A view on canada healthcare sector and go to market strategy formulation

CANADA GOVERNMENT HEALTHCARE MARKET

(C) COPYRIGHT, 2015 SUMAN KUMAR MISHRA 1

PLEASE NOTE

The information in this slider is based on knowledge collected from Public Sources and insights from my experience in Healthcare

Sector. Most of the data synchs with conditions in 2015 – there might have been some recent changes to the ecosystem which

this report might not have captured.


AGENDA

About Canada Healthcare

Comparison with US and UK

Canada Healthcare Market – Budget Trends

Canada – Healthcare IT Market

Appendix


ABOUT CANADA HEATLHCARE MARKET


Introduction to Canada HC Market Canada is a high-income country with a population of 33 million people.

Life expectancy in Canada continues to rise and is high compared with most countries

Infant and maternal mortality rates tend to be worse than in countries such as Australia, France and Sweden

About 70% of total health expenditure comes from the general tax revenues of the federal, provincial and territorial

governments.

Most public revenues for health are used to provide universal medicare (medically necessary hospital and physician

services that are free at the point of service for residents) and to subsidize the costs of outpatient prescription drugs

and long-term care.

13 public single-payer insurance schemes (one for each province) that are distinct but similar.

The governance, organization and delivery of health services is highly decentralized, with the provinces and

territories responsible for administering medicare and planning health services.


Fiscal Federalism The Federal Government has a largely fiscal role, due to its spending power

Federal government was responsible for maintaining ‘Peace, Order and Good Governance’ (POGG). Federal governmentis responsible for… Food, pharmaceutical, consumer product, and health technology regulations and standards (Health Canada) The maintenance of a national health information database (CIHI) Public health and infectious disease surveillance (PHAC) Maintains a national ‘minimum standard’ of medically necessary services that must be insured under provincial health

insurance plans

Health accords are negotiated every 10 years to determine its financial contribution to the provinces. Historically, itincluded cash transfers and/or giving provinces ‘tax room’

The 2014 Govt. decided not extend the Health Accord and it expired in 2014

Funds from the Feds are contingent on provinces adhering to the Canada Health Act


Governance of Healthcare

Federal Government Canada Health Act Health protection Research (Canadian Institutes of Health

Research) Cash transfers and/or giving provinces ‘tax

room

Regional Health Authorities Funding allocation

Needs assessment

Professional Regulatory Bodies Licensure

Discipline

Provincial/Territorial Governments Policy-setting (e.g., def. of insured

services) Funding Health professional regulation regulation of hospitals

Hospitals and Agencies* Program delivery

Quality assurance Physician privileges

*Note these would be subsumed under regional health authorities in most jurisdictions.

Governance, organization and delivery of health services is highly decentralized for at least three reasons: (1) provincial (andterritorial) responsibility for the funding and delivery of most health care services; (2) the status of physicians as independentcontractors; and (3) the existence of multiple organizations, from RHAs to privately governed hospitals that operate at arm’s lengthfrom provincial governments


Structural Profile Of Public Health In Canada# Province Health Authority Number of Hospitals

1 British Columbia

• Fraser Health Authority

• Interior Health Authority

• Northern Health Authority

• Vancouver Coastal Health Authority Vancouver Island Health Authority

108

2 Alberta • Alberta Health Services 91

3 Manitoba

• Interlake-Eastern Regional Health Authority

• Northern Regional Health Authority

• Southern Health/Santé Sud

• Prairie Mountain Health

• Winnipeg Regional Health Authority

13

4 New Brunswick (N.B.)• Horizon Health Network

• Vitalité Health Network23

5Newfoundland and

Labrador

• Eastern Regional Health Authority

• Central Regional Health Authority

• Western Regional Health Authority

• Labrador-Grenfell Regional Health Authority

51

6 Northwest Territories

• Beaufort-Delta HSS Authority

• Dehcho HSS Authority

• Fort Smith HSS Authority

• Hay River HSS Authority

• Sahtu HSS Authority

• Stanton Territorial Health Authority

• Tlicho Community Services Agency

• Yellowknife HSS Authority

5

7 Nunavat • No regional HA but there are 3 admin. regions: Kitikmeot Region, Kivalliq Region, and Baffin Region 9


Structural Profile Of Public Health In Canada

# Province Health Authority Number of Hospitals

8 Nova Scotia • Nova Scotia Health Authority 43

9 Ontario • 36 public health units 250

10 Prince Edward Island • Health P.E.I 8

11 Quebec• Horizon Health Network

• Vitalité Health Network331

12 Saskatchewan

• Cypress Regional Health Authority;

