Value-Based Procurement at Southlake Regional Health Centre, Ontario, Canada

This case study centers on Southlake Regional Health Centre (Southlake) in Ontario, Canada, as it embarks on a journey toward value-based procurement (VBP). Robert Bull, Vice President of Finance, Technology & Innovation, sees an opportunity to transform Southlake’s traditional procurement process into one that generates value by improving health outcomes while managing departmental costs. Facing rising costs, inefficiencies, and declining satisfaction, Ontario implemented initiatives to enhance healthcare quality, accountability, and resource management and encourage innovation and strategic procurement. Bull initiated the VBP process by engaging physicians in the Cardiac Program to define and measure value, focusing on four dimensions: (I) economic benefits, (II) innovation, (III) operational improvements, and (IV) patient outcomes. Collaboration between physicians and vendors enabled the development of innovative solutions to enhance value, such as exploring dual-chamber pacemakers for improved outcomes and cost reduction. Southlake’s procurement team introduced a clinician dialogue process to connect purchased products with achieved outcomes, developing quality performance indicators (QPIs) aligned with these outcomes. A collaborative scoring matrix was created to assess vendors based on performance across 12 QPIs and proposed value-added solutions. The case describes a competitive dialogue process, with phases for planning, onboarding vendors, active dialogue, and post-dialogue engagement, ensuring fairness and transparency. This structured-yet-flexible approach fostered collaboration and co-development of innovations between Southlake and vendors. By engaging physicians and vendors, defining value dimensions, and implementing a competitive dialogue process, Southlake began demonstrating improved patient outcomes and delivering value to stakeholders.