Prudently managing the funds entrusted to us
We demonstrate our commitment to serving Canadians through sound and transparent financial management.
Canadian Blood Services is a not-for-profit charitable organization that operates independently from government. We receive the large majority of our funding from provincial and territorial governments; the rest of our revenue comes from federal funding, revenue from stem cells provided to international patients and charitable donations.
As partners in health care across the country, we have an obligation to ensure that every dollar entrusted to us by Canadians is invested wisely and managed effectively. Optimizing cost-efficiency is one of three critical ways we deliver value, alongside improving patient outcomes and enhancing health-system performance. While our first commitment is to safeguard the processes, practices and systems that help us ensure the quality and safety of our products and services, we constantly look for opportunities to become more productive and maximize the impact of our investments.
Our productivity and efficiency journey
Fresh blood and other products and services
Since 2008, we’ve been focused on improving our productivity and efficiency. And we’ve made significant progress, through continuous improvement, consolidation and organizational redesign, integration of technology and digital initiatives, and successful procurement practices. Some of these initiatives are large, affecting all of our sites across the country over several years, and some are small, costing little and realizing benefits right away. While these efficiency savings are largely focused on fresh blood products, they also include diagnostic services, stem cells. and organ and tissue donation and transplantation.
We have committed to realizing a total of $170 million in cost savings and cost avoidance. Between 2008 and 2012, we achieved $70 million in cost savings, and we are working to achieve the other $100 million.
The following chart shows our productivity improvements between 2014–2015 and 2017–2018 in four key areas.
These improvements have helped us make steady progress toward our target. The chart below shows the trend of inflation and volume-adjusted savings that have been realized to date, and where we are now in relation to our goal. At the end of 2017–2018, we had achieved about $49 million of the $100 million target.
Our productivity journey continues. We set rigorous targets aligned with the fiscal constraints faced by health ministries across the country, and we constantly review and sharpen our own capabilities while benefiting from insights, benchmarks and best practices shared by other leading blood operators around the globe. The milestones of progress we’ve reached to date reflect our commitment to cost containment and give us confidence that we’re on course.
Plasma protein products
Canadian Blood Services uses its pan-Canadian buying power to bulk purchase PPPs. In 2017–2018, we awarded contracts to providers with the goal of delivering a diverse portfolio of products, reasonable choice and significant cost savings to governments. We were able to continue to offer patients adequate product choice and achieve future savings and cost avoidance totalling approximately $455 million. As a result, some patients have been required to switch to a different brand of product. We are committed to working with patients, physicians and suppliers to support the transition.
Historically, the contractual savings we’ve secured through procurement processes have kept the total program costs of PPPs stable, despite increasing utilization. But in recent years, even with substantial reductions in the unit cost of products achieved as a result of contract negotiations, growing utilization, coupled with a weakening Canadian dollar, have increased the total program costs, significantly outpacing these cost savings.