How we work and the value we provide
About HealthPRO HealthPRO is a national procurement services organization, working on behalf of more than 250 member shareholders, who are the hospitals, provincial health authorities and shared service organizations from across Canada. Serving over 800 individual hospital sites, we aggregate $1.6 billion in contract volume to deliver the best value to members across the country.
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dedicated committe
PRODUCT PREQUALIFICATION
Our focus on quality dedicated committees
ongoing quality assurance monitoring
Product Prequalification
Post award assessment
ongoing quality assurance monitorin
Post award assessment
Quality processes and products are central to everything we do. This is evidenced by our:
PRODUCT EVALUATION
CONTRACT DECISION ALGORITHMS QUALITY
HealthPRO has developed contracting decision algorithms to mitigate risk across all contracts. These rigorous processes are HealthPRO policy.
DEDICATED COMMITTEES quality standards
PRODUCT PREQUALIFICATION
dedicated committees
PRODUCT EVALUATION
Product Prequalification
PRODUCT Post award assessment PREQUALIFICATION ongoing quality PROCESS assurance monitoring
PRODUCT EVALUATION PROCESS PRODUCT PREQUALIFICATION
leadership
dedicated committees
HealthPRO’s unique product Clinicians, pharmacists, supply prequalification process for chain professionals and subject contractMaterials decision Management contracts matter experts from across ongoing quality algorithms ensures that products are first HealthPRO’s membership provide assurance monitoring scored individually against direct input into our product predetermined criteria. Only and service evaluations, contract products that meet or exceedcontract these decision strategies and award decisions. criteria are eligible to movealgorithms on to quality the standards RFP process where financial value is taken into consideration. leadership QUALITY This ensures that only products quality standards that meet the rigorous clinical leadership criteria may be awarded a contract. QUALITY
contract decision algorithms
ongoing quality assurance monitoring QUALITY
quality standards leadership
Product Evaluation
NEW
contract decision algorithms
dedicated committees
OLD
Product Evaluation
POST AWARD ASSESSMENT SERVICE
Product Prequalification
ONGOING QUALITY ASSURANCE MONITORING
QUALITY contractSTANDARDS decision LEADERSHIP algorithms
Post award assessment
HealthPRO’s Pharmacy Post HealthPRO’s Pharmacy Product Award Assessment Service (PAAS) Evaluation committee, comprised helps members transition to of pharmacists and technicians, new contracts by identifying key assess product quality as part of dedicated committees differences between the new the RFP process. The committee product on contract and the considers such criteria as whether the product contains latexongoing or quality previous version. This service is of great benefit to frontline preservatives, whether theassurance generic monitoring healthcare workers and their name appears clearly, and patients as quick recognition of the whether the product has a lot number to ensure traceability. contract decision new product can prevent errors algorithms and improve patient care. Human Factors methods are also incorporated to reinforce product evaluator objectivity, reduce adverse events and improve quality standards patient safety. Product quality leadership represents a significant portion of the overall evaluation, followed by assurance of supply and vendor quality.
HealthPRO is actively involved As a national procurement services in monitoring the quality of our organization, HealthPRO has contracted products throughout quality standards spearheaded and participated in the contract lifecycle. At any time,leadership many multi-stakeholder initiatives QUALITY members can submit pharmacy to promote quality and patient product concerns through the safety. Examples of our work to online HealthPROCONNECT Portal date include advancing the use and Materials Management of GS1 global standards to concerns by submitting a form enhance patient safety and via email to HealthPRO staff. We traceability and chairing the review these concerns and work Contract and Procurement Best with suppliers to affect change Practices Working Group as part and achieve a resolution, thereby of the national Multi-Stakeholder promoting greater patient safety. Steering Committee on Drug Shortages.
QUALITY
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Our business model
Our business model is simple. We have two sources of revenue: supplier rebates (98.6%) and membership fees (1.4%). The latter is charged annually to remind members of their commitment. HealthPRO does not retain any profit; revenues less operating expenses are returned to members as patronage dividends based on their contract participation. In fact, more than $0.85 of every rebate dollar is returned to our members. This model allows hospitals to participate with HealthPRO at no cost.
Membership Fees (1.4%)
S 100%
SUBSTANTIALLY REDUCED INVOICE PRICES
By aggregating our national collective volumes, we substantially reduce the invoice prices of products purchased by hospitals, resulting in hundreds of millions of dollars in direct invoice price savings.
100% OF PROFITS ARE RETURNED TO MEMBERS
Revenues less operating expenses are returned to our members as a patronage dividend based on the rebate revenues earned through participation in our contracts.
EFFICIENT
More than $0.85 of every rebate dollar is returned to our members. Our national operating costs represent less than 0.7% of annual contract value, demonstrating an exceptionally efficient service. 100% profits returned to members
Efficient
Supplier Rebates (98.6%)
Accountable
Agile
ACCOUNTABLE
DIVIDENDS
100% profits returned to members
Efficient
Price Savings
Accountable
Dividends
HealthPRO is a private company registered in the seven provinces and territories in which we do business. We are directly accountable to our member shareholders and our Board of Directors, made up primarily of Executives from the hospitals and Health Authorities from within our national membership. Agile Resource efficiencies
AGILE
DIVIDENDS
We listen, and we adapt. HealthPRO has the organizational agility and flexibility to respond to the evolving needs of our members. CONTRACT COMMITMENT
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100% profits returned to members
Efficient Price Savings
Accountable Dividends
Agile Resource efficiencies
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Cost savings, revenue and efficiencies delivered to hospitals HealthPRO delivers hundreds of millions of dollars of value to Canada’s hospitals in direct invoice price savings, patronage dividends and resource efficiencies.
