From public outrage to public trust Overcoming a

From public outrage to public trust Overcoming a Risk Disaster: Lessons Learned at Canadian Blood Services Ian Mumford Chief Operating Officer Canadian Blood Services To the Regulatory Craft in Nova Scotia Conference Halifax, September 30, 2008

Public trust: bedrock of the blood system Blood products are ubiquitous life-saving commodities Blood and blood components are freely donated, relying solely on public generosity and goodwill Some products have a shelf life of just a few days There are no effective substitutes for human blood Product safety and security of supply are the foundations of public trust in the system Any serious compromise to these foundations has dire, long-term consequences 2

The truths of trust Trust is never a goal unto itself Trust is earned by consistently meeting – but preferably exceeding – the expectations of customers, stakeholders and the Canadian public Focus on safe, secure, cost-effective, affordable and accessible supply of quality blood and blood products and trust will automatically follow A trusted individual or group is typically taken for granted 3

Canadian Blood Services’ Public trust model Points of change Points of influence (Internal) (External) Effective, visible change leverages influence Influence leverages trust 4

Public trust in the blood system is strong Public trust in 1998, had fallen to about 50% Percentage of Canadians expressing trust in the blood system managed by CBS (7+ on a 10 point scale) from third-party polling data 5

Overview An overview of Canadian Blood Services Starting afresh: vision for change Canadian Blood Services today: a transformation realized A glimpse into the future Risk management: foundation of quality How Canadian Blood Services manages risk 6

CBS at a glance COLLECTIONS MANUFACTURING DISTRIBUTION ~415, 000 Active Donors Production Testing Inventory R&D Education Serve 732 Healthcare Facilities • 872, 506 whole blood donations (freq = 2. 18) • 51, 770 apheresis plasma donations (freq = 8. 67) • 36, 179 apheresis platelet donations (freq = 5. 15) • 4, 700+ employees • Est. 600, 000 patient • 17, 000+ volunteers, transfusions a year ~250, 000 hours • 40 permanent collection sites • 19, 000 mobile collection clinics • 12 manufacturing centres • 3 blood-testing centres Fiscal 2007/08 7

Canadian Blood Services provides a broad range of blood-related services Blood operations: – Recruit donors, collect blood, manufacture components, test, distribute to hospitals Plasma program: – Collect plasma, custom fractionation, acquire plasma derivatives, recombinant proteins and synthetic equivalents Related Programs: – Education, research & development, clinical consultation One. Match Stem Cell and Marrow Network: – Linked to 51 other registries worldwide Diagnostic laboratories Insurance Captives: – Two wholly owned subsidiary companies to underwrite catastrophic loss Canadian Blood Services Fundraising Office: – To support and extend the mission of Canadian Blood Services 8

Basic blood facts Only 3 1/2% of eligible Canadians donate blood. Most common type: O Rh-Pos (31%) Rarest type: AB Rh-Neg (0. 7%) Highest demands: A and O Aligning supply and demands is a key issue because of limited shelf life of some products: – – Red blood cells: up to 42 days Platelets: 5 days Fresh frozen plasma for transfusion: 1 year Source plasma for fractionation: 10 years 9

Born in an environment of failure and scandal 10

Who is Canadian Blood Services? Founded in 1998 as the successor organization to the Canadian Red Cross For over 50 years, Canadian Red Cross operated Canada’s blood supply system Early 1980 s to mid 1990 s: – tainted blood scandal – largest public health crisis in the history of Canada Culminated in the Krever Commission of Inquiry on the Blood System in Canada 11

Krever recommendations set change agenda More openness and transparency Clear accountability Informed decision-making A national system under a single operator Sufficient funding and contingencies to eliminate risks from financial compromise Improved regulation and regulatory framework Better transfusion practices More R&D 12

…all to ensure that blood safety is paramount Krever Commission report emphasized the Canadian blood supply should be governed by five basic principles: – Blood is a public resource – Donors of blood and plasma should not be paid for their donations – Whole blood, plasma and platelets must be collected in sufficient quantities in Canada to meet domestic needs – Canadians should have free and universal access to blood components and products – Safety of the blood supply is paramount 13

