For years, Canadians have bemoaned the country’s slow adoption of innovative health technologies. Disparate regulations, lengthy procurement processes, and poor access to funding have kept many businesses looking to disrupt the healthcare sector behind the eight-ball of getting to market.
Now, in the midst of a global health crisis, the prospects for digital health adoption are beginning to look up. Since the COVID-19 pandemic disrupted daily life, governments have been working to ensure Canadians have safe access to healthcare, and are mobilizing the private sector to assist with the response.
“You’re seeing a lot of crystallization in terms of how the health sector and healthtech [startups] are finally figuring out how to go to market together.”
Social distancing associated with COVID-19 has highlighted the value of telemedicine services, also known as virtual care services, which allow patients to interact with physicians remotely. According to a recent survey conducted by the Canadian Medical Association, 47 percent of Canadians have used virtual care during the pandemic, and of these, 91 percent said they were very satisfied with the experience.
The uptick in adoption has been helped by new partnerships between the public and private sectors from coast to coast. From the Government of Ontario inking a deal with virtual care company InputHealth, to the federal government’s superclusters funding new projects in telehealth, an industry frustrated by commercialization obstacles is finally having a moment.
Joon Chan, partner in the audit and assurance group at PwC Calgary, said the silver lining of the COVID-19 pandemic is that it has highlighted how slow the process of healthtech commercialization has been to date. Chan predicted governments will be putting a stronger focus on the sector, even after the pandemic.
“You’re seeing a lot of crystallization in terms of how the health sector and healthtech are finally figuring out how to go to market together,” said Cameron Burke, managing director of the technology sector at PwC Canada. “If there’s a good news story out of all of this, [it’s the] virtual care explosion.”
Necessity as the mother of invention
In 2019, fewer than one in 10 family physicians allowed patients to book appointments electronically, fewer than a quarter made themselves available by email, and just four percent provided video visits.
COVID-19 has now forced both providers and regulatory bodies to turn to alternative ways of providing healthcare while limiting exposure to the virus. The demand for telehealth systems has boomed as a result, allowing the sector to finally execute on some of its long-awaited benefits.
“A lot of the recent deals have been in healthcare and I think you’ll see a new push towards it,” said Eugene Bomba, partner in PwC Canada’s technology practice. “I do think that the governments are going to start to also buy and change some of their behaviours, because Canada’s not going to get caught flat-footed like this again. I think you’re going to see some investments [from] the government side, and I think that healthcare will benefit big time.”
Last year, BetaKit spoke with members of Canada’s healthtech ecosystem who said the prevailing barrier to commercialization was the issue of procurement. With governments now flocking to telehealth to fulfill the overwhelming demand, securing the buyer is becoming much easier.
In March, Maple, a Toronto-based virtual care company, began offering online COVID-19 screenings covered by the provincially-run Ontario Health Insurance Plan. This was announced after the province activated temporary billing codes that allowed for phone and video screening visits during the pandemic.
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Speaking on BetaKit’s Black Swan podcast, Dr. Brett Belchetz, Maple’s CEO, said pre-pandemic, there was almost no public coverage for virtual care in Ontario, unless visits were conducted through the province’s existing telemedicine network.
“Provincial governments have now piled on,” Belchetz told BetaKit. “Now, this thing that they told us for years they were never going to pay for, and this was not going to happen, and if it ever happened, it would be in a very controlled manner – now, all bets are off.”
Existing provincial telehealth services are feeling the pressure, which has led to an increased reliance on private companies. Saskatchewan, for example, which has its own public telemedicine department called eHealth Saskatchewan, granted permission for digital health startup Lumeca to operate as a virtual care provider.
The pandemic has created a new necessity for many provinces whose healthcare systems have been overwhelmed by the surge in demand for remote care. Burke said as the payer models change, provincial health authorities will realize they don’t possess the technology to respond effectively, which is where startups can come in to provide value.
“If the province of BC [for example] wants to roll out virtual care, how are they doing it? Are they going to build some horrific tech platform or are they going to partner [and] choose the winner? …I think that’s going to be thematic across the country, and they have to happen quickly,” said Burke.
Breaking down bureaucracy
In addition to determining who pays for virtual care, another top challenge that has held telehealth companies back is Canada’s fragmented regulatory landscape in healthcare, as well as the outdated regulations that have prevented such services from realizing their potential.