• Five Hills Regional Health Authority;

• Heartland Regional Health Authority;

• Keewatin Yatthé Regional Health Authority;

• Kelsey Trail Regional Health Authority;

• Mamawetan Churchill River Regional Health Authority;

• Prairie North Regional Health Authority;

• Prince Albert Parkland Regional Health Authority;

• Regina Qu'Appelle Regional Health Authority;

• Saskatoon Regional Health Authority;

• Sun Country Regional Health Authority;

• Sunrise Regional Health Authority

95

13 YukonNo regional health boards. The Yukon Department of Health and Social Services handles the operation of 1 hosp

and 14 Comm Health Centres in the Yukon7


Provinces and Territorial health ministries

Newfoundland and Labrador - Department of Health and Community Services

Prince Edward Island - Department of Health and Wellness

Nova Scotia - Department of Health and Wellness

New Brunswick - Department of Health

Quebec - Ministry of Health and Social Services

Ontario - Ministry of Health and Long-Term Care

Manitoba - Manitoba Health

Saskatchewan - Saskatchewan Health

Alberta - Alberta Health and Wellness

British Columbia - Ministry of Health Services

Yukon - Yukon Health and Social Services

Northwest Territories - Department of Health and Social Services

Nunavut - Department of Health and Social Services


http://www.health.gov.nl.ca/health/

http://www.gov.pe.ca/health/

http://www.gov.ns.ca/health/

http://www.gnb.ca/health

http://www.msss.gouv.qc.ca/en/index.php

http://www.health.gov.on.ca/en/

http://www.gov.mb.ca/health/

http://www.health.gov.sk.ca/

http://www.health.alberta.ca/

http://www.gov.bc.ca/health/

http://www.hss.gov.yk.ca/

http://www.hlthss.gov.nt.ca/english/default.htm

http://www.hss.gov.nu.ca/en/Home.aspx

CANADA – COMPARISON WITH US AND UK


Ranking Of HC System On PerformanceParameters Canada U.S.A UK

Overall Ranking (2013) 10 11 1

Quality Care 9 5 1

Access 9 9 1

Efficiency 8 11 1

Healthy Lives 8 11 10

World Health Organization and OECD conducted this for 11 commonwealth countries includes U.S.A, UK, Canada

Canada lags in Access and Quality Care but has better healthy lives than UK and U.S.A


Healthcare Spending :How Canada Compares

Parameters Canada U.S.A UK

Funding: Public Sector

contribution to total71% 48% 84%

$ per Capita/ year4602 8745 3289

% of GDP10.9% 16.9% 9.3%

Commonwealth Fund has ranked U.S.A, UK

and Canada among other common wealth

countries and came up with this ranking

Source: The Commonwealth Fund

Canada ranks in between U.S.A and UK. U.S.A spends more on HC both in terms of per capita and % of GDP – while the public sector

contribution is least . UK is on other side of spectrum


http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror

Unlike U.S.A - Age Not Affecting The Spend

NOT MUCH. The age group (65+) has increased from 12.7% to 14.9% but the spending overall by this group has only marginally increased from 44.5% to 45.2%

Source: National Health Expenditure Database, Canadian Institute for Health Information


http://www.cihi.ca/CIHI-ext-portal/pdf/internet/nhex_2014_report_en

CANADA HEALTHCARE MARKET – BUDGET TRENDS


Canada Health Care Overview Numbers that matter

$171 Billion: Total HC spending

$4836: Per Capita Per Year

11%: HC expenditure as % of GDP

12%: Employed in HC industry

1984

Where Health “$” is spent (2014)


