HealthPRO Value Brochure

How we work and the value we provide

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About HealthPRO

HealthPRO is a national procurement services organization,

working on behalf of more than 250 member shareholders, who

are the hospitals, provincial health authorities and shared service

organizations from across Canada. Serving over 800 individual

hospital sites, we aggregate $1.6 billion in contract volume to

deliver the best value to members across the country.

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Our focus on quality Quality processes and products are central to everything we do. This is evidenced by our:

PRODUCT PREQUALIFICATION PROCESS

HealthPRO’s unique product prequalification process for Materials Management contracts ensures that products are first scored individually against predetermined criteria. Only products that meet or exceed these criteria are eligible to move on to the RFP process where financial value is taken into consideration. This ensures that only products that meet the rigorous clinical criteria are awarded a contract.

POST AWARD ASSESSMENT SERVICE

HealthPRO’s Pharmacy Post Award Assessment Service (PAAS) helps members transition to new contracts by identifying key differences between the new product on contract and the previous version. This service is of great benefit to frontline healthcare workers and their patients as quick recognition of the new product can prevent errors and improve patient care.

PRODUCT EVALUATION PROCESS

HealthPRO’s Pharmacy Product Evaluation committee, comprised of pharmacists and technicians, assess product quality as part of the RFP process. The committee considers such criteria as whether the product contains latex or preservatives, whether the generic name appears clearly, and whether the product has a lot number to ensure traceability. Human Factors methods are also incorporated to reinforce product evaluator objectivity, reduce adverse events and improve patient safety. Product quality represents a significant portion of the overall evaluation, followed by assurance of supply and vendor quality.

PRODUCTEVALUATION

dedicated committees

Product Evaluation

PRODUCTPREQUALIFICATION

Product Prequali�cation

Post award assessment

ongoing quality assurance monitoring

contract decision algorithms

QUALITY

quality standards leadership

PRODUCTEVALUATION


Product Evaluation






QUALITY


OLDNEW

ONGOING QUALITY ASSURANCE MONITORING

HealthPRO is actively involved in monitoring the quality of our contracted products throughout the contract lifecycle. At any time, members can submit pharmacy product concerns through the online HealthPROCONNECT Portal and Materials Management concerns by submitting a form via email to HealthPRO staff. We review these concerns and work with suppliers to affect change and achieve a resolution, thereby promoting greater patient safety.

CONTRACT DECISION ALGORITHMS

HealthPRO has developed contracting decision algorithms to mitigate risk across all contracts. These rigorous processes are HealthPRO policy.

QUALITY STANDARDS LEADERSHIP

As a national procurement services organization, HealthPRO has spearheaded and participated in many multi-stakeholder initiatives to promote quality and patient safety. Examples of our work to date include advancing the use of GS1 global standards to enhance patient safety and traceability and chairing the Contract and Procurement Best Practices Working Group as part of the national Multi-Stakeholder Steering Committee on Drug Shortages.

DEDICATED COMMITTEES

Clinicians, pharmacists, business professionals and subject matter experts from across HealthPRO’s membership provide direct input into our product and service evaluations, contract strategies and award decisions.

PRODUCTEVALUATION


Product Evaluation






QUALITY


PRODUCTEVALUATION


Product Evaluation






QUALITY


PRODUCTEVALUATION


Product Evaluation






QUALITY


PRODUCTEVALUATION


Product Evaluation






QUALITY


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Our business model

Supplier Rebates(98%)

Membership Fees (2%)

Our business model is simple. We have two sources of revenue: supplier volume rebates (98%) and

membership fees (2%). The latter is charged annually to remind members of their commitment.

HealthPRO does not retain any profit; revenues less operating expenses are returned to members as

patronage dividends based on their contract participation. This model allows hospitals to participate

with HealthPRO at no cost.

SUBSTANTIALLY REDUCED INVOICE PRICES By aggregating our national collective volumes, we substantially reduce the invoice prices of products purchased by hospitals, resulting in hundreds of millions of dollars in direct invoice price savings.

100% OF PROFITS ARE RETURNED TO MEMBERS Revenues less operating expenses are returned to our members as a patronage dividend based on the rebate revenues earned through participation in our contracts.

EFFICIENT More than $0.80 of every rebate dollar is returned to our members. Our national operating costs represent less than 1% of annual contract value, demonstrating an exceptionally efficient service.

ACCOUNTABLE HealthPRO is a private company registered in the seven provinces and territories in which we do business. We are directly accountable to our member shareholders and our Board of Directors, made up primarily of Executives from the hospitals and Health Authorities from within our national membership.

AGILE We listen, and we adapt. HealthPRO has the organizational agility and flexibility to respond to the evolving needs of our members.

DIVIDENDS

CONTRACTCOMMITMENT

Price Savings Dividends

100% pro�ts returnedto members

E�cient AgileAccountable

Contract Commitments

Con�dentialityE�ciencies = greatermember savings

Resource e�ciencies

DIVIDENDS

CONTRACTCOMMITMENT







DIVIDENDS

CONTRACTCOMMITMENT







100%

S

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Cost savings, revenue and efficiencies delivered to hospitalsHealthPRO delivers hundreds of millions of dollars of value to Canada’s hospitals in direct invoice price

savings, patronage dividends and resource efficiencies.