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PRICE SAVINGS Average
10%
Through our national aggregated volumes, HealthPRO is able to substantially reduce invoice prices, generating direct savings for hospitals that can be re-directed where it is needed most – frontline patient care.
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DIVIDENDS
DIVIDENDS
$423 million
Rebates and lower invoice prices Rebates are not at the expense of direct invoice price savings. Year over year, we demonstrate that pricing continues to decline as rebates go up.
RESOURCE EFFICIENCIES
paid to members since 1996
Our business model generates additional revenue in the form of supplier rebates, which we have returned directly to our members in the amount of $423 million since 1996 through a quarterly patronage dividend.
By managing a portion of the procurement process on behalf of our member hospitals, we generate significant resource efficiencies.
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What are rebates and how do they work? A rebate is the return of a portion of a purchase price by a seller to a buyer, on purchase of a specified quantity, or value, of goods within a specified period. The rebate percentage is part of the contract award, agreed to in express terms in writing at the time of original sale. Rebates are an accepted practice and exist across many sectors, including retail, automotive and foodservice.
Rebates in the context of HealthPRO’s contracting process: ensures CLARITY and TRANSPARENCY HealthPRO posts a Request for Proposal.
1 HealthPRO returns patronage dividends to members based on their participation in the contracts.
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Suppliers voluntarily propose rebates as part of the competitive contracting process, because of the value they derive by contracting with HealthPRO.
DIVIDENDS
At HealthPRO, rebates are part of the competitive Request for Proposal (RFP) process. The financial value component of the RFP weighting criteria is the net of invoice price less rebate. A higher rebate alone cannot determine the result of the financial component.
HealthPRO deducts operating expenses.
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Rebates are paid to HealthPRO.
HealthPRO awards the contract.
100%
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Hospitals purchase from the contract.
Rebates are tracked by item and by contract to individual members, ensuring accountability and traceability. 10
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Why suppliers pay rebates
00% profits returned to members
100% profits returned to members
Efficient Price Savings
Efficient
Accountable
What you should know about HealthPRO’s rebates
Agile
SUPPLIERS GAIN EFFICIENCIES THROUGH HealthPRO
DIVIDENDS
Efficient
Accountable Dividends
QUALITY + LOW INVOICE PRICE = VALUE
Suppliers derive value from the efficiencies of doing business with HealthPRO (responding to one RFP vs. dozens issued by individual hospitals, provincial health authorities and SSOs across the country), allowing suppliers to offer lower pricing and a higher level of service. Agile Accountable Without HealthPRO, suppliers would have to significantly increase their staff to manage the volume of RFPs and the sales process without our Agile consolidation and commitment. This additional cost to the supplier would be borne by the hosptial in the invoice price of the product.
HealthPRO’s contract decisions are not made on price or rebates alone. Product and supplier quality criteria are major components of our decision process.
MORE THAN 85% ARE RETURNED TO OUR MEMBERS THROUGH PATRONAGE DIVIDENDS
Resource efficiencies
DIVIDENDS
DIVIDENDS
Price Savings
Dividends
fficiencies = greater member savings
Dividends
CONTRACT COMMITMENT
Resource efficiencies Contract CONTRACT COMMITMENT Commitments
Contract Commitments
Resource efficiencies
HealthPRO’s high levels of commitment and compliance ensure that suppliers receive the business they were awarded. Confidentiality
REBATES ENSURE A LAYER OF INVOICE CONFIDENTIALITY
CONTRACT COMMITMENT
Efficiencies = greater member savings
HealthPRO DELIVERS COMMITMENT AND COMPLIANCE
Contract Commitments
Rebates allow the supplier to reward the high volume and commitment HealthPRO delivers without compromising higher margins on Confidentiality lower volume clients.
Confidentiality
ADHERENCE TO PROCUREMENT REGULATIONS
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This is in addition to substantial invoice price savings generated by HealthPRO’s national purchasing power.
AVERAGE INVOICE PRICE SAVINGS ARE 10% PLUS REBATES
Rebates are not paid at the expense of savings; our contracts offer an average of 10% invoice price savings in addition to rebates.
REBATES ARE PART OF THE COMPETITIVE PROCESS
HealthPRO does not require or mandate a fixed rebate percentage, administration or co-marketing fee.
HealthPRO’s AVERAGE REBATE IS 4%
The invoice price is not artificially inflated to account for the rebate.
Suppliers are confident in our adherence to procurement regulations and our fair process. Efficient
Accountable
DIVIDENDS
Dividends
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Agile
If rebates were discontinued, suppliers would not apply them to invoice prices. Resource efficiencies
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Why HealthPRO is an integral part of the Canadian Healthcare System NATIONAL PURCHASING POWER
Maximizes savings
Through our national collective volumes, we achieve exceptional financial savings, contributing to the sustainability of our healthcare system.
Purchasing power
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Creates income
CREATE REVENUE
VALUABLE SERVICES
We create additional revenue for hospitals by returning 100% of our profit in the form of patronage dividends. Since 1996, we have returned more than $423 million in patronage dividends to hospitals across the country.
We offer services to hospitals that would be resource-intensive to recreate on their own. For example, HealthPRO’s Post Award Assessment Service (PAAS) helps members safely transition to new contracts by identifying key differences between the new product on contract and the previous version. This service is of great benefit to frontline staff and their patients as quick recognition of the new product can prevent errors and improve patient care.
Equitable
IMPACT ISSUES THAT MATTER We offer a strong national collective voice on critical healthcare issues affecting hospitals across Canada such as drug shortages, standards and innovation.
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Updated JULY 2016
HealthPRO Procurement Services Inc. | 5770 Hurontario Street, Suite 902, Mississauga, ON L5R 3G5 | P: 905-568-3478 / F: 905-568-5283 | www.healthprocanada.com
