Healthcare Sector in Canada

An Expert's View about Residential Care Activities for the Elderly and Disabled in Canada

Posted on: 4 Oct 2010

Canada has a predominantly publicly financed, privately delivered healthcare system, based on ten provincial and three territorial health insurance plans.

Healthcare ? Canada Sector Report Healthcare Canada Produced by: Valerie Strand, Trade Officer British Consulate-General, Toronto Last revised: October 2009 Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation and Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published October 2009 by UK Trade & Investment. Crown Copyright © www.uktradeinvest.gov.uk Healthcare - Canada Table of Contents OVERVIEW 3 OPPORTUNITIES 4 CHARACTERISTICS OF MARKET 5 KEY METHODS OF DOING BUSINESS 8 MORE DETAILED SECTOR REPORTS 9 PUBLICATIONS 9 EVENTS 9 CONTACT LISTS 10 ASSOCIATIONS AND GOVERNMENT DEPARTMENTS, IN CANADA: 10 www.uktradeinvest.gov.uk Page 2 of 10 Healthcare - Canada OVERVIEW Canada has a predominantly publicly financed, privately delivered healthcare 1 system, based on ten provincial and three territorial health insurance plans . The system includes universal, comprehensive coverage for medically necessary 2 hospital, in-patient and out-patient physician services . Under the Canada Health 3 Act , to receive federal support from Health Canada, provincial/territorial plans must meet five criteria; comprehensiveness, universality, portability, accessibility and public administration. The healthcare industry is composed of companies involved in the design, establishment, operation, maintenance and improvement of healthcare systems and institutions; telehealth/health telematics; contract research organisations; health administration and consultants; facilities management; continuing medical, nursing and allied health education and training; architectural and design services; clinical services; health insurance. Over 1.6 million people are employed in the healthcare 4 and social services sector, the third largest employer in Canada with nurses 5 constituting the largest group of health care providers . 1 Source: Francine Anne Roy, Director, Health Services Information at CIHI ?Each province has it?s own unique environment that will influence decisions around health spending. Variations in models of care, salary and benefit levels, health needs and the geographic distribution of a province?s population are all factors that can effect health system expenditures? 2 Source: Health Canada www.hc-sc.gc.ca 3 Source: Canada Health Act http://laws.justice.gc.ca/en/C-6 4 Source: Health Canada www.hc-sc.gc.ca 5 Source: Nurses Union www.nursesunion.ca www.uktradeinvest.gov.uk Page 3 of 10 Healthcare - Canada Public sector funding represents about 79% of healthcare expenditure with the remaining 21% percent financed privately through supplementary insurance and 6 employer-sponsored benefits, or directly through out-of-pocket spending . In 2008 healthcare spending reached C$172 billion (a 60% increase in 10 years). The healthcare sector contributed significant economic growth amounting to C$79.3 7 billion or 10% percent of Canada?s Gross Domestic Product (GDP) in 2008 . Currently Canada?s health care system lists almost 400,000 general practitioners, more than 700 hospitals, and 1,600 long-term care facilities, servicing the population of 33 million. OPPORTUNITIES As the provinces and territories aim to reduce the cost of healthcare, there is demand for equipment and services that reduce the length of hospital stays and recovery times. This includes technology and equipment for non-invasive treatments using sensors, lasers, ultra-sound and nuclear medicine, plus faster and more accurate diagnostic methods and tests. There is a need for compatibility with existing equipment and long term compatibility, especially with equipment involving PC-linked monitors and telehealth. The use of ICT to deliver healthcare services and information over distances is a growing segment. Demand is increasing for supplies and equipment for home care, including management of chronic conditions, aids for daily living, and natural, alternative and preventative healthcare products, which help the aging to remain active and independent. The Canadian Institute for Health Information (CIHI) reports that the home care market in Canada is currently worth about C$6.6-billion, a year. This amount is less than 4% of all the money spent on healthcare. Drastic changes will have to be adopted and additional support given to this segment of the market to meet the demands of Canada?s aging population. Currently 13% of the population is aged 65 or older with a forecasted growth to 25% in the next 20 years. Overall, Canada remains dependant on imports of medicines, medical devices, imaging equipment and related technology, maintaining a trade deficit of over 8 CAD$10 billion (£0.48 billion) . The UK?s reputation as a source of high quality, innovative products, makes it an ideal supplier to the market. This can be leveraged as an entry point to the US and Mexico, for example, manufacturing in Canada to supply the NAFTA market. Regulations: Health Canada is the federal government department that oversees the regulation of healthcare components such as pharmaceuticals and medical devices. 