Nfld. & Labrador

Bigger orders, better prices: N.L. to begin bulk buying for health-care system

Newfoundland and Labrador's health-care system is set to find savings by sharing services and buying supplies in bulk for the regional health authorities.

Plan expected to save $13M annually, work to begin in fall

Minister of Health and Community Services John Haggie announced the province's plan for batch buying on Thursday at Confederation Building. (Glenn Payette/CBC)

Newfoundland and Labrador's health-care system is set to find savings by sharing services and buying supplies in bulk.

It means that a single service will handle purchasing and inventory for the four regional health authorities, as well as the N.L. Centre for Health Information (NLCHI), over the next five years.

Health and Community Services Minister John Haggie says everything from needles and gauze to printer cartridges and office supplies will be bought through the central service.

"You're going to see better value for the dollar that you spend, because we can leverage the entire province's needs for dressing supplies or printer cartridges for bulk buying power. We've got bigger orders, we get a better price," he said.

We've got bigger orders, we get a better price.- Minister John Haggie

"And using that buying power, you're going to look at cost avoidance in the future because you may just have one service contract." 

Haggie said the plan will lead to savings in the short term of about $13 million on the province's $400 million annual health purchasing budget. 

There will also longer-term benefits, such as coordinated buying and better contract and vendor management, something Haggie said the province does "very poorly at the moment." 

No significant change in employment

The minister also said there will be no significant change in employment with the new system, either in location or numbers.

The system will be a "virtual network," with the supply chain led and managed by Central Health. Haggie compared the new plan to how Eastern Health currently provides legal advice for all four health authorities.

He said a new governance structure will be put in place, led by Central Health's current Vice-President of Finance and Infrastructure John Kattenbusch.

"Each of the RHAs and the Centre for Health Information will have a say in a board structure. We will have a designated lead for the province, who will be involved with the setting up of this project," said Haggie.

"The managers will have different reporting structures in the first instance, that's the change that you're going to see in the immediate or the short term."

He said work will begin in the early fall, beginning with setting up reporting lines for managers in each of the authorities.

The minister added that there could also be be opportunities for the bulk purchasing of prescription drugs in the future, but there are challenges surrounding negotiations and regulations across the country.