Public and Private Funding Split across components

71% Overall % of Public Spend in HC

Under Lester Pearson's Liberal government, Canada's health care

was expanded through the Medical Care Act, to provide near

universal coverage to all Canadians



Canada Govt. HC IT & Hospital IT Spending

Data Sets

• U.S.A Hospital Spending is 32% of HC Spending (Source: CMS ) – similar to Canada

• Hospital IT Expense is 3.92% (both CAPEX and OPEX) and 3.68% (OPEX only) of total Hospital expenses in

U.S.A (HIMSS)

• Govt. funds 71% of Canadian Healthcare (CIHI)

Assumption

- Canadian Hospitals will have the similar IT need as U.S.A: % of expense of IT in Hospital spend (OPEX) would be 3.68%

Conclusion

- Govt. budget for IT in Canada Hospitals could be = HC Spend for 2014 * Govt. Funding Share * Hospital Share * IT Share

= $171 Billion * 71% * 30% * 3.68% = $1.43 Billion

“40% of Total provincial / territorial government program

expenditure were allocated to healthcare in 2013”

(Source: NHEXT) 12

Canada Govt. HC IT Budget would be around $2.24 Billion 3


http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf

http://apps.himss.org/foundation/docs/2012_AnnualReportDorenfest.pdf


OTHER USE OF GOVT. FUNDS APART FROM HOSPITALS

Physicians

Some of the Physicians directly bill to provinces, while others areemployed by hospitals. Their expenses are covered in Hospitalssection

Other Institutions

Nursing homes and residential care facilities

Drugs

Retail sales of prescribed and no prescribed drugs

Public Health

Food and Drug Safety, Health inspections, health promotion activities, community mental health programs, public health nursing, measures to prevent the spread of communicable disease, occupational health to promote and enhance health and safety at workplace

Other Health Spending

Health research, Medical Transportation

Capital

Construction, machinery, equipment and some software of hospitals and clinics, first aid stations

Administration

Cost to operate health departments

Other Professional

Dental and Vision care professionals

46.7

27.1

12.19.8 8.6 8.0

5.22.2 1.5

Hospitals Physicians Other Institutions Drugs Public Health Other HealthSpending

Capital Administration Other Professionals

GOVT. SPENDING (B ILL ION USD)


HC SPENDING OVER THE YEARS AND PROJECTIONSHealthCare Spending ( US $ Bln)

HC Spending year on year from 2006-2015 ( source: Epsicom, Economist

Intelligence Unit)

From 1998 to 2010: HC spending outstripped GDP growth in each year

Since 2012: HC spending declined compared to growth of GDP

PBO Forecast ( 2087) of HC as % of GDP spend would rise up to 13%

from current 11 %

(Source: Office of Parliamentary Budget Officer)


https://businessincanada.com/2014/09/30/pbo-fiscal-report-2014-health-care-costs-debt-to-gdp-federal-surplus/

HOSPITAL SHARE OF PUBLIC SECTOR HEALTH EXPENDITURE


HOSPITAL SPENDING: PROVINCES / YEAR ON YEAR TREND

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Alta. B.C. Man. N.B. Nfld. N.S. N.W.T. Nun. Ont. P.E.I. Que. Sask. Y.T.

Hospital Spending (% Annual Change)

2009 2010 2011 2012 2013 2014




HC IT FORECAST(PUBLIC & PRIVATE)Projected Annual Spending in Healthcare Technology($m)

Spending ($m) 2012 2013 2014 2015 2016 2017 2018 2019 CAGR 2013-19

Canada 3,497 3,702 3,950 4,237 4,548 4,835 5,130 5,373 6%

0

200

400

600

800

1000

1200

1400

1600

1800

2012 2013 2014 2015 2016 2017 2018 2019

RCM

Patient admin

PACS

e-Pres

EHR

BI & Analytics

Projected Annual Spending in Clinical Apps($m)

Source :Ovum

RCM :Revenue cycle management(includes billing)

PACS :Picture, Archiving and communication

e-Pres :E- prescribing

EHR :Electronic Health Records


HC IT FORECAST(PUBLIC & PRIVATE)