6 Exploring the 70/30 Split: How Canada's Health Care System is Financed http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=AR_1282_E&cw_topic=1282 7 Source: Ivey Business Journal www.iveybusinessjournal.com This figure includes expenditure on hospitals and other institutions, physicians and other professionals, drugs, capital, public health, administration and other healthcare spending. 8 Source: Innovating Health June/July 2006 www.uktradeinvest.gov.uk Page 4 of 10 Healthcare - Canada Provincial/territorial governments are responsible for delivering healthcare, including licensing of doctors, and building and operating hospitals. 9 The Therapeutic Products Directorate (TPD) , a division of Health Canada, is made up of several Bureau's and is responsible for regulating pharmaceuticals, blood, 10 biologics, disinfectants and medical devices. The Medical Devices Bureau is responsible for processing license applications, reviewing safety and effectiveness data, and establishing standards and policies. Medical devices are classified based 11 on risk Class I-V; Class I being the least risky, Class V being most risky . UKTI publishes international business opportunities gathered by our network of British Embassies, High Commissions and Consulates worldwide. These opportunities appear in the Opportunities portlet on the relevant sector and country pages on the UKTI website. By setting up a profile you can be alerted by email when relevant new opportunities are published. New or updated alert profiles can be set in My Account on the website. CHARACTERISTICS OF MARKET Medical devices manufactured in Canada include those used for diagnosis and treatment of ailments including medical, surgical and dental equipment, furniture and consumables, orthopaedic appliances, prosthetics and electro-medical 12 equipment, diagnostic kits, reagents and equipment. Following is a snapshot (most recent figures) of the Devices segment: ? 35,000 employees, representing almost 25% of the total national sector ? 1,500 corporate facilities across Canada, but primarily based in Ontario, Quebec and BC with over 80% of the device industry based in Ontario and Quebec ? Device sector is comprised of small, medium and large facilities with the majority of companies in the small to mid-sized area, however, large companies represent 43% of employment. ? Over 600 related importers/distributors. The industry generates approximately CAD$6 billion (£3 billion) in national sales. Of this, Ontario and Quebec are the largest purchasers; CAD$3 billion (£1.5 billion) 13 and CAD$2 billion (£1 billion) respectively . 14 In 2008 , Canada exported CAD$554 million (£277 million) worth of medical devices (Harmonised System Codes 9022 and 9018) to the USA and CAD$18 million (£9 million) to the UK. In the same year, Canada imported CAD$1.5 billion 15 (£750 million) of medical devices from the US and CAD$46 million (£23 million) from the UK. Market Trends Expenditure shifts: Since the mid-1970?s, the share of total healthcare expenditure devoted to hospitals, has declined, however, hospitals remain the 9 The Therapeutic Products Directorate (TPD) www.hc-sc.gc.ca/hpfb-dgpsa/tpd-dpt/aboutus_e.html, contains downloads including the Medical Devices Regulations, Guidance Documents, Policy Documents, Information Letters, Alerts, License Applications and other regulatory information for manufacturers. 10 Medical device regulation http://laws.justice.gc.ca/en/F-27 11 Medical device regulation http://laws.justice.gc.ca/en/F-27/SOR-98-282/index.html 12 Source: Medec http://www.medec.org/about_our_industry 13 Source: MEDEC www.medec.org 14 Source: Industry Canada http://strategis.ic.gc.ca, includes top 10 medical device imports and exports. 15 A slight increase each year for the past 5 years. www.uktradeinvest.gov.uk Page 5 of 10 Healthcare - Canada largest single user of healthcare funds. In 2008, hospitals made up the largest component of health care spending, drugs accounted for the second-largest share with an estimated annual growth rate of 8.3%, an increase that exceeds other major health-spending categories and Physicians account for the third largest 16 share, a category that has remained stable since 2000 . Expenditure breakdown 2008 (figures rounded): Use of Funds Expenditure (billions) Percentage of total Hospitals C$45.5 28.0 Pharmaceuticals C$30.0 17.4 Physicians C$21.5 13.4 In its annual report (October 2009) on healthcare spending in Canada, the Canadian Institute for Health Information reports that the country?s healthcare spending continues to rise, reaching C$172 billion in 2008 representing 10.1% of GDP. This equates to C$5,170 per person annually. Delivery: Factors influencing delivery of treatment include expenditure reductions, aging population and new technology. Use of clinics, home care and treatment with medical equipment and drugs, are increasingly incorporated into the system. Long-term services and follow-up care: These services are now also provided through publicly funded rehabilitation facilities, home care, chronic care institutions and other programmes. Over 270,000 seniors live in healthcare institutions. The majority of these were newly diagnosed with conditions that often require higher levels of regular care, such as incontinence, stroke, Alzheimer disease or other dementia. Currently, 1 in 7 Canadians are 65 or older; this number will increase and it is estimated by 2031, 25% of the population will be 65+ accounting for 60% 17 of all hospital costs . E-Health: Federal and provincial/territorial governments are undertaking electronic health record initiatives related to personalised medical assistance, administration and addressing issues such as wait times, healthcare in remote locations and proactive management of health issues by individuals, with the provinces of Alberta leading the way, followed by Ontario, British Columbia and the Atlantic provinces. For example: ? Alberta Netcare Portal ? www.albertanetcare.ca 18 ? Canada Health Infoway - collates patient records, which can be retrieved by healthcare professionals across the country. 