Through our national aggregated volumes, HealthPRO is able to substantially reduce invoice prices, generating direct savings for hospitals that can be re-directed where it is needed most – frontline patient care.

PRICE SAVINGS DIVIDENDSDIVIDENDS RESOURCE EFFICIENCIES

Our business model generates additional revenue in the form of supplier rebates, which we return directly to our members through a quarterly patronage dividend.

Spaid to members since 1996

By managing a portion of the procurement process on behalf of our member hospitals, we generate significant resource efficiencies.

10% Estimated MORE THAN A QUARTER BILLION DOLLARS

Rebates and lower invoice prices

Rebates are not at the expense of direct invoice price savings.

Year over year, we demonstrate that pricing continues to decline

as rebates go up.

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What are rebates and how do they work?A rebate is the return of a portion of a purchase price by a seller to a buyer, on purchase of a specified

quantity, or value, of goods within a specified period. The rebate percentage is part of the contract

award, agreed to in express terms in writing at the time of original sale. Rebates are an accepted

practice and exist across many sectors, including retail, automotive and foodservice.

At HealthPRO, rebates are part of the competitive Request for Proposal (RFP) process. The financial

value component of the RFP weighting criteria is the net of invoice price less rebate. A higher rebate

alone cannot determine the result of the financial component.

Rebates in the context of HealthPRO’s contracting process: ensures CLARITY and TRANSPARENCY

HealthPRO posts a Request for Proposal.

Suppliers voluntarily propose rebates as part of the competitive contracting process, because of the value they derive by contracting with HealthPRO.

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HealthPRO awards the contract. 3

Hospitals purchase from the contract. 4Rebates are paid to

HealthPRO. 5

HealthPRO deducts operating

expenses. 6

HealthPRO returns patronage dividends

to members based on their participation in the

contracts.

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Rebates are tracked by item and by contract to individual members, ensuring accountability and traceability.

DIVIDENDS

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SUPPLIERS GAIN EFFICIENCIES THROUGH HealthPRO Suppliers derive value from the efficiencies of doing business with HealthPRO (responding to one RFP vs. dozens issued by individual hospitals, provincial health authorities and SSOs across the country), allowing suppliers to offer lower pricing and a higher level of service. Without HealthPRO, suppliers would have to significantly increase their staff to manage the volume of RFPs and the sales process without our consolidation and commitment. This additional cost to the supplier would be borne by the hosptial in the invoice price of the product.

HealthPRO DELIVERS COMMITMENT AND COMPLIANCE HealthPRO’s high levels of commitment and compliance ensure that suppliers receive the business they were awarded. REBATES ENSURE A LAYER OF INVOICE CONFIDENTIALITY Rebates allow the supplier to reward the high volume and commitment HealthPRO delivers without compromising higher margins on lower volume clients. ADHERENCE TO PROCUREMENT REGULATIONSSuppliers are confident in our adherence to procurement regulations and our fair process.

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Why suppliers pay rebates

DIVIDENDS

CONTRACTCOMMITMENT







DIVIDENDS

CONTRACTCOMMITMENT







DIVIDENDS

CONTRACTCOMMITMENT







DIVIDENDS

CONTRACTCOMMITMENT






Resource e�ciencies If rebates were discontinued, suppliers would not apply them to invoice prices.

What you should know about HealthPRO’s rebates

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QUALITY + LOW INVOICE PRICE = VALUE HealthPRO’s contract decisions are not made on price or rebates alone. Product and supplier quality criteria are major components of our decision process.

AFTER COVERING OUR OPERATING EXPENSES, 100% OF REMAINING REBATES ARE RETURNED TO MEMBERS IN THE FORM OF PATRONAGE DIVIDENDS This is in addition to substantial invoice price savings generated by HealthPRO’s national purchasing power.

MINIMUM INVOICE PRICE SAVINGS ARE 10% PLUS REBATESRebates are not paid at the expense of savings; our contracts offer a minimum of 10% invoice price savings in addition to rebates.

REBATES ARE PART OF THE COMPETITIVE PROCESS HealthPRO does not require or mandate a fixed rebate percentage, administration fee or co-marketing fee.

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Why HealthPRO is an integral part of the Canadian Healthcare System

Supports HospitalInterests

Maximizes savings Creates income

Quick adaptation EquitablePurchasing power

NATIONAL PURCHASING POWER

Through our national collective volumes, we achieve exceptional financial savings.

CREATE REVENUE

We create additional revenue for hospitals by returning 100% of our profit in the form of patronage dividends. Since 1996, we have returned more than $360 million in patronage dividends to hospitals across the country.

VALUABLE SERVICES

We offer services to hospitals that would be resource-intensive to recreate on their own. For example, HealthPRO’s Post Award Assessment Service (PAAS) helps members transition safely to new contracts by identifying key differences between the new product on contract and the previous version. This service is of great benefit to frontline staff and their patients as quick recognition of the new product can prevent errors and improve patient care.

IMPACT ISSUES THAT MATTER

We offer a strong national collective voice on critical healthcare issues affecting hospitals across Canada such as drug shortages, standards and innovation.

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HealthPRO Procurement Services Inc. | 5770 Hurontario Street, Suite 902, Mississauga, ON L5R 3G5 | P: 905-568-3478 / F: 905-568-5283 | www.healthprocanada.com

Documents

HealthPRO Value Brochure