ENROUTE TO CONSOLIDATE

Sadiq Panjwani

It was an early morning; wet and bit cold – it felt like an early spring day in Vancouver. As I was driving to host Canadian College of Health Leaders breakfast session on “Consolidation – Good, Bad and Future,”I asked to myself if healthcare consolidation is a good response to fiscal challenges or does it also drive better clinical productivity and patient outcomes?

Earlier that week, I was researching on this topic for my opening remarks and came across a publication by Canadian Health Services Research Foundation[1] that summarized some key findings in late 90s literature stating “efficiency gains from mergers are possible but not guaranteed.” It was very clear to me that consolidation started as an economic necessity i.e. to bend the cost curve down by combining buying power of organization to procure goods and services at optimize levels. In the last 10-15 years we have witnessed an evolution of consolidation both in terms of scope as well as deliverables.

Source: Health Shared Service of BC

Source: Health Shared Service of BC

Let’s take an example: In my own backyard in British Columbia, healthcare was fragmented and independent. In early 2000, government mandated 50+ institutions to consolidate into 6 geographic regions with a vision to enhance  patient satisfaction, adapt best practices and reduce overall operating costs. Though these goals look realistic for a successful consolidation, the province continued to witness growth in healthcare costs – partly because of aging population, immigration growth and advancing technology. Between the years 2007 to 2010, the province of British Columbia came up with a new shared services model that focused on two different streams:

  1. Health Shared Services BC – a provincial wide supply chain strategy to reduce cost and enhance service quality and
  2. Lower mainland consolidation – an innovative approach to help improve efficiency across 4 health authorities to consolidate corporate, clinical support and back office functions.

Throughout Canada, we have seen different levels of reforms, consolidation and regionalization. Some structure have more responsibilities than other for e.g. Alberta Health Services is responsible for planning, funding and delivering healthcare services whereas Ontario LHINs are primarily focused on planning and funding services based on community needs.

6-29-2015 4-17-26 PMIn my recent travels to Montreal, I had an opportunity to meet our High Acuity Care customers who have been using our surgical management technology for many years. The province has recently passed a bill that will reform healthcare by merging 182 individual health institution boards into 34 larger-sized boards each known as a CISSS. The newer structure aims to cut bureaucracy and save $220 million[3].

Like it or not, this is the lay of land and it impacts everyone associated with it. From patients to hospital staff; vendors to policy makers; researchers to students – the intentions are right and there is  alot of learning across Canada. Will it extend itself from back office consolidation to clinical areas? Will it impact the way reimbursements are happening? Will it impact fee for service? They may all be in consideration.

[1] “What Do We Know About Hospital Mergers?” By Astrid Brousselle, Jean-Louis Denis & Ann Langley

[2] “Improving efficiency through lower mainland consolidation – An Overview” – October 2014

[3]  “Health care reform law not so devastating to Quebec anglos after all, says group” – CTV News – Feb 9, 2015


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