19 ? Telehealth Ontario ? free and confidential telephone service, providing health advice from registered nurses. Waiting times: Wait times continue to be a barrier to accessing medical care across all Provinces. A shortage of medically trained personnel, timely access to emergency beds, availability of diagnostic equipment and a general system overload continues to contribute to this on-going problem. Despite the Federal and Provincial governments attempts to reduce wait times there continues to be problems. 16 Source: Canadian Institute for Health Information www.cihi.ca 17 Source: Statistics Canada www.statcan.ca 18 Canada Health Infoway www.infoway-inforoute.ca 19 Telehealth Ontario www.health.gov.on.ca/english/public/program/telehealth/telehealth_mn.html www.uktradeinvest.gov.uk Page 6 of 10 Healthcare - Canada Accessing family physicians: Family doctors are estimated to be in the 98:100,000 population ratio (2007 figure), while the number has increased from 95:100,000 (2001) it is estimated that 5 million of the population are without a family doctor. This ranks Canada last amongst the G8 countries. The Canadian Medical Association (CMA) estimates it will take 26,000 more doctors to bring Canada up to the OECD average. Nurse Shortages: In 2007, despite the 217,000 registered nurses delivering care; it was estimated that a further 11,000 full time nursing staff are required to enable full service delivery. At the current rate of patient growth, it is estimated that a further 60,000 nurses will be required by 2022. To counteract some of the shortfall in medical personnel Canada has adopted a plan to ?fast track? medically trained new immigrants through the various compliances and examinations to meet the federal and/or provincial standards to enable quicker introduction into the healthcare sector. Several Provinces have organized proactive outreach programmes, including fully financed visits for medical professionals, overseas advertising campaigns, and recruitment drives to generate interest in working in Canada. 20 Private Healthcare : Private-sector (individual) expenditure was forecast to reach 21 C$51.6 billion in 2008 with prescribed drugs and dental care making up the largest components of total private health spending. Private healthcare is a growing segment and differs in each province: ? In Quebec, British Columbia, Alberta, Prince Edward Island, doctors can set fees and practice outside the public system. Does not allow private insurance to cover services provided through private healthcare, which are covered under public insurance. ? Manitoba and Ontario do not allow private insurance, but reimburse doctors who practice outside public healthcare. ? Nova Scotia permits private insurance and healthcare. ? In New Brunswick, doctors can set fees. ? In Saskatchewan, doctors can set fees if they do not practice within public healthcare. ? In Newfoundland, patients can be reimbursed if they utilise private healthcare and use private insurance to cover the difference. Wait times are the primary reason for private healthcare demand. Natural Health and Organic Products: A 2005 Health Canada baseline report reported that 7 in 10 Canadians use Natural Health Products (vitamins/minerals, herbal remedies and teas, additive-free foods and organics). By 2010 they project that retail sales will be worth CAD$2.75 billion (£1,375,000). The Canadian Health Food Association (www.chfa.ca) recognize NHP is a key component in a healthy lifestyle and as a niche within the Healthcare industry, has growth potential. The CHFA are working with the Health Products and Food Branch Inspectorate to speed up the tremendous backlog of unprocessed requests for DIN or NPS certification. 22 Industry Strengths The Canadian industry has developed strengths including in: 20 Source: Breaking the Taboo, MacLean?s, 20 June 2006 21 Source: CIHI www.cihi.ca 22 Source: Invest in Canada www.investincanada.gc.ca www.uktradeinvest.gov.uk Page 7 of 10 Healthcare - Canada ? Cardiovascular - heart valves, pacemakers and catheters ? In-vitro diagnostics - cancer, hepatitis and sexually transmitted diseases ? Radiation therapy and therapy-planning software ? Medical imaging - 3-D imaging, imaging archiving systems and ultrasound scanners and related software ? Dental - high-speed sterilises, dental materials including implants and related equipment and sundries ? Orthopaedics/prosthetics/orthotics - artificial limbs, including myoelectric hands ? Health research - Diabetes Islet Transplant Programme and Human Genome Project. In addition, Canada maintains strengths in related industries such as biotechnology, advanced materials, microelectronics, photonics, robotics, software and infomatics, and telecommunications. Science/Technology: Many medical device manufacturers collaborate on R&D with universities, hospitals, and government. About 10% of medical device firms are 23 spin-offs from these collaborations . Developments in science/technology are an ongoing process it is near impossible to determine those projects that are most