The Commission of Inquiry on the Blood System in Canada Federal government determines need for a commission of inquiry Justice Horace Krever, appointed by Order in Council, October 4 th 1993 – to review and report on the mandate, organization, management, operations, financing and regulation of all activities of the blood system in Canada Justice Krever tables an Interim Report – – February 15 th 1995 43 recommendations focused on operational, technical and clinical aspects of blood system at the time Work on final report continues – – – 247 days of hearings from 474 individuals phase I – input from those infected with HIV or HCV phase II – national issues concerning historical actions and relationships phase III – organization of the blood system at the time appeals under Section 13 of the Inquiries Act caused significant delays final report released November 26 th, 1997 14

Legacy – Krever Commission of Inquiry 29 - 45: The Regulator – The Health Protection Branch Health Canada’s regulatory oversight over CBS has improved substantially: A series of recommendations aimed at the Federal regulator, arguing for: Attempts to make regulatory framework active and risk-based Active, risk-based regulation (intelligibly written) Commitment to adhere to its own performance standards for review (however resources constraints negatively impact CBS) Independent decision making that is accessible and open to public Permitting manufacturer to exceed standards Willingness to examine more streamlined approaches to review and approval Post-market surveillance (hemovigilance) Frequent and thorough inspections Over zealous inspection process, still very task focused rather than process oriented Adequate resources Limited evidence of openness of decision making International harmonization Active hemovigilance program developing 15

Blood safety: A broadly shared responsibility FEDERAL (HEALTH CANADA) • Regulation (Food and Drugs Act) • Establishment Licensure • Compliance and enforcement • National Disease Surveillance PROVINCES/ TERRITORIES • Funding of Blood Operators • Regulate Health Professions • Medical practice (hospitals) • Public Health OPERATORS (CBS/HQ) • Donor recruitment • Product collection, manufacture and testing • Acquisition, distribution of derivatives • One Match Registry OTHERS • Donors & Recipients • Non-governmental organizations • Advocacy groups • Health professionals SAFETY 16

Tragic and costly lesson Investment in blood safety is increasingly resource intensive Failure to invest in safety interventions costs far more than the interventions themselves – cost of loss of trust – cost of loss of supply – cost of compensation programs for injured 17

Picking up the pieces Collections had seriously declined Public confidence in blood was low and sinking Totally demoralized staff Operations consisted of 14 disconnected “silos” across Canada Decayed infrastructure and technology Inadequate quality systems 18

Canadian Blood Services: A new organization with a new governance model… Arm’s length, not-for-profit agency “independent” of government Regulator: Health Canada (Blood is classified as a drug under Schedule D of the Food and Drugs Act) Exclusively serve 9 provinces and 3 territories Funded by Provinces and Territories (except QC) Global budget; no charge to hospitals Operating budget FY 2008 -09 ≈ C$915 million 19

A clear sense of mission… Mission statement Canadian Blood Services operates Canada’s blood supply system in a manner that gains the trust, commitment and confidence of all Canadians by providing a safe, secure, cost-effective, affordable and accessible supply of quality blood, blood products and their alternatives 20

A clear mandate… Rebuild the blood system in Canada Regain the trust of Canadians in their blood supply Create risk management programs aimed at preventing future catastrophes (Province of Quebec established an independent agency in 1998, Héma-Québec) 21

Multi-step action plan to get from there to here Phase 1 – Transfer of legacy operations Phase 2 – Fully transform Canadian Blood Services into a truly national integrated servicedelivery organization focused on quality and service excellence Phase 3 – Evolve to a full-integrated national system based on real-time demand forecasting and advanced collections technology NOTE: All changes to Canada’s blood system take place amid a businessas-usual environment in meeting the nation’s blood needs 22

