Why I Struggle to Innovate in Healthcare in Canada

By Eric Gombrich
ITAC Health Membership & Program Development Committee

Eric Gombrich

Eric Gombrich

Canada is an incredible country.  We maintain one of the most sought-after standards of living, and an exceptional quality of life.  We even have a pretty good healthcare system, regardless of the various rankings based on narrowly-defined criteria.

We also have one of the most active and prolific scientific environments in the world, supported by world-class institutions, researchers, academics, and funding (both government and private).  We have numerous examples of our innovation prowess, including some of the world’s leading oil & gas exploration technology, mining solutions, Research in Motion (Blackberry), and even the islet-transplant procedure developed for diabetics in Edmonton.  On the surface, Canada is a nirvana for innovation.  But if your area of focus is healthcare, go a bit deeper and that nirvana quickly disappears.

Most formal definitions of innovation extend beyond simply ‘invention’ and ‘development,’ and extend into commercialization.  It makes some sense, after all; an invention no one will pay for is, well, worthless.  And this is where our healthcare systems trip-up the brilliant engineer or entrepreneur from being successful.

First, you’ll note I mention healthcare systems – plural.  That’s because we actually have 10 healthcare systems each controlled provincially, plus those in the territories.  And don’t forget about First Nations healthcare which is governed by Health Canada, a Federal agency.  In essence, each of these is itself a micro-market into which goods and services are sold.  But because each market has its own objectives, priorities, budgets, etc. they might as well be independent countries.  This often times results in goods and services being developed locally in a province, with limited capacity to export to even adjacent provinces, let alone nationally or internationally without significant capital and development investment.

Secondly, because healthcare is government controlled, any purchase has to go thru a laborious, expensive, and time-consuming ‘procurement.’  Known as the Request For Proposal (RFP), these can take upwards of 12-18 months to pursue before any ‘transaction’ can take place.  Because of the investment by the buyer, they are often times unwilling to procure (aka, buy) unproven solutions, and this steers them away from innovative and novel solutions.  This often appears as mandatory RFP requirements for ‘references.’  This is almost a declarative position against innovation.

Thirdly, as an extension of the procurement and budgeting challenges, often times a solution may not exist in healthcare not because it doesn’t exist, but because provider organizations (e.g., hospitals) can’t buy them.  So a local inventor or engineer will build it for them at a lower cost, often times naively thinking they have discovered some new solution with broad-scale appeal.  The reality, however, is that you’ve not invented something new, you simply sold it at a lower cost to a budget-constrained or RFP-shy customer.

Combine these realities, and as a capital-limited entrepreneur or innovator, how does Canada foster an environment of innovation in healthcare, when I could put forth an equal level of effort in the US, and with success, instantly be able to expand my sales efforts to a nation 10-times the size of Canada, let alone any individual province or territory? Sure, doing the engineering and development work in Canada might be appealing, but the commercialization component?  I’m inclined to look elsewhere for that component of my innovation strategy. And to add insult to injury, doesn’t this mean our Canadian healthcare systems will invariably be following, rather than leading in terms of health & wellness?