important or when a project will come to fruition. KEY METHODS OF DOING BUSINESS The management and delivery of publicly insured medical services in Canada is the responsibility of each provincial and territorial government. Provinces and territories therefore individually control the planning, management, and financing of hospital care, physician and allied health care services, and some aspects of prescription care and public health. The 700 publicly financed hospitals account for 75% of medical equipment purchases. The majority of hospitals are part of regional or national not-for-profit buying groups or Group Purchasing Organisations (GPOs). Most hospital goods are either sold direct to GPOs by the manufacturer or through one of the larger importing distributors, mainly based in the provinces of Quebec and Ontario. Smaller regional distributors tend to supply niche segments and deal with smaller accounts including clinics, smaller hospitals, care homes and doctors? offices. To supply directly to private healthcare is likely to involve sales to each clinic/doctor rather than wholesale distributors. Factors enabling access to the market include: ? Canada's Mutual Recognition Agreements (MRAs) with the EU, facilitating imports ? Provincial funding initiatives to encourage global partnerships ? R&D tax treatments make it an attractive location for companies to leverage R&D investments ? Joint ventures and strategic partnerships, such as manufacture under private label agreements ? Canada is considered the lowest cost country to establish a medical device firm, 24 with a 4.1 % cost advantage over the US ? Canada is part of the North American Free Trade Agreement (NAFTA). NB: UK suppliers opting to serve Canadian customers via US distributors or sales agents 23 Source: Industry Canada www.strategis.ic.gc.ca 24 Source: Competitive Alternatives: KPMG?s Guide to International Business Costs, 2006 Edition www.uktradeinvest.gov.uk Page 8 of 10 Healthcare - Canada should be aware of possible double duties applied to shipments originating from the UK. Direct UK export to Canada is usually the best route to entry. Other background information on doing business in Canada can be found on UKTI?s website. Simply go to to the Canada page where you will find information on: Economic background and geography, Customs and regulations, selling and communications, contacts and setting up, visiting and social hints and tips. ? ? MORE DETAILED SECTOR REPORTS The Canadian Institute for Health Information www.icis.ca (CIHI) produces very comprehensive reports on a regular basis that are referenced throughout this Summary. Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including: ? Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, contacts and support during your visits overseas. ? Export Marketing Research Scheme. Advice on market research and help to contact subsidised market research administered by the British Chambers of Commerce on behalf of UKTI. Contact your local International Trade Advisor if you are interested in accessing PUBLICATIONS these services, or for general advice in developing your export strategy. The Medical Post wWwhwen.m considering doing business in Canada, it is essential to obtai egal, financiedicalpost.com The Canadian Journal of Medical and taxation advice. For further details, please contact: Laboratory Science Canadian Healthcare Technology www.csmls.org wVawlewr.icea Snthreaanldth, .Tcroamde Office UK Trade & Investment/British Consulate-GenHeoraslpital News Canada C77an7a Bday Str et, Suite 2800ian Medical Association Journal www.hospitalnews.com wTowrwon.ctom OajN.c aM5G 2G2 T: 011 44 416 593 1290 + 1 ext + 2229 Long Term Care Magazine GF:e r0i1at1r i4cs4 416 593 1229 and Aging www.oltca.com wE:w vwa.lgeerire.strand@fco.gov.ukiatricsandaging.com W: www.uktradeinvestcanada.org EVENTS Due to the provincial fragmentation of the market there are no national Healthcare trade shows in Canada. Canadian buyers and industry professionals will regularly visit international trade shows in other parts of the world, e.g. Medica. The following shows are, however, currently notable: e-Health Conference & Exhibition www.e-healthconference.com Ontario Hospital Association-Health Achieve Convention and Exhibition www.healthachieve.com Medtrade www.medtrade.com www.uktradeinvest.gov.uk Page 9 of 10 Healthcare - Canada UK Trade & Investment?s Tradeshow Access Programme (TAP) can help eligible UK businesses take part in overseas exhibitions. Attendance at TAP events offers significant benefits: ? possibilities for business opportunities both at the show and in the future ? a chance to assess new markets and develop useful contacts ? grants are available if you meet the criteria ? UKTI staff overseas will be available to assist delegates Find out if you are eligible to apply to attend this event, and more about the support UKTI can offer, on the UKTI Market Entry web page. Details of TAP events can be found in the Events portlet on the Canada page. CONTACT LISTS ASSOCIATIONS AND GOVERNMENT DEPARTMENTS, IN CANADA: Canadian Healthcare Association www.canadian-healthcare.org Canadian Council on Health Services Accreditation MEDEC www.cchsa.ca www.medec.org Standards Council of Canada Medbuy Corporation www.scc.ca www.medbuy.com Canadian Standards Association Canadian Co-ordinating Office for www.csa.ca Health Technology Assessment Health Canada www.ccohta.ca www.hc-sc.gc.ca Therapeutics Products Directorate, Health