Continued Application of a Value-Based Lens in Decision-Making
What does value mean? Value refers to the benefit realized by the consumer which may mean the patient, client, family member, the care provider and/or the health system, compared to the cost. Value can be more than dollars and cents and, at Eastern Health, we want value to also consider social impact. In assessing value, we will consider our organizational goals, our stakeholder expectations and the personal experiences of both our patients, clients, residents and their families, as well as our care providers.
We started to apply a value-based lens in decision-making processes by adopting a value-based procurement model which is underpinned by our Value-Based Procurement Policy (PDF). We wish to move away from traditional methods of awarding service contracts to those with the lowest cost bids or quotes for service provisions to a new innovative method that embeds the concept of value in our day-to-day activities and our formal and informal decision-making processes.
Value-based procurement focuses on achieving value (not products) and measurable outcomes such as quality, safety and cost. Value-based Procurement preserves the current principles listed in the Public Procurement Act of being fair, open and transparent with vendors. Value-based procurement occurs when the health-care system procures a solution to a problem and the patient outcomes are measurable, such as shorter wait times or there is a measurable operational outcome such as increased efficiency or cost savings.
A “value focus” helps drive innovation that benefits both the health-care system and economic development.
Vendors and Partners
Unlike the traditional approach of merely procuring products at the lowest possible cost, value-based procurement actively engages vendors, and sees them as partners to co-design solutions and explicitly share (through contractual relations) the financial risk and accountability for delivering outcomes. Such an approach helps to procure a solution to a challenge through innovation rather than procuring a product that currently exists at the lowest possible cost.
This process involves a closer strategic relationship between purchasers and vendors through the mutual exchange of information where purchasers learn about market solutions and vendors learn about health-care system needs. This trusted exchange of information with a common goal of finding solutions is in contrast to the traditional approach to procurement in the health-care sector which focuses on short-term cost containment without due regard to the long-term consequences on cost and health outcomes.