In 2016–2017, Canadian Blood Services delivered against a set of clearly defined strategic priorities while continuing our ambitious, multi-year transformation. As we work to maintain the highest standards of operational excellence, we’re also evolving quickly in anticipation of what lies ahead.
The challenge of balancing immediate needs with longer-term goals is one we share with other providers of biological products, and indeed with all organizations that face rising expectations driven by social and technological change. At the same time, we’re acutely aware of the fiscal pressures constraining Canada’s health systems. Provincial and territorial governments constantly weigh the demand for promising new drugs and treatments against the realities of tight budgets and their responsibility to keep costs under control.
We can point to many areas of significant progress over the past year, from the continuing automation of our supply chain processes and the enhancement of our infrastructure to better meet Canadians’ needs, to new ways of connecting with the donors of the future and deepening engagement across our own organization. Within a crowded roster, three points of focus merit special attention: the maturing of our approach to managing quality; the tangible returns from our efforts to boost productivity and efficiency; and our proposed plan to secure a sufficient supply of plasma for Canada.
Over the past two years, we’ve been migrating to a quality management system that will ultimately place Canadian Blood Services among the world’s leading manufacturers of biological products. In 2016–2017, we began to see evidence this initiative is creating fundamental shifts across our organization.
Guided by a plan introduced during the previous year, we’ve implemented a new process for corrective and preventive actions (CAPAs). Addressing any departures from policies and procedures with prompt, effective solutions, CAPAs are critical to continuous improvement while ensuring donor and patient safety. Managers and their teams are now integrating rigorous CAPA requirements into all of our activities — not only in production areas, but throughout the enterprise. The resulting transformation of our culture is yielding measurable results: at year-end we met every target on our annual quality performance index for the first time ever.
Another area where we’ve made substantial progress is improving productivity and efficiency. We’ve taken a multifaceted approach, combining lean management techniques and continuous process improvement with technological innovation and organizational redesign. And the positive results can once again be quantified.
Since 2008, Canadian Blood Services has committed to realizing a total of $170 million in cost savings and avoidance. By the end of 2011–2012, we had achieved our first milestone of $70 million. As of our latest year-end, the cumulative impact of all cost-reduction initiatives totalled $108 million.
These savings mainly apply to the part of our budget allocated to fresh blood products, where spending has remained flat or decreased for the past seven years. However, there is a larger area of expenditure — amounting last year to $678 million, or about 55 per cent of our annual operating costs — over which we have limited control: the cost of plasma protein products (PPPs). Although we tightly manage sourcing and distribution, in 2016–2017 the cost of these products rose by nearly nine per cent, year over year, largely due to increased utilization.
Canadian Blood Services also has a responsibility to help secure a reliable source of the plasma needed to manufacture PPPs. The plasma we collect from donors, while sufficient to meet Canada’s transfusion needs, only accounts for about 15 per cent of what is required for processing into immune globulin (Ig) products. We meet the rest of our Ig requirements by purchasing finished drugs from pharmaceutical companies in the U.S. and overseas. As demand for these products expands globally, we face a higher risk of supply interruptions and rising costs driven by international competition, especially from emerging markets.
In January 2017, we presented a comprehensive business plan to federal, provincial and territorial ministers of health entitled Ensuring Security of the Canadian Plasma Supply for Immune Globulin. We developed our plan using a risk-based decision-making framework that considers all aspects of a challenge, from cost-benefit calculations to ethical issues. Our disciplined methodology took into account the perspectives of diverse stakeholders, including patients whose health depends on plasma protein products, as well as potential donors, clinical practitioners and health-system leaders.
The plan we’ve tabled reflects our commitment to understanding and protecting the interests of all Canadians. We will continue working with our government partners to help ensure Canada maintains an appropriate level of independence to safeguard our future plasma supply.
This annual report examines many other dimensions of our progress over the past year as we’ve built on our successes and closely analyzed the things we do well — large and small — to find ways of doing them even better.
For example, the lean management techniques we’ve developed through our unique collaboration with Toyota are now being adapted and rolled out across all areas of our operations. Similarly, the digitizing of information flow in our collection sites is just one aspect of a broader digital strategy that will transform information sharing, collaboration and decision-making across Canadian Blood Services over the next few years.
The ambitious transformation initiatives we’ve launched throughout our organization are producing tangible positive results. And while there are still some challenges ahead that will take time to overcome, we remain focused on our strategy for delivering concrete, lasting value to Canada’s health systems. All indicators show we’re on the right path to achieve our long-term goals. Supported by a team of talented, highly engaged people — and empowered by the trust that Canadians have placed in us — we’re meeting today’s rapidly changing needs while constantly keeping an eye on tomorrow.
Chair, Board of Directors
Dr. Graham D. Sher
Chief Executive Officer