Health System Savings

Generating cost savings

Through improvement initiatives and close collaboration with partners, 3sHealth has generated significant cost savings for the health system. Savings from provincial procurement initiatives, contract rebates, the provincial linen service, and dictation and transcription services not only strengthened the quality of products and services, but also saved $57.6 million in 2018-19. 3sHealth’s shared services initiatives, which began in 2012, have resulted in savings of $362 million as of March 31, 2019. These savings not only benefit patients, but they also provide better value for Saskatchewan taxpayers.

 


Savings are largely the result of:
  • Provincial contracting, which is a collaborative process with the health system that has reduced the cost of medical surgical supplies, drugs, and services while improving or maintaining quality and safety for patients, families, and staff. Costs are reduced largely through the consolidation of purchasing volumes to drive discounts;
  • Implementation of the provincial linen service, which has produced health system savings of $50 million in capital cost avoidance and an estimated operational savings of $4.18 million annually; and
  • Implementation of the provincial dictation and transcription service, which uses voice recognition technology. Savings to date have been used to pay off the initial project investment. The project was paid off in July 2018, with subsequent savings passed on to 3sHealth partners and/or redirected to the deployment of self-edit dictation software.
 
As of March 31, 2019, 3sHealth generated $57.6 million in shared service savings in 2018-19. This figure includes:
  • $49.5 million in recurring savings/from prior years;
  • $8.1 million in net new savings, consisting of:
    • $1.6 million in contract savings;
    • $5.6 million in contract rebates; and
    • $0.9 million in operational savings from Provincial Dictation and Transcription Services, and Provincial Linen Services.
Historically, 3sHealth received its revenue from a combination of fees for services as well as Ministry of Health funding. As of April 1, 2018, 3sHealth no longer receives funding from the Ministry. Instead, 3sHealth implemented a self-sustaining funding model, which allowed 3sHealth to gain revenue through fees for services as well as contract rebates and dividends generated through the provision of provincial contracting and linen services.

Savings methodology

To provide additional assurance to our stakeholders on the savings we report, we engaged MNP to perform an external audit. MNP’s audit opinion and the statement of cumulative savings for the seven-year period ended March 31, 2017 can be accessed here:

  Health Shared Services Saskatchewan - Statement of Cumulative Savings

  Annual and cumulative savings calculations explained