central lhin quality series - cohpa presentation …...… providing cost effective supply chain...

COHPA Central Ontario Healthcare Procurement Alliance … providing cost effective supply chain services for healthcare

Supply Chain Shared Services… leading practices and lessons learned

April 22, 2010


Discussion Outline

• Organizational Background

• April 2010 Status – Accomplishments

– Some Key Metrics

• Leading Practices

• Lessons Learned

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Presenting today

• Brad Sinclair– COHPA General Manager

• Jim Talbot – Director Materials Management,

Southlake Regional Health Centre

• Denise MacLean– Logistics Lead for Shared Services Conversion,

Markham Stouffville Hospital

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Organizational Background


Corporate Vision

COHPA will be a results-oriented, integrated supply chain organization. It will leverage the

combined resources and support of all partners, applying industry best and leading practices,

technology and economies of scale in order to reduce costs and increase service levels

in support of patient care.

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Owners of the Shared Services Corporation(Member hospitals)

• Markham Stouffville Hospital

• Peterborough Regional Health Centre

• Ross Memorial Hospital, Lindsay

• Royal Victoria Hospital, Barrie

• Southlake Regional Health Centre, Newmarket

• York Central Hospital, Richmond Hill

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Customer Hospitals

• Customer hospitals pay a fee for COHPA to manage their strategic sourcing and supply chain services.

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Current Customer Hospitals

• Haliburton Highlands (Nov 2009)

• Stevenson Memorial, Alliston (Nov 2009)

• Penetang Mental Health Centre (Jan 2010)

• Georgian Bay General, Midland (March 2010)

• Northumberland Hills, Cobourg (March 2010)

And more to come…

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Supply Chain Deliverables

Supply Chain Deliverables

ManufactureManufacture DistributeDistribute

• Reduced Costs• Sustainable Customer Service• Reduced Cycle Times• Improved Asset Utilization

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HospitalHospital CaregiverCaregiver PatientPatient


Key Deliverables• Combine purchasing power to deliver reduced prices

and increased value for medical/surgical supplies and contracted services

• Leverage Information Technology to centralize and improve the efficiency of:

• Contract management

• Procurement

• Logistics / Inventory Management

• Accounts Payable

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Key Deliverables• Create a shared services organization with a scalable

operating model for public sector supply chain functions.

• Pay out member investments in 2 years or less through contract savings and process efficiencies.

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Chronology & Milestones

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Date Event Weeks from funding

1998 - 2005 Informal meetings of Central Ontario Hospital Purchasing Association (COHPA predecessor)

April 2005 Steering Committee for iSCM project formed

December 2007 Business case submitted to OntarioBuys

March 2008 Inaugural meeting – Board of DirectorsStartup funding received

March 31, 2008 IT contract signed with McKesson 1

August 28, 2008 First payroll run – Leadership team and Contract Specialist 22

September 10, 2008 Servers installed and powered up at Data Centre 24

December 2008 Startup team relocates to Service Centre 36

April 2009 Go Live at YCH and SRHC 52

August - December 2009 Onboard RMH, PRHC and MSH

April 2010 COHPA assumes back office support functions for Haliburton Health Services

Fall 2010 Planned onboarding of RVH

Fall 2010 3 year strategic planning


April 2010 Status


Regional Hospital Supply Chains

funded pre-07

funded 07-08

Underway/

partial funding

Implementation:

Regional hospital supply chains have been or are being established for 70% of the sector, up from 25% in 2004.


• Negotiating contracts and running RFP’s on behalf of 6 member hospitals since June 2008.

• COHPA is leading a team of hospital representatives to seek product standardization opportunities.

• The transformation to standardized processes, paperless transactions and an independent service provider has generated considerable frustration among hospital users.

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Savings for COHPA Members

FY 2009/2010 $2.9M

FY 2008/2009$1.0M, approx 5% of contract value


Purchasing Metrics

• 1200 users (e-Requisitioners) in 5 cities

• 350 purchase orders placed per day (7 Buyers)

• 85% of requisitions placed as PO’s same or next day

• FY 2009/2010 volumes 20% over budget

• 46,000 catalogue items

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Materials Management – Hospital Supplies

• 70-100 supply carts per hospital

• 200-250 items per cart or bin

• Hospital technician scans via handheld device to generate replenishment order

• Overnight delivery, next day restocking

• 98.5% line fill rate

• Master services agreement with uniform pricing and service expectations, Third Party Logistics (3PL) provider

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Finance Metrics

• 700 invoice payments per day (8 Accts payable staff)

