Northeast LHIN and partners bring 24 hospitals together as part of new Northern Ontario supply chain

New group includes Manitoulin Health Centre

MANITOULIN—Northern residents, including those on Manitoulin Island, will soon benefit from the creation of a newly expanded shared service organization for North East Local Health Integration Network (NE LHIN) hospitals, including the Manitoulin Health Centre (MHC). The newly formed/expanded Northern Supply Chain (NSC) will pass on savings made from purchasing medical products and equipment putting it towards frontline patient care.

“We have been very interested in working in this with other like minded hospitals,” said Derek

Graham, chief executive officer of the MHC, last Friday. “This region is the last in Ontario to form this type of partnership, so there has been a gap.”

“We are very excited to be part of this partnership,” stated Mr. Graham. “There is a lot of potential for  savings and targeted areas.”

Mr. Graham noted the MHC has been part of a smaller scale group purchasing program with a company for a number of years, but this partnership broadens the efficiencies not covered by the other.

“The NE LHIN has been very supportive of this proposal,” said Mr. Graham. “We had invited the NE LHIN and Derek Gascoigne (general manager of NSC) to come and speak to us on this partnership and they presented the model being looked at.”

Mr. Graham noted Lynn Foster, vice-president of Corporate Services and CFO of the MHC, has been working with the partnership working group, “and has done a tremendous job in this role.” This group put out a request for proposals. “It was the (former) Northwest Supply Chain that was selected. Almost all hospitals in Northeast and Northwest Ontario are now included in this partnership.”

The NE LHIN worked closely with its 24 hospitals and the NSC to help create this shared service organization. NSC (formerly known as North West Supply Chain) has operated a shared service organization for 12 northwest hospitals for the past five years. With the addition of the 24 from the Northeast it will become the largest in the province by the number of members and customers, representing a collective spend of approximately $430 million annually.

“The (now) NSN has never failed to provide savings-positive returns for members,” said Mr. Graham. “They have seen an average return of seven dollars for every dollar spent on membership fees. Suffice to say this provides great potential for our organization which is solidly behind this strong proponent and we are excited to be moving forward.”

“We’ve been working closely with our hospitals and other partners to make this a reality for some time,” said Tamara Shewciw, chief information officer of NE LHIN. “This is a win-win situation. Hospitals benefit from increased efficiencies and patients will benefit from the re-directing of expected savings into patient care.”

The Ministry of Government and Consumer Services (MGCS) OntarioBuys Program is investing $4.4 million over the next four year in the NSC to drive collaborative procurement, innovation and efficiencies. Benefits include enhanced supply chain management, as well as significant savings in the purchase price of medical products and equipment and sharing of best practices across the Northeast.

“Our government is committed to ensuring Northern patients benefit from standardized care and purchasing efficiencies,” said MPP David Orazietti. “The $4.4 million being invested into the newly created Northern Supply Chain will directly benefit our community, through improved efficiencies in our hospitals and access to increased services and resources.”

“Member hospitals in the Northwest have seen an average return of $7 for every dollar spent on membership fees. In the past five years, the 12 participating Northwest hospitals have saved more than $20 million,” said Mr. Gascoigne. “We are pleased to welcome the 24 hospitals in the North East LHIN and anticipate further savings for all Northern Ontario members.”