Source :Ovum

Clinical Apps 2012 2013 2014 2015 2016 2017 2018 2019 Grand Total

BI & Analytics 75 92 113 127 164 202 244 268 1285

EHR 224 250 281 321 354 392 431 470 2722

e-Pres 99 108 118 131 144 159 169 182 1111

PACS 186 198 208 223 236 251 262 273 1837

Patient admin 87 100 118 140 161 187 217 238 1248

RCM 112 127 143 162 183 205 225 245 1402

Grand Total 783 875 980 1104 1242 1396 1549 1676 9604

Projected Annual Spending in Clinical Apps($m)

%age contribution 2012 2013 2014 2015 2016 2017 2018 2019

Average %

contribution

BI & Analytics 9.57 10.51 11.53 11.50 13.20 14.46 15.75 15.99 13.37

EHR 28.60 28.57 28.67 29.07 28.50 28.08 27.82 28.04 28.34

e-Pres 12.64 12.34 12.04 11.86 11.59 11.38 10.91 10.85 11.56

PACS 23.75 22.62 21.22 20.19 19.00 17.97 16.91 16.28 19.12

Patient admin 11.11 11.42 12.04 12.68 12.96 13.39 14.00 14.20 12.99

RCM 14.30 14.51 14.59 14.67 14.73 14.68 14.52 14.61 14.59

Percentage Comparison of Clinical Apps


CANADA – HEALTHCARE IT MARKET


HOW CANADA STANDS: HC IT ADOPTION

A survey conducted by Accenture (500 doctors in Canada) found the following for U.S.A. Canada and UK

HealthCare IT functionalitiesU.S.A Canada UK

P S P S P S

Use Electronic Tools to reduce administrative burden( ex:

Scheduling, Billing)60% 62% 53% 47% 47% 25%

Patient notes entered electronically during or after consultations 58% 59% 42% 29% 91% 16%

Receive electronic reminders / alerts while am seeing patients 35% 33% 20% 13% 84% 7%

Use Computerized decision support system to make diagnostic

and treatment decisions while seeing the patient19% 22% 18% 11% 28% 13%

HC IT Adoption- average 43% 44% 33% 25% 63% 15%

Canada has more IT adoption in primary care than in secondary care ( like UK) Canada doesn’t have vast discrepancy in IT Adoption between primary and secondary care

P: Primary Care S: Secondary Care


A NOTE ON GOVT. OWNED HC IT SYSTEMS

Financial Systems: Example Claims processing are owned by Govt.

Govt. however outsources these services to Canadian IT companies

Companies who manage Govt owned HC IT Systems

TELUS, for the province of Ontario

IBM, for smaller provinces

Deloitte, for BC

Oracle, for BC

Medavie, New Burnswick

Prime importance to data not moving out of country, so companies with offices and DC in Canada are preferred over those working out of USA over those from India or other destinations

Preference towards those companies who have Canadian story, example customers served, regions present, impact made within Canada


OVUM: AWARDS IN GOVT. HC (JUNE,2014 - PRESENT)

Client

Name

Primary

Vendor

Deal Date Contract Length

(months)

TCV

($m)

Bid Type IT Service Type Description of components Part of large contract

Government

of Ontario

CrimsonLogic 13 Jan 2015 36 6.0 Competitive Application

development and

support; IT Consulting

Selected Vendor of Record (Task based I&IT

Services and I&IT Solution Consulting Services)

Yes

Shared

Services

Canada

IBM Corp 08 Oct 2014 36 24.0 Competitive Data center

outsourcing;

Infrastructure

management;

Maintenance/support

To provide and manage enterprise data center

space

No

Government

of Alberta

Fujitsu Group 08 Sep

2014

120 30.0 Competitive Business

continuity/disaster

recovery; Helpdesk

management;

Maintenance/support

Manage and Operate Service Desk Services

for all ministries of Provincial government

Yes

All of these awards were won on Fixed pricing

Non HC – there are more opportunities here

Recruitment - MSA (Saskatchewan)

Review Process, Portal development, Analytics, Project Management

(Alberta Public Sector)


