According to a report in the Prince George Citizen, the BC Auditor General found that the province’s health agency was unable to substantiate the $230 million in alleged cost savings it claimed to have achieved through its procurement consolidation exercise:
VICTORIA – British Columbia’s auditor general was unable to determine whether a government agency in charge of supply chain purchasing for the province’s health regions is actually saving the money it claims. Auditor general Russ Jones set out to evaluate Health Shared Services B.C.’s claim that it has saved $230 million on procurement for the province’s health-care system. The agency, which is a division of the Provincial Health Services Authority, handles centralized purchasing for B.C.’s health regions in an effort to leverage lower prices. It also provides other services that are shared across the province, such as IT services. Health Shared Services B.C. claims to have saved $230 million in procurement between February 2009 and March 2013 — an assertion made several times on the agency’s website. But Jones said his office was unable to determine whether that figure is correct. He said purchasing data was inconsistent between the province’s different health regions, which meant it would have taken months to gather in a form that could be analyzed.
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“The problem is around the public reporting of this organization, just letting the public know that this is an estimate. It’s not for certain.” Jones said the agency should also provide the public with a detailed breakdown of how it calculated the estimate. No one from Health Shared Services B.C. was available for an interview, but interim CEO Douglas Kent said in a written statement that the agency accepts the auditor’s recommendations and will improve how it measures and reports its progress.” Going forward, (Health Shared Services B.C.) will continue to work with the health authorities to find ways to refine its public disclosure of projected procurement savings,” the statement said. Nevertheless, in a response included in the auditor’s report, the agency insisted the figure it has previously reported to the public is valuable. “While this is clearly not a metric of actual savings within the health-care system, it is in our opinion a reasonable metric,” said the response.
The story does not explain how the government agency could justify its savings metrics as “reasonable” when those metrics did not reflect actual savings.