Canada is one of the few Western countries that has 13 different healthcare jurisdictions, one for each province and territory. The United Kingdom, France, Germany, and Australia each have just one set of rules for their respective healthcare systems.
“Every regulation that made this a private service, all of a sudden kind of [came] melting down.”
– Brett Belchetz, Maple
“[Canada and the US] are the only two crazy countries where we say a Canadian doctor cannot treat people in another part of the country, because it’s a different province,” Belchetz said. “It’s insanity, and it makes it very hard to scale a business across the country.”
Belchetz said that now these disparate health authorities have no choice but to act quickly in the wake of COVID-19, some of the regulatory burden has dissipated.
“What we saw over the course of the last five weeks is every regulation that made [virtual care] a private service, all of a sudden kind of come melting down, either in a permanent way or a temporary manner across the provinces,” Belchetz added.
The procurement deal between startup InputHealth and Ontario Health was finalized in just over a week, a process that typically takes years to reach completion. Similarly, British Columbia hospitals quickly began using an app created by local startups Thrive Health and Traction on Demand. That province also implemented an order allowing for “the broader use of communications tools” for healthcare workers responding to COVID-19.
Burke said these sudden changes could drive real impact for the sector going forward.
“We talk about tech not being a sector, but being part of every sector. I think that was thematic, and now it’s like a life jacket, in a way,” Burke said.
A shift in attitude
In a global pandemic, keeping potentially infectious patients close to non-infected patients is no longer a tenable option, but as COVID-19 persisted, so have other health concerns. Belchetz said although the surge in demand for telehealth has been a welcome response to COVID-19, a shift in the Canadian mindset to virtual care is long overdue.
“It makes no sense whatsoever in our healthcare system that we force an 80-year-old who just needs a prescription renewal for their blood pressure medication to sit in a waiting room for three hours next to the guy with the flu,” Belchetz said. “We’ve done this for years and we wonder why everyone gets the flu.”
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“The social attitudes have obviously shifted,” he added. “And I think the main reason for the shift is the safety element.”
In Nova Scotia, the new president of Doctors Nova Scotia, an association representing physicians in the province, said virtual medicine has improved patient care in the province and should be permanent even after the pandemic ends. Burke said if this digital transformation continues, stakeholders will reap the benefits.
“If we can figure out a meaningful way to drive innovation with homegrown talent, there’s a huge upside there for health outcomes, but also for venture capital, entrepreneurs, and for patients,” Burke said.
Is virtual care here to stay?
This public health emergency means that almost overnight, virtual health care in Canada has gone from the sidelines to a starring a major role in the health-care system. Burke is bullish on the long-term prospects of digital health adoption for the foreseeable future, while others noted that challenges will remain.
For companies like Maple, COVID-19 has increased inbound interest from larger potential partners. Canadian retail giant Shoppers Drug Mart was funding online physician consults hosted on Maple’s platform. In its normal course of business, Maple had about 1,000 visits per day, on a busy day. That number increased to 4,000 virtually overnight, Belchetz said.
“So you’re looking at a situation where our business volumes and the strain on our business went up 500 percent, literally in the span of 24 to 48 hours… Every part of our business was exploding all at once.”
Burke said this will be an enduring challenge for digital health startups that will need to scale up quickly in order to prove their value.
“[The tech companies] all have bits and pieces, but they’re going to have to ramp up and scale really quickly to actually fulfill the demand that the provinces are going to put on them,” Burke added.
Although stringent regulations appear to have allayed for the time being, Belchetz said the reality is that they still exist, and it will be an ongoing concern for the startup.
“The priority right now, really, in our mind, 100 percent is to make sure that Canadians have access to health care. That’s… my top priority above and beyond anything else. Yes, those regulations and rules [are a] huge stress, we’ve got to keep up with it. But I’m not going to let that ever affect our ability to provide healthcare to all the people that are relying on us right now.”
Bomba said COVID-19’s impact on Canadian tech will not be limited to digital health, and that FinTech, e-commerce, and EdTech are all sectors that have long been ripe for disruption in what he called the “economy of essential services,” that could see Canada’s most outmoded sectors see some long-awaited transformation.
With files from Douglas Soltys.
Image source Unsplash. Photo by National Cancer Institute.