Digital Healthcare in Canada – A High Level Summary of a

Complex and Evolving Marketplace.

October 25, 2021

Will Falk, Fellow at Rotman SOM (U of T), WCH WIHV, CD Howe Institute
@WillFalk
Technical
Architecture
• Fortunately this is not a Tech Arch
presentation
• But it is useful to remember that
there is a lot of very complex
existing stuff underlying the
business conversation we are
having
• This is no different than legacy
problems that are faced in other
industries you may be familiar
with (e.g. banking or telecom)
Individual Clinic
Tech Arch
• Even individual clinical
practices can be very
complex
• Well beyond the ability of
a small group of clinical
providers to manage.
• Even beyond some
very large groups and
hospitals!
Abstraction Helps…
Gartner talks about three different layers of architecture:
Record, Differentiation and Innovation
Here’s my Simplification for Healthcare: Records, Billing and/or Communications?
(Old) System(s) of Records

Fax/EDI

F2F Visits

5
Here’s my Simplification for Healthcare: Records, Billing and/or Communications?
(Old) System(s) of Records (New) System(s) of Innovation

Text/email Fax/EDI

Phone Self-care/
monitoring

Video Circle of care

clinical
messaging &
F2F Visits orders

Virtual
6
BUT! THERE ARE MANY SYSTEMS Doctors
Hospitals/Specialists

Drugs
Labs 7
There was a Plan!
For Systems of Records
in the Early 2000s

Each Province/
Territory would build
domain systems and
they would be…
…interoperable

And to some extent

they are

8
Pre-Covid 60% of Canadians reported having used one or more digital
health services in the prior year (To Environics on behalf of Infoway, 3/2020)

9
But a funny thing happened on the way to the plan
being implemented…

Total digital health industry now has a

Cdn market capitalization of $15-20 bn

Most of the big hospital systems are

US Based: Epic, Cerner et al.
Governed by US Standards

Many view data and information as a

key part of their competitive strategy

Some Publicly traded. New to IPO

market in the past year include: Cloud
Dx, Dialogue, Think Research,
MindBeacon, CloudMD, and Maple
The next few slides will review
the major subsectors

• Acute, Physician, Pharmacy, Lab, Insurance, Aging

Care are each discussed
• Keep in mind our System of Records vs System of
Innovation model
• In general, most systems that started before 2010
are Systems of Record first and are trying to do
innovation
• Some of the newer companies build both types.
• Many of the newer companies start from either
an assumed system of record or from an actual
bricks and mortar operation. They build an
innovation system on top
80% of Canadian Hospitals are on
one of four US Hospital systems….
• US Interoperability standards govern these vendors.
• In theory they must each provide a basic clinical discharge
summary (CDS)
• Blue Button 2.0 now provides more detail using an XML
based architecture that is FHIR compliant. This should
allow app-based authorization and data sharing.
• In practice these vendors view integration and apps as
revenue streams.
• The best of them has a formal App Store and charges
“only” 20% of revenues with restrictive terms of service.
Canadian Hospital Information Systems are Governed by US
Application Program Interfaces (for all practical purposes)

• It has taken the US ten

years to open
interoperability up.
• Their new rules (available
here) appear to be
workable
• They have an enforcement
mechanism and we do not
have one yet in Canada
• Without enforcement
interoperability is an
academic discussion. Or at
best a contractual
discussion among different
interested parties
 Six ways that vendors (could) make their free APIs less
easily usable and less free.
[Standards without enforcement are academic]

1. Rate limit the number of queries on an API. Explaining that they need to protect against DDOS.
2. Share data but not metadata (which significantly diminishes the relevance of data). One example
could be Trunk feed vs FHIR API
3. Deploying Passive APIs. This requires the recipient system to poll for information. (Passive
Aggressive?)
4. Create a slow certification or cumbersome certification process. (Fast-tracking owned apps, paid
apps and favourites)
5. Hide barriers to true interoperability in restrictive terms of use. This effectively places controls
that unnecessarily limit usefulness and data liquidity and impose costs to monitor & comply with.
6. Change data specifications and orders at upgrades. Remember it is a free API so there is no/little
contractual requirement to ensure that it works. This can be weaponized in the worst cases

… there are other techniques that that I would hope are never used (anyone remember “embrace,
extend, and extinguish”).
 Physician EMR adoption was subsidized in Canada. Dozens of companies signed up doctors. By
2016, Vendor consolidation has led to 4 EMR vendors holding 87% of Ontario market. This
consolidation has continued in recent years and we now have three major players
OntarioMD Funded Physician Market % of EMR
Offering as at January 31, 2016 Consumer
EMR Vendor # of Physicians Market %
eHealth
3% 1% 1% 0%
TELUS Health Solutions 4,000 35% Patient Portal
3%
OSCAR EMR
5%
2,276 20% MyOscar
QHR Technologies Inc.
35% Nightingale Informatix Corp. 2,133 19% Medeo
13%
P&P Data Systems Inc.
ABEL Soft Corporation 1,525 13% myPatientAccess
CanadaHealth Systems inc.
527 5%
YMS Inc.
19%
Alpha Global IT Inc. 386 3%
YES Medical System
20% 306 3%

120 1%

65 1%

YES Medical System 33 0%

Note: TELUS has multiple

PricewaterhouseCoopers LLP solutions 15
Source: https://www.ontariomd.ca/portal/server.pt/community/certified_emrs/745/vendor_market_share/24184
George Weston Limited is a publicly-traded Canadian company that owns large brands including Loblaws and
Shoppers Drug Mart. Shoppers Drug Mart Inc. is one of the most recognized and trusted names in Canadian
retailing. Shoppers operates almost 1,300 stores in each province and two territories. The company also licenses or
owns 47 medical clinic pharmacies operating under the name Shoppers Simply Pharmacy. The company acquired
QHR Technologies in 2016, and purchased a minority share of Maple in 2020.

