With an important dialogue expected to occur in the between Canada’s First Ministers and the Federal Government to renew  Canada’s Health Care Accord, the federal-provincial agreement that defined funding and health care services expires after 10 years, BDC Healthcare Fund turned to healthcare service providers, Hospital Administrators and CEOs, Physicians, Nurses, to inquire about their concerns and priorities.  Among other items, the top 5 invariably included a strong concern about the future of our healthcare system and the pressure from government to cut cost without adversely impacting patient outcome.

Building on this knowledge and connecting with most of Canada’s MedTech companies, tBDC Healthcare Fund learned that these companies develop Canadian innovation that is then implemented in hospitals in the United States.  As my partner Gary Bantle emphasized in his March 2014 post, the Canadian MedTech sector finds ways to accelerate commercialization in order for it to remain viable and continue to generate more Canadian success stories.  Adoption by Canadian hospitals, even those that are the source of innovation, is a slow and difficult process, a process that is all too often abandoned by companies.  Some of the most innovative medical technologies in the world have been developed in Canada (Novadaq, Cryocath), however since adoption in Canadian hospitals has been slow and difficult, many of these cutting-edge technologies have migrated across the border and been adopted in US hospitals (Monteris Medical).

Canadian governments contribute substantially to the research and development activities of these products and yet neither our governments, the payers in our healthcare system, nor Canadian citizens are the first to benefit from new technologies and products designed to improved patient outcomes and/or productivity.

STUDY GOAL: This study, co-sponsored by BDC Healthcare Fund and the Kauffman Fellows Program was designed to engage Canada’s Hospitals to contribute important data on how this country’s leading medical institutions adopt innovative, non-drug products.

The goal was to extract recommendations to improve patient outcomes and hospital productivity through better decision-making and procurement procedures of New Technology at Canada’s leading hospitals and to have the aggregated results contribute to the upcoming dialogue on Canada’s Health Care Accord.

All responses were anonymous. The aggregated results will be a springboard for the dialogue on Canada’s Health Care Accord.

STUDY DESIGN: A 35 question survey was created, in French and English, to determine whether innovation adoption in Canada’s Hospitals is about cost and economics, better patient outcomes and/or hospital productivity.  It also explored whether the appropriate procurement and decision-making procedures and Health Technology Assessment (HTA) are transparent and designed for optimal results. Demographic information of respondents was collected as well.

The survey was sent to 64 leading hospitals across Canada. A total of 11 responded (17%)[1].

DATA and ANALYSIS:  Of the respondents, 90% were teaching hospitals affiliated with universities and covered a wide range in services from small, regional institutions to large centres.

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Hospital IT budgets consistently accounted for most of the source of funding for innovation.  Very little was attributed to Foundation endowments and philanthropy. Half the respondents stated that their hospitals acquire new technologies several times per year, some fewer than once per year.  The areas where new technologies are acquired are presented below:

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While most hospitals do not have an innovation adoption strategy in place, most hospitals have annual Strategic Reviews or Needs Assessment to identify areas of needed improvement in procedures and techniques, productivity and/or patient outcome and that needs assessment has identified new technologies.

The process for leading the adoption of new technology is most often lead by the Administration/President/CEO’s offices and less so led by Physicians.

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When asked, ensuring patient safety was the most important criterion when evaluating new technologies with ROI second and Cost Reduction third.  Improving patient outcomes was tied with increased productivity and other parameters such as proven safety and ease of use.  Consistently, improving patient outcomes was ranked as the primary goal of innovation efforts with cost reduction as second.  Although deemed important, not every new technology needs to provide a positive ROI.

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Approximately eighty percent of responders claim that new technologies are mostly adopted after trial usage and the importance of training and user experiences was rated high when transitioning to the new technologies.

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While more than half felt that medical technology is outpacing ethics (the responsible use of the new technology), and that all believe that their hospital does adopt new technology in a responsible way,  not all hospitals surveyed have their ethics committees involved in the process of adopting new technologies from the start.

Nearly half of the respondents would like to see their hospital be a leader in adopting new technologies wherever possible and nearly half indicated that having the technology come from a Canadian centre of innovation and developed in Canada will influence their decision.

Most consider themselves to be “average adopters” of technology where they prefer not to leave products and processes that work well and change only when necessary so as to remain current and not be left behind.

When asked if the Federal and Provincial Governments implement policies or incentives that encourage the early adoption of Canadian innovation, most said somewhat but nearly half felt that better policies and incentives are required.  Specific funding earmarked for new technologies or to better incentivize early adoption.  Only a third of respondents felt that the budget could increase to adopt more than planned if a high ROI or pay-back was demonstrated however, it would depend on “balancing the budget”.

SUMMARY and CONCLUSION:

According to the World Health Organization, the last 100 years have seen a tremendous improvement and investment in public health, boosting life expectancy from 31 years in 1900 to 68 years in 2009[2]People are living longer but they are not necessarily living healthier. This growth in life expectancy combined with unhealthy dietary habits and sedentary lifestyles has dramatically increased the incidence of chronic health conditions and created a surge in both the demand and cost to deliver healthcare[3]Growth in the global population, especially growth in aging populations is spiking the costs of healthcare for most developed and developing economies.

Global economic pressures are also substantially impacting the healthcare market.  The combination of persistent low economic growth and high unemployment have resulted, especially in the US, with fewer people on private or employer sponsored health insurance.  In addition, healthcare specific inflation continues to outpace all forms of economic growth.

One of the hallmarks of being Canadian is universal access to healthcare.  Global news headlines has Canada with a healthcare system that is envied by many and often used as a benchmark for healthcare reform in private healthcare systems, most notably, the United States and the Affordable Care Act, popularly known as “Obamacare”.  Interestingly, what is wrong with the Canadian healthcare system, (long wait times, not enough physicians), is also being used as the benchmark for opponents of the Affordable Care Act and highlights many areas for improvement.  With Canada’s regional, provincial, and national governments preparing a renewal of Canada’s healthcare system, a focus on sustainability and increased productivity is anticipated.

As an early leader in developing Health technology assessment (“HTA”), Canada has recognized the importance of assessing needs alongside economic pressure.  HTA is intended to access new technologies with potential for patient improvement while considering medical, ethical, legal, social and cultural implications while remaining within budget[4]The results of the survey indicate that while Canadian hospitals are under considerable economic pressure and other constraints, economics alone cannot and does not drive the decision making process.  Decisions regarding patient care are moving toward evidence of improved clinical outcomes as well as best practices and clinical guidelines.  Cost remains an important factor and may delay access to new products and technologies.

As a world leader in healthcare delivery, Canada continues to strive toward a more productive and sustainable system for its citizens.  We’ve seen some initiatives including the MaRS Excellence in Clinical Innovation Technology Evaluation (EXCITE) program designed to provide companies with an evidence package to support approval in Canada as well as reimbursement that will hopefully facilitate adoption of innovation.  At this time, the renewal of Canada’s Health Care Accord should consider specific budgets dedicated to new technologies and products, identified during routine needs assessments evaluations, and create incentives that align adoption of innovation with better patient care and a reduction in overall cost. And why not even have some sort of “Buy Canadian” incentive similar to what our neighbours to the south have in place for many other industries. Canadians should be able to access technologies that were made in Canada, eh?

— Ela Borenstein

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[1] a 15%-20% response rate is typical and was anticipated.

[2] World Health Organization, 2011.

[3] Ibid

[4] CD Howe Institute Commentary 396

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Ela Borenstein

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