Since 1998, Canadian Blood Services has been transforming, strategically and continuously Phase 1 Phase 2 Phase 3 (1998 to 2003) (2002 to 2007) (2007 to 2012) Crisis Management • Restore trust • Restore safety • Rebuild core operations • Stabilize facilities • Manage crises • Tactical management Strategic Management • Become model for health care delivery • From blood manufacturers to “stewards” of the blood system • Embed strategy across organization 23 Realtime Integrated System • Real-time demand forecasting • Seamlessly integrated from hospital to donor • Widely deploy collection technology • Advance customerservice culture

Strategic change Transition Stabilize Transform Canadian Red Cross Society to Canadian Blood Services Gain understanding of major issues Determine requirements for change Re-engineer the system Regain trust and confidence in the blood supply April – Sept. 1998 Approximately 18 months 24 3 – 5 years

Phase 1 to Phase 2 Transformation Canadian Blood Services is a business in a state of profound change Successful transition from the previous operator and stabilization of major risks Comprehensive re-engineering of entire operation Transformation of: – – service delivery model support services business strategy corporate culture 25

Changing the service delivery model Disconnected “Centres” eroded by cost, time and circumstances into islands of duplication 26

Traits of the silo model 14 disconnected “silos” across Canada No consistent operational look and feel No coherent strategic approach to the business Major management skilldeficits No big picture of problems and solutions Process and structural duplication Obsolete IT infrastructure Lack of operating metrics Error-prone manual systems Many inconsistencies 27

Changing the service delivery model Silo model Integrated national model Context: quality and risk management 28

Today’s effective, efficient and interconnected national service-delivery model 29

Features of the new service-delivery model Fully integrated national network of: – collections, testing, production, labeling, distribution Comprehensive metrics, process improvement Single national inventory – improved supply-demand alignment Upgraded planning, budgeting and financial controls Comprehensive use of information technology to improve safety and accountability – e. g. MAK Progesa, advanced modular testing Fully integrated donor management to improve supply – national marketing and communications, national/local branding, advertising, media relations, proactive National Contact Centre, intensified donor development with a strong community focus Improved hospital relations 30

Getting the right things done To ensure successful execution of the ambitious change agenda, Canadian Blood Services has adopted the Balance Scorecard Rigorous methodology that promotes efficient and effective strategy development, strategy communication, corporate alignment, priority setting and strategy execution Balanced Scorecards developed at all levels of governance: – Board of Directors, CEO, Corporate level, Senior Executives and all Divisions – designed to increase likelihood of successful execution of the strategy 31

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We have accomplished a lot … Safety NAT, WNV, bacterial testing Security of supply Increased collections and improved ability to meet hospital demand Consolidation and standardization Testing, production, tele-recruitment Automation MAK, PRISM, SAP, … … Employee satisfaction Improved communications, benefits enhancements Infrastructure New and renovated facilities Relationship management All key stakeholders Public involvement National Liaison Committee, Regional Liaison Committees, advisory committees 33

Results amid change: the new model in action CBS year-over-year increases in core funding have declined below the general Health Care rate yet we have delivered increased value to Canadians CBS has increased operational effectiveness. Collections have grown more than 20% since 2000 CBS has delivered major operational efficiencies. Collections per employee have grown more than 14% since 2000 34

Trending upward Safe to Receive blood Safe to Donate blood Public trust in the blood system restored by emphasizing risk management, product quality and safety, operational transparency and accountability, and customer service 35

Risk management: the foundation of quality Premise of Transformation is to create a high quality organization, delivering safe products and services in the most efficient manner possible This is about much more than quality assurance, quality control, quality compliance or quality policies Quality is to be a core competency of Canadian Blood Services and central to the culture of the organization – compliance is simply the cost of entry into the business – quality simply makes good business sense Objective is to become the “Toyota of blood manufacturers” worldwide 36 39

Evolution to quality system maturity Manage resistance to change Priority given to quality system implementation versus other strategic initiatives Ability to demonstrate benefits Cultural shift: From To • Activity focused • Process oriented • Regulatory compliance • Good business practice • Passive senior management • Active process ownership • An obstacle and burdensome to day-to-day activities • Management tool that enables change & improvement 37 46