16
Source: Shoppers Drug Mart, Maple, Press releases (Newswire)
WELL Health owns and operates 27 primary health care clinics, is Canada's third largest digital Electronic Medical
Records (EMR) supplier serving ~ 2,200 health care clinics, operates telehealth services in Canada and the US and
is a provider of digital health, billing and cybersecurity related technology solutions. Well Health has acquired
virtual care providers Insig, Tia Health, AdraCare, and CRH Medical to supplement its VirtualClinic+ platform, and
acquired a number of other health technology companies in 2020. Well Health also received a $300M+
investment from Li Ka Shing in early 2021.

17
Source: Well Health, Press releases (Newswire)
TELUS Health is a leader in digital health technology solutions such as home health monitoring, electronic medical
and health records, virtual care, benefits, and pharmacy management, as well as personal emergency response
services. TELUS Health aims to create better outcomes for Canadians while working with physicians, pharmacists,
health authorities, allied health care professionals, insurers, employers and citizens. Telus has acquired a number of
virtual care, health-tech and EMR systems, notably Babylon, EQ Care and Akira. They also own and operate
several physical clinics (Medisys, Horizon)

18
Source: Telus, Press Releases, Interviews
Distribution in Operating Models (Draft)

Limited pure
unbundled Bricks & Clicks
Virtual Walk In technology
virtual care
solutions

Designated Clinician EMR Launch

19
Source: Company websites, Press releases, Interviews
The Aged Care System is dominated by two Canadian National Champions.
PCC is #1 in the world for Retirement/LTC ($6 bn?); and Alaya is top 5 for
HomeCare Services ($1bn?)

20
 Insurance Providers
Four of Canada’s ten largest insurance
*shares in annual premiums
companies are partnered with Dialogue.
Together, those four companies represent

over half the annual premiums in

Canada.

Additionally, employers are partnering with

virtual care solutions to provide additional
benefits

Manulife Canada Life Sun Life Desjardins Industrial Alliance RBC Insurance
SSQ La Capitale BMO Life Co-operators Others

Dialogue Akira EQ Care Other

**Colours of slices correspond with virtual care technology (in legend above) used by insurance provider Source: Policyadvisor, Public Reports, Press releases
Labs and Pharmacy Virtual Care Partnerships
Lab Services Pharmacies

Need to Add ELNA/CDL Labs for Qc

(Now owned by TELUS) 22
Source: Company websites, Press releases
 ePrescribing has been introduced with notable success in a number of developed healthcare
systems, through a mix of legislated and incentivized programs…

e-Prescribing Adoption across Jurisdictions

Percentage Of Total Scripts (%)
Monetized Non-Monetized
100 97
100 90 90
90 80
84
80 67
70
60
50 44
40
30
20
10 3
0

* Indicates ePrescribing is mandatory

Data is 4-5 years

PricewaterhouseCoopers LLP old; Should probably replace this slide. Point is that it is time for e-Prescribing 23
and more… 24
 Wearables:
-> Tracking is cool and fun; Most
people really enjoy it and get
Two Health something out of it for 18-24
months
Related Sectors -> Some clinicians are now
that are Worth encouraging some patients to
track some data. Best example is
Watching cardiology and the apple watch
for people 55-70
-> No clinician (that I know) has
any interest in all data or being
alerted by wearables using AI. I
hear that there are some but...
-> When wearables work at this
level they are medical devices.
Personally, I love what Myant
and others are doing with
clothing.
Tech Giants and Others Who
Enter Digital Health to “Solve
Healthcare”:
• Intel (twice)
• Walmart (still in; primary care)
• Microsoft
• Google (twice)
• IBM – AI for Healthcare
• Apple (still in; wearables +?)
• Amazon, Berkshire Hathaway and
JPMorgan Chase
• Samsung (still in; wearables +?)
• GE, Siemens, and McKesson all
sold their Digital Health Divisions
because they couldn’t Compete
with Epic and Cerner but stayed in
other parts of healthcare
“New Entrants” need to have
staying power
 Covid has been a huge
accelerant globally
Let’s review briefly the incredibly rapid adoption of virtual care

For more on this topic, see my recent report published by Health Canada
 Ten years of modernization in One Year: How do we respond?

Prior expectations Reality

100% 100%

80% 80%

60% 60%
Slow climb up the adoption
curve to a stable 1/3-1/2
virtual mix
40% 40%
COVID-19 forced mass-
adoption. Slow return to
20% 20% lower levels and new normal

2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025
A POSSIBLE VISION FOR THE FUTURE…
Kaiser Permanente update on “omni channel” shifts – April 12 2020 (1 month after pandemic lockdowns)
End of 2019 April 2020

95% (Primary care)

65% (Specialty care)

>75% growth in
video visits