How to make Canada a health innovation nation

Published On: September 2016Categories: CSPC 2016 Featured Editorials, Editorials


Zayna Khayat, PhD


Senior advisor, Health System Innovation




 The federal government has a bold vision to rebrand Canada as an innovation nation. However, the reality is that you can not play to win in every economic sector that is being transformed by innovation. Although we typically do not like to pick winners, I suggest we focus on transforming Canada into a global health innovation hub.

Like many rapidly evolving service sectors, healthcare is in the midst of a secular transformation that encompasses five critical shifts in the ways that health services are designed, delivered and financed.

  1. We are increasingly focusing on proactive and preventative actions to create human health, rather than on reactive measures delivered by hospitals and medical professionals to restore health when sickness happens.

  2. Healthcare services and therapies are becoming more personalized, targeted and configurable, rather than one-size-fits-all (and therefore one-size-fits-none) approaches.

  3. Enabled by technology, medical service delivery is moving from a centralized, institutional bricks-and-mortar modality to the three Ds: decentralized, dematerialized and de-physicalized.

  4. Consumers are leveraging an increasing sense of empowerment to reorder the traditionally paternalistic power balance they have with their healthcare providers.

  5. The financial structure is shifting from buying healthcare products and services by unit or volume to paying in a value-driven model—that is, paying for the outcomes or results.

These five shifts are global trends. The question federal policy-makers are currently facing is how to capitalize on—and, indeed, get ahead of—these shifts as a means of leveraging our $219-billion healthcare spend to not only improve the quality of Canadians’ lives but also to foster innovation, sustainable economic growth and export activity.

The case for pivoting Canada’s health innovation policy is further reinforced by two seemingly contradictory observations.

On the one hand, we are very well positioned to take advantage of this transformation thanks to Canada’s sustained investment in biomedical research, its healthcare delivery infrastructure, its well-trained and highly skilled healthcare workforce and its large repositories of health data—“from womb to tomb”—that can be found in provincial single-payer insurance systems, all connected by a single, unique identifier.

On the other hand, Canada—unlike smaller industrialized nations such as Denmark, Netherlands, Israel and Switzerland—has not produced a global health industry brand despite punching at or above our weight in our investments, biomedical research and development, infrastructure, healthcare workforce and support for emerging health technology startups.

Indeed, if Canada aspires to become an innovation nation, innovative Canadian health firms will need to emerge as global pacesetters in the new health economy. Policy-makers (both health policy-makers and economic policy-makers) would be well advised to shift their attention away from trying to win in traditional product categories (like drugs or medical devices who’s industry boundaries are already blurring) and toward cultivating the next generation of high-growth companies in a handful of emerging spaces at the boundaries of traditional health industry verticals.

  • Proactive health: Investments should be made in public health initiatives, as well as in firms whose products or services are geared toward keeping people well by leveraging advances in behavioural economics, data mining, wearables and sensors, social media and artificial intelligence. This includes home-based technologies, such as Cogniciti, a self-assessment tool that detects very faint early signals of cognitive decline, and LEAGUE, a Toronto firm that is challenging the current business model of employee-sponsored health insurance.

  • Personalization: The demand for healthcare that is more tailored to the individual is an innovation driver with potential opportunities in both biomedical/therapeutic and social contexts. For instance, GeneYouIn is an Ontario firm that enables pharmacists to draw on genomic data to evaluate whether individuals are able to metabolize more than 60 commonly used United States Food and Drug Administration–approved medications, resulting in individualized patient drug response profiles.

  • Virtual health: Officials from Kaiser Permanente, one of the world’s top health systems, recently announced that more than 60% of all interactions with patients will be conducted virtually by 2018, creating associated savings in physical infrastructure (hospitals, clinics etc.), as well as improved access and experiences for its plan members. Here in Ontario, less than 10% of primary-care consultations are conducted virtually. A range of solutions is emerging from passionate startup founders (many of whom are clinicians themselves) who are geared toward enabling greater and improved virtual interactions between consumers and providers. Akira and Ask The Doctor, for example, both provide fee-for-service online medical consultation services.

  • Disintermediation: As health resources shift toward prevention and chronic disease management, the various facets of healthcare service delivery will be increasingly pushed down to the individual and their families and communities, with a reduced gate-keeping role for highly trained clinicians and capital intensive institutions. Innovative firms are driving innovation in this area by developing solutions for delivering specific services—such as blood pressure or diabetes checks, flu shots, etc.—either in the home or at local pharmacies. Self Care Catalysts is one such firm. It provides chronic disease self-management tools for tracking health metrics and monitoring behaviours.

  • Business Model Innovation: The move to more empowered patients interacting with health services via digital networks and portable devices creates an opportunity to re-engineer the health payment system and improve the alignment between payment and outcomes. InputHealth offers a suite of practice management and patient-interface services that measures outcomes instead of only inputs, making it easy to know if what you are investing in is working.

Innovation supply is not enough to win in the new health economy: government innovation

If Canadian health entrepreneurs, investors and consumers are to take advantage of the emerging hot spots that are bringing global healthcare into the 21st century, our governments will also have to innovate their existing government structures and policy frameworks to allow these new industries to take off.

For example, federal and provincial/regional health agencies could look to innovate on the current business models for buying health services and products. One market instrument that is starting to get traction is the use of social impact bonds as a means of driving prevention and improving the social determinants of health. Another business model innovation is structuring risk-sharing agreements with industry innovators. It is time for healthcare payers to double down on re-architecting business models toward buying the outcomes rather than the inputs.

We also need to find ways of unlocking greater value from the incredibly rich data that resides in the healthcare system by allowing it to flow to patients and to serve as a driver of both innovation and improved health self-management.

Finally, all levels of government should come together to develop procurement strategies that not only deliver goods and services to healthcare institutions, but that also put the approximately $219-billion healthcare spend to work as an economic driver, propelling local and regional young companies into global markets.

Ultimately, the case for pursuing such shifts comes back to the quality of life for Canadians. Cultivating globally competitive Canadian companies in these emerging innovation sectors will translate to the improved health of civil society, an increase in new health economy jobs and greater wealth and productivity, which are all factors that contribute to the prosperity of Canadian society. These strategies, while challenging, will produce the sort of virtuous circle that we should all demand from our collective investment in our own health. The time to begin forging that dynamic is now.