MERX: RFP’S AWARDED IN HC (MAY,2014 - PRESENT)

Client Name Primary

Vendor

Deal

announceme

nt Date

Contract

Length

(months)

TCV

($m)

IT Service Type

Rouge Valley Health

System

Gribaltar Feb, 2015 N/A N/A Provision Of Citrix Software Refresh And

Implementation

Ontario Shores Centre

for Mental Health

Sciences

NA Feb,2015 N/A N/A Endpoint Protection/Security Antivirus Software

St. Joseph Health

Center

Deloitte Jan, 2015 N/A N/A External Financial Audit Services

Northwest Supply ChainMNP LLC Dec, 2014 N/A N/A Virtual HC Current State Analysis and Roadmap

Lakeridge Health

Corporation

Deloitte Dec, 2014 N/A N/A Provision of Facilitation and Advisory Services to the

CEO and Board of Trustees

Northwest Supply Chain 3M Canada Sep,2014 N/A N/A Coding and Abstracting Software Solution and Annual

Maintenance

Manitoba Infrastructure

and Transportation

SAP Sep, 2014 N/A N/A SAP Business Object Renewal


PLAYERS – HC IT CONTRACTS IN CANADA

CGI

ECM, Diagnostic Imaging shared services, Chronic Disease Management, Claims System

Management, HIX, Health Informatics, Application Development , AVM

Ministries of Health in some provinces and Health Canada,

ERP and IT operations to provincial hospitals and regional systems

Accenture Cloud, Analytics, ehealth, Connected health

Deloitte e-Health

PWC Integrated Service Delivery, Shared Back office Services, Digital Backbone, Infrastructure and

Service Delivery

IBM Analytics, Disease Surveillance and monitoring system

Care Management Platform for Hospital

KPMG Service Integration, Business Performance Improvement, ehealth, Public and Private Sector

Partnership, Shared Services, Program Management,

E&Y Remote Patient Monitoring , HealthCare Advisory Services, Transformation, Analytics, Program

Management, Workforce , System design, AVM, ehealth


HC’S NEXT WAVE OF REFORM Healthcare Clouds - Healthcare clouds will help providers access and store information in more efficient, flexible and secure ways while

helping save money—driving the push toward physician electronic medical records. For patients and consumers, healthcare clouds will

be a platform for personal health records, offering new access, control, visibility and convenience.

Health Analytics - Together, advanced analytics and new data visualization techniques will help unlock the power of data to drive more

informed decision making and, ultimately, higher quality, lower cost care—from public health monitoring and prevention to the

treatment of chronic illnesses.

New Payment Models - The convergence of health reform, new data availability and access, and the push to lower healthcare costs will

drive the shift toward outcomes-based funding in Canada and around the world. New funding models will be linked to meeting specific

targets, adjustments for patient case mix and other measures related to achieving quality outcomes.

Tablet Computing - Easy-to-use and portable, tablet computers will play a critical role in unlocking clinical adoption of technology, like

physician electronic medical records.

m-Health - Mobile technology and mobile apps have become a part of everyday life for many people. Bant, developed in Canada, is

one of the new class of apps simplifying diabetes management. Users can record their glucose readings, link to popular health accounts

and share information.


HC’S NEXT WAVE OF REFORM

Social Networking - the next wave of opportunity will be around patients managing and “curating” healthcare information via social

networking sites. Consumers will be able to access trusted sources and reliable information that reflects patient needs.

Point-Of-Care Diagnostics - Recent advances toward “lab on a chip” allow for thousands of tests to be run on just a few drops of

blood. PoCTs will continue to simultaneously drive consumer empowerment and improve care with the ability to provide reliable and

“instantaneous” results without the need for a large centralized lab.

Hospital at Home - Technology advances will continue to enable more hospital at home options for diagnostics, the care of chronic

conditions and postsurgical recovery

Regionalization - The emergence of these larger regional systems along a centralized governance model and stable funding will

continue to enable better integration. Key benefits will include the consolidation of systems, standardization of care protocols and the

development of shared service models or managed services contracts.

