healthcare sustainability pressures.

“Canada is building foundations for value-based procurement to realize better value and outcomes for patients and Canada’s healthcare systems,” according to Chad Leaver, Director, Healthcare at The Conference Board of Canada. “Different types of initiatives are advancing the integration of VBP at the system level. However, they are not measured or tracked across provincial/territorial jurisdictions. We anticipate that around two-thirds of evidence-based medical technology tenders in Canada could incorporate some element of value-based outcomes.”

According to the research, several countries have shifted their procurement practices towards value-based approaches, particularly in Europe. In Canada, a few stand-out initiatives are generating considerable financial and non-financial advantages for all stakeholders. Still, there is a range of challenges that limit the adoption of VBP —from siloed hospital budgets to the lack of patient and system outcome data to measure value. Canadian leaders and experts agree that the biggest opportunity to adopt VBP at scale is for provincial/territorial healthcare investments to incentivize value, outcomes, and costs over acquisition price.

Most hospitals in Canada are currently funded through annual global budgets, which provide a fixed allocation of funds based on predetermined volumes of services. However, this way of funding healthcare is not conducive to improving access and realizing optimal value for patients and system stakeholders. Many systemic changes will be needed for our healthcare systems to start adopting value-based outcome funding policies and for the medical technology industry to effectively partner with system stakeholders to deliver.

“In healthcare, policies drive funding models,” continued Leaver. “Without value-based policies and payment models, provinces and territories will have difficulty shifting their procurement legislation and practices toward VBP. The system simply isn’t designed to prioritize value and outcomes over acquisition price. In this research, we propose a strategy and set of recommendations to help move Canada further down the value path.”

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