St Joes Hospital Tactical Issues Case Study

ISSUES IDENTIFICATION

St Joe’s procurement department is facing recurring pressure from clients/end users to purchase innovative products that will help enhance patient care. Additionally, BPS guidelines are not taken into consideration by the clients/end users when requesting products. St Joe’s does not have a long-term strategy in place to overcome their imbalanced budget.

TACTICAL ISSUES/OPERATIONAL ISSUES

1.Lack of adherence to BPS guidelines

Doctors and other end-users do not understand process and BPS guidelines, resulting in lengthier buying process.

2.Lack of technical knowledge within shared services buying group

St Joe’s procures its supplies through shared services group, Mohawk-Medbuy Corporations, who sometimes do not understand the use of the product.

3.Purchasing expensive supplies

The hospital is basically failing to acquire regular supplies at the best prices possible in the market; resulting in over spending

4.E-procurement not used to its full capacity

E-procurement is not being used at 100%

5.Using standard forms for all product RFIs and RFPs

Using one standard form to buy all products, sometimes the information is vague.

STRATEGIC ISSUES

1.Cost Savings are not captured

The hospital is unable to quantify savings as they rely on Mohawk-Medbuy Corporation and its prices for all their supplies.

2.Maverick Procurement Practices

Some supplies are bought on need basis, in such scenarios procurement teams place orders without getting into contracts.

OPERATING ENVIRONMENT/ROOT CAUSE ANALYSIS

Qualitative Analysis

St. Joes Hospital Hamilton is a public hospital. It receives its funding from the provincial government. It meets its procurement needs through a shared services group: Mohawk-Medbuy Corporation. Recent budget cuts and rise in operation cost has forced the hospital identify the issues and seek alternatives.

1.Lack of adherence to BPS guidelines

Some end users to not understand the process of buying new products, and how the BPS guidelines work. They avoid filling the paperwork, or fill it incorrectly. This leads to longer wait times for in procuring the products.

2.Lack of technical knowledge within shared services buying group

Vendors have realized that Mohawk-Medbuy does not always understand the product and the technical use. This makes it difficult for them to pitch new products and ideas. Also hospital end users usually engage in back and forth with the procurement team to make sure the right product is bought. They could have used this time for patient care.

3.Purchasing expensive supplies

The hospital is basically failing to acquire regular supplies at the best prices possible in the market; resulting in over spending

4.E-procurement not used to its full capacity

E-procurement is not being used at 100%, some bids still have to be submitted by mail.

5.Using standard forms for all product RFIs and RFPs

Procurement teams are using the same form to buy all products, i.e. sometimes information in the forms is vague or unnecessary for the product they may be buying. Custom forms will be ore clear, and will minimize the back and forth with the vendor.

6.Cost Savings are not captured

The hospital is unable to quantify savings as they rely on Mohawk-Medbuy Corporation and its prices for all their supplies. St. Joe’s relies primarily on the shared services group for all the purchasing needs and does not search the market for better price

7.Maverick Procurement Practices

Some supplies are bought on need basis, in such scenarios procurement teams place orders without getting into contracts. Some end users also do this to avoid filling in paperwork.

Quantitative Analysis

•Ontario spends 42% of its budget on healthcare

•St. Joe’s Annual budget is $550million

•St. Joes has deficit of $26 million due to inflation, and rise in other operation cost such as hydro and heat

SWOT ANALYSIS

STRENGTHS

•Strong Community base

•St Joe’s strong has a strong focus on leadership and learning

•They pride in being innovative, they recently bought the first Mako (robotic-arm assisted surgery)in Canada

•Head of Orthopedics is based out of St. Joes-therefore major focus on training and teaching the surgeons of tomorrow

•Better operating average, when compared to national data

WEAKNESSES

•Procurement process is mandated by BPS, at time it may be lengthy

•Unable to identify its USP-unique selling proposition-from other hospitals

•Lack of 100% compliance with the e-procurement BIDs still have to be mailed in

•No metrics in place to measure hospitals growth

OPPORTUNITIES

•Improvement in science and technology will help automate some processes