Exporting Health - Healthcare organizations outside of Canada are entering new markets - foreign markets in particular—in an

attempt to generate new revenue. Opportunities include partnerships, licensing deals, expansion into new markets and

commercialization of IP.


STATE PROCUREMENT LINKS: CURRENT OPPORTUNITIES

# Client name Opportunity Description LINK

1 The Ministry of Health

and Long-Term Care

To gather information from the marketplace for a Commercial Off-The-Shelf

(COTS) solution in order to assist in the determination of future system

options and requirements. The COTS solution, once determined and procured

through an open and competitive procurement process, would replace the

Ministry’s existing Data and Voice Recording and Retrieval (DVRR) solution.

ONTARIO

PROCUIRE

MENT

LINK

2 British Columbia Wasn’t able to find any hospital or health related services we can pitch for None

3. Nunavut Wasn’t able to find any hospital or health related services we can pitch for None

4 Alberta Wasn’t able to find any hospital or health related services we can pitch for None

Biddinggo.com – we have to reactivate this account

Procurement links for BC, Ontario

SSO and HA Procurement links

Partner with Canada Health Info way

Register for Federal procurement link

Other Opportunity Sources


https://ontariotenders.bravosolution.com/esop/toolkit/opportunity/opportunityList.do?reset=true&resetstored=true&oppList=CURRENT&userAct=changeLangIndex&language=en_CA&customLoginPage=/esop/nac-host/public/web/login.html&_ncp=1429280160013.20809-1

CHALLENGES FOR GO TO MARKET


SOME OF THE PROBING QUESTIONS

Do you have a Canadian Story ?

What are your accreditations ? What is your

positioning in the Value chain ?

What are your Legal Arrangements ? Are you targeting the right customer ?


IT SOLUTIONS & PRODUCTS IN CANADA HC MARKET

Mobility and Desktop virtualization

Players: IBM, Accenture

Cloud Enables federal agencies, healthcare regions and large health

institutions to address pressing issues such as increasing costs, poor or

inconsistent quality of care, and inaccessibility to timely care

Players: IBM, Accenture, Mobility Plus app

Health Analytics

An online platform that enables pharmacists to better

communicate and collect information from patients, as well as offer a

series of value-added services to help them stay healthy.

Players: TELUS Ubik

Pharmacy Management Systems

Better asset availability, automation, OPEX,reduction for hospitals

Players: IBM, PwC, CGI

Application Maintenance and Support

Latest Solutions in

Healthcare IT space

Access patient charts and electronically co-sign

orders remotely. Send and receive secure HIPAA-compliant

text messages on mobile devices. Archive conversations and

update patient records directly

Players: Pocket Echo

Practitioner Engagement

Allows users to enter and review medication, lab, diagnostic,

diet and non-medication orders electronically. Point of Care Diagnosis.

Hospital at home

Players: IBM, Accenture, E&Y, KPMG

Patient and Consumer Health Platforms / Mobile Apps (mHealth)


SOME VERY BROAD RECOMMENDATIONS


Ontario

Quebec

Alberta

BC

Manitoba

French widely spoken- language

barrier

“The best strategy to enter Canada market is province by province. Each of the provinces or territories have different procurement capacities,

sales cycles, preferred vendors, opportunity areas and regulations. Market entry strategy for Canada should therefore be province by province

– and considering competitors in those areas“

Top 5 Provinces

Given the healthcare structure in Canada, recommendation is to have entities focused on Public Sector /

Government and in Provider business to make joint pitches

MARKET ENTRY RECOMMENDATION: PROVINCE WISE STRATEGY


POSSIBLE PARTNERS

Provided on RequestProvided on Request

Provided on Request Provided on Request


RECOMMENDED SSO’S TO PARTNER WITH

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COUNTER STRATEGY TO PLAYERS EYEING THIS MARKET

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BUDGETING FOR THE GO TO MARKET EXERCISE

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KEY SUCCESS FACTORS FOR THE GO TO MARKET EXERCISE

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SUMAN KUMAR MISHRA

[email protected]


mailto:[email protected]

https://in.linkedin.com/in/sumankumarmishra

https://in.linkedin.com/in/sumankumarmishra