Transform withdraws from hospital supply chain business after cyber attack

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When hackers took down the systems of five Ontario hospitals, including Windsor Hospital, the Transform Shared Services Organization, which oversaw cybersecurity, suspended supply chain services to the targeted institutions. .

The agency handed over that responsibility, along with $5 million of its annual operating budget and one-third of its full-time staff, to a larger shared services organization called Mohawk Medvai.

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However, Transform board chair Helga Reidel said the sale of staff and services was unrelated to October's devastating cyber attack. She said Transform's board of directors began discussing the transition with member hospitals last summer.

“It has nothing to do with a cyberattack,” Reidel told the Windsor Star.

“In fact, there were concerns that this would not be possible due to cyberattacks. However, that was not the case. We were able to achieve all of our original goals.”

Effective April 1, Mohawk Medbuy will be a supply chain services provider for Bluewater Health, Chatham-Kent Health Alliance, Erie Shores HealthCare, Hôtel-Dieu Grace Healthcare, and Windsor Regional Hospital.

These are the same hospitals that announced on Oct. 23 that they had been hit with a cyberattack, along with shared service provider TransForm.

A major ransomware attack brought down systems at all five hospitals, delayed procedures and forced many patients to leave their hometowns for treatment.

The hackers also stole tons of sensitive information and posted it on the dark web after the hospital refused to pay the ransom.

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Reidel did not mention the cyber attack. Transform officials, including CEO Lynn Baruyot, have refused to speak publicly about the hack since it began.

The CEOs of the five hospitals said at a joint press conference earlier this month that 326,000 letters had been sent to patients whose information had been stolen and posted online.

Transform said it would not address the cyber attack and would continue to provide the digital health and information technology services it has provided since its five member hospitals founded in 2013. Rydell said no other business sales are planned.

“Digital IT is still TransForm, and hospitals are repeating it,” she says. “So we're not going to make any other changes.”

At the last hospital joint media conference, Christine Kennedy, CEO of Erie Shores Healthcare in Leamington, said the hospital remains committed to transformation.

“We are transforming. Hospitals are transforming,” Kennedy told reporters.

Reidel said the sale of supply chain services would mean a $25 million reduction in Transform's annual operating budget, which covers things like office costs and salaries.

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“Our annual budget expenditures will be reduced by the amount we would have been spending on procurement staff and supplies needed by our staff,” Riedel said. “That would reduce the budget.”

Juhaina Helmy, communications specialist at Transform, said the hospital's approved budget for existing supply chain and accounts payable operations that will be transferred to Mohawk Medbui is about $5 million.

In addition to its operating budget, Transform spends about $749 million a year in taxpayer money, most of which goes to supply chain services taken over by Medbai Mohawk.

These services include collaborative group purchasing, requests for proposals, bidding and accounts payable, as well as a full range of procurement tailored to individual hospital needs.

“Medvai will bill hospitals directly for the agreed amounts and services performed,” Reidel said. “Transform will no longer receive that funding.”

Reidel said the transition of supply chain services follows government directives to streamline processes.

“The state was encouraging all hospitals, even on a state level, to move to an integrated supply chain,” she said. “Mohawk Medbuoy is very large and has taken over procurement for many hospitals.

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“We were just another piece of the puzzle to consolidate all of our procurement within the state. So it was really a directive from the state to make this move.”

Mohawk Medbuoy currently lists more than 60 hospitals, long-term care facilities and health authorities as members on its website.

The sale of TransForm comes in the wake of Mohawk Medbuy's acquisitions of other shared services organizations, including Plexxus, St. Joseph's Health System's group purchasing organization, Northern Supply Chain, Shared Support Services Southeastern Ontario (3SO), and Shared Service West. .

Reidel said the recent development with Transform is not an acquisition. Mohawk Medbuoy and Transform remain separate entities, she said.

However, Mohawk Medvai employs about 50 former Transform employees.

Before the sale, Transform said on its website that it had 147 full-time employees and 62 part-time employees. However, the organization has also been hiring to fill positions in other parts of its business since the cyberattack.

“There were approximately 50 employees who transferred to be employed by Mohawk Medbuoy,” Reidel said. “They all had job offers. I think all but one accepted the position.

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“So they're currently working for the Mohawk Tribe, and their salaries and all of the funding for that goes to the Mohawk Medbuoy.”

Reidel said Mohawk Medbuoy will also take over the lease of the Chatham office and supply warehouse previously operated by Transform.

“The employees are still at the Chatham location and are now working at Mohawk Medbuoy,” Reidel said.

“Staff are still working on this transition. Obviously, we're not going to flip a switch and have it happen overnight. But we're confident that within the next month or so, an agreement will be signed and everything will be relocated. I expect it to be resolved.”

twilhelm@postmedia.com

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