Risk Management Seeks to assess and control the hazards that make up a risk domain Relies on scientific risk assessment to estimate the probable harm to persons and environments resulting from specific types of substances and processes Key activities: – – – Hazard characterization Exposure assessment Benefits assessment Uncertainty analysis Options / decision analysis 38

Risk Issue Management A response to a specific public controversy about the adequacy of risk management measures and approaches Typically becomes the subject of a protracted battle among stakeholder interest groups – Competing visions as to where the optimal resolution lies Key activities: – Risk communication – Stakeholder relations 39

Risk management framework 40

Risks in blood and plasma systems Freedom from transmissible harmful agents (THAs) Adequacy of supply Control of the system 41

Safety measures intended to interdict HIV Belts and suspenders approach to safety Successive measures aimed at risk reduction are increasingly complex, expensive Incremental risk reduction is increasingly small 42

Safety measures introduced to Canadian blood supply since 1998 Viral testing using: – state of the art, automated testing platforms (PRISM®) – nucleic acid testing program (NAT) for HIV, HCV – West Nile virus testing Universal prestorage leukoreduction Deferral criteria for v. CJD Bacterial detection assays State of the art information system to manage entire supply chain, from donor recruitment through to product shipment (MAK Progesa®) – ensures complete product traceability – minimizes risk for error due to operator variability 43

Successful outcomes favour the prepared Multiple aspects: – business continuity planning: • labour disruption • adverse weather conditions • loss of systems – disaster recovery planning: • manmade (e. g. 9/11, Aug 2003 blackout) • natural – emergency preparedness: • bioterrorism • emerging transmissible harmful agents (e. g. WNV) • public health threats (e. g. SARS, Pandemic influenza) 44 48

Transforming Canadian Blood Services, a continuing process Phase 1 Phase 2 Phase 3 (1998 to 2003) (2002 to 2007) (2006 to 2012) Crisis Management • Restore trust • Restore safety • Rebuild core operations • Stabilize facilities • Manage crises • Tactical management Strategic Management • Become model for health care delivery • From blood manufacturers to “stewards” of the blood system • Embed strategy across organization 45 Realtime Integrated System • Real-time demand forecasting • Seamlessly integrated from hospital to donor • Widely deploy collection tech • Full customerservice culture

Looming challenge: the boomer bubble Impact of Aging Population ü Donor base faces rapid decline ü Product demand is escalating ü Both trends are intensifying and long-term 46

Collision course: demand-supply issues Demand Supply • Aging population • Increasing morbidity • Increasing medical procedures • Changing product mix • Population growth • Ethnicity • Expanding role of the blood business • Global competition for plasma and fractionated products • Aging population • Health-cost containment • Creating new donors • New pathogens • Increasing deferrals • Regulatory issues • System capacity, flexibility, scalability • Technology deficit • Skills deficit • Supply management • Blood’s competitive brand profile 47

The way forward: “A Blueprint for Excellence” New enhanced relationships with hospitals Real-time demand forecasting Optimized collection, production and distribution model Hub-and-spoke production and distribution More new technology for collections Collect only what hospitals need Achieve donor service excellence Elevate public mindshare on the crucial importance of blood donations 48

Summary Canadian Blood Services has come a very long way since its crisis driven inception: – safety and integrity of products – adequacy of supply – control of the system Well on the road to implementing a business strategy aimed at entrenching and sustaining a culture of safety, operational excellence and planning for tomorrow Robust systems in place for mitigating risks, emergency preparedness and contingency planning Continue to build on this foundation in growing the value of the blood system and earning the trust of Canadians 49

From public outrage to public trust Overcoming a Risk Disaster: Lessons Learned at Canadian Blood Services Ian Mumford Chief Operating Officer Canadian Blood Services To the Regulatory Craft Conference Halifax, September 30, 2008