• Approximately $1.5M per day in disbursements

• 80% of vendor payments by Electronic Funds Transfer

• All employee expense payments for 5 hospitals

• All physician payments for 5 hospitals

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Leading practices


Interested sectors within the Central LHIN

Long Term Care Sector (Retirement homes, Nursing homes, Long Term care

homes) = 46 organizations in Central LHIN

Community Support Services Sector = 35 organizations in Central LHIN

Mental Health & Addictions sector = 24 organizations in CLHIN

Community Health Centres = 2 organizations in CLHIN

Community Care Access Centre = 1 organization in CLHIN

Hospital sector = 7 public organizations in CLHIN

…discuss the supply chain applications and opportunities


Before After ResultGroup tendering and contracts

Non Contract-Spot Purchasing

Decentralized Process

Non –Compliance for GPO

Harmonization of Contracts

Centralized Process

Compliancy improving

Streamline & Standardized process

Ensures compliancy with Supply Chain Guidelines

Coordination of contract

Reduction of lost opportunities

Electronic requisitions Mix of Manual & Electronic

No real-time online information

Year 1 -95% Electronic ( not Capital)Year 2- planning to include Capital

Real-Time Information P/O #, Del Date Etc

Downloading of work to the hospital

Still Evaluating/ Considering

Improved Approval level accountability/process

Centralized buying Hospital Buyers were on site, informal interaction with clinical staff

Buyers are off site, focus on $ value and process efficiency

•Frustration from clinicians•Importance of performance metrics and services agreement

3 way match, process rigor

Manual for Non P/Oi.e. Utilities, Lawyers

Electronic for P/O’s

Electronic Cheque process for Non P/O

Same Process

Accurate Coding

Reduced Data Entry/errors. Reimbursements. Non P/O’s

Purchasing and Strategic Sourcing – Jim Talbot

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Before After Result

Supplies On site storerooms Just in time replenishment

Frees up Healthcare $ for patient careFrees up physical space, working capitaland people

3 way match Paper invoices and receiving reports

Electronic Purchases, receipts and invoices

All transactions are automatically captured “in the system”

Best Practices Hospital Employees working with hospital team

Collaboration between member hospital with working teams

Standardized work processes: cycle counting, receiving

Technology Each hospital using their own technology

Shared Technology Platform

Better flow of information, less manual work, better data for decisions

Supplier Relationship Management

Each hospital working with each supplier

Suppliers managed against combined scorecards

Improved supplier performance

Materials management – Denise MacLean


Before After Result

Collaboration Individual organizations with independent, local processes for purchasing and accounts payable

Centralized, standardized process for all stakeholders

After “settling” period, streamlined and efficient work processes

Building Relationships

Occasional meetings of key players at conferences and special events

Regular monthly meetings of four working teams

Ongoing benchmarking and dialogue in pursuit of mutual benefits

Thinking Outside the Box

•Paper requisitions•Cheques•Just do it

Paperless processesEFT payments3 way match

Streamlined processes, increased accountability

Patient Safety- Device Alerts

Individual organizations with independent, local processes

Single point of contact, standardized process subject to audit

Timely and reliable deployment of information to clinical users

Back Office Consolidation

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Supporting the LHIN’s IHSP:

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Integrated Approach• 6 hospitals working together to standardize, centralize and optimize

back office processes

• Common technology platform and service provider

Patient Centered• Automate processes to free up time from clinical resources

• Save $ via group contracts to enable hospitals to invest savings for local patient care priorities

Accessible• 1200 users in 5 cites using desktop PC’s

• 46,000 catalogue items


Effective/Efficient• Hospital staff able to focus on clinical priorities, supported by purchasing

and payables professionals

• Not yet as effective as expected

• Improving call response and issue resolution

Safety• Standardized tendering of business to common specifications

• Contract awards consider supplier performance and quality

• Medical device recalls and alerts

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Supporting the LHIN’s IHSP:


Lessons learned



What went well:

• Member hospital involvement in IT solution

• Regular meetings for each stream of work

• On site support for end users post go live

• Focus group meetings to build awareness and understanding

• Hospital advocate allocated

• Dedicated staff committed to the project

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What could have been improved:• Aggressive time lines impacted quality data, internal communications and planning• Spend the time to develop Detailed process maps (as is, to be)• Lack of available resources for the hospitals (back fill not considered or identified

early enough in the project)• Key people at both COHPA and member hospital required to work unreasonable

hours for an extended period of time to meet deadlines• End users did not have the ability to practice after training• Training for Super Users not sufficient• Product shortages due to vendors not having COHPA set up as a customer• Critical issues with systems and processes at go live:

o Handhelds not functional in Distributiono Handheld and scanning issues in Receivingo Workload increase due to additional receiving steps

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Markham Stouffville HospitalSpend time mapping out work processes (as is – to be)

• Ensure that all current work processes have a way to be done inthe new environment

Align Staffing before cutting over• Investigate whether current staffing exists to properly supportrequired work effort in the new environment

Clean up• Spend time cleaning up current state so that old data is not transferred into new technology platform

Validate and test• Ensure that the data build in the new technology platform is correct and that it works

Training• Over train people on the new system and work processes


Future opportunities... Back office shared services


• Leverage group spend for joint RFP’s and contracts, driving increased value for scarce health care dollars.

• Participate in working teams to benchmark leading practices, apply technology and share learnings with other members of the group.

• Leverage group size and supplier relationships to achieve things like JIT inventory management, freeing up storage space and working capital.

• Utilize internet-based technology for requisitions, catalogue, purchasing, materials management and accounts payable…free up administrative staff for core services

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Our mission: …providing cost-effective supply chain

services for healthcare

www.cohpa.ca


Questions and discussionQuestions and discussion

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