BC and Alberta partner on procurement
VICTORIA – British Columbia and
Alberta have completed a joint agreement that is expected to reduce
costs for healthcare system supplies and services, announced Health
Services Minister Kevin Falcon.
“More than ever before, it is critical that we maximize every healthcare
dollar that we spend,” said Falcon. “The joint purchasing agreement
between British Columbia and Alberta will increase our combined
purchasing power and save more money for the health authorities to
invest back into direct patient care.”
The agreement will have the BC Health Authority Shared Services
Organization and Alberta Health Services jointly award supply contracts
by way of a common group purchasing organization (GPO) contract with
HealthPRO, who will establish bulk purchases on a wide range of
A GPO is an independent entity owned by its members that aggregates
purchasing volumes and develops large national supply contracts for its
member organizations. Larger contracts translate into more savings and
dividends for the GPO members.
“This agreement confirms our commitment to reducing costs and finding
more efficient ways to buy healthcare supplies and services,” said
Alberta Health and Wellness Minister Ron Liepert. “This deal is the
result of our recent discussions with B.C. and the other Western
provinces on ways to realize savings on common drug and healthcare
“This partnership demonstrates the ability of health services within
Alberta and BC to translate cooperation at a strategic level into real
operational savings,” said Lynda Cranston, B.C. Health Authority Shared
Services Organization board chair and president and CEO of BC’s
Provincial Health Services Authority.
The agreement will consolidate purchases for the two provinces’
healthcare systems that serve approximately eight million residents,
including 4.4 million people in B.C. It is anticipated the combined
volumes will range from $750 million to $1 billion, depending on which
products each province wishes to contract through HealthPRO.
With potential expenditures reaching $1 billion, the Alberta – B.C.
purchasing agreement is viewed as one of the most significant
developments within the Canadian healthcare supply chain, creating
greater industry leverage for Western Canada.
HealthPRO is a Canadian corporation owned by and responsible to its
shareholders – health facilities across the country. By amalgamating
their volumes with a single national GPO, Alberta and BC have
significantly increased the size and influence of the HealthPRO
contracts, which will drive improved pricing to the benefit of all their
British Columbia’s SSO has signed two contracts for cardiac supplies and
home oxygen services that will save $57.5 million over the next five
years. These savings represent 38 percent of the more than $150 million
savings that the SSO first identified in December 2008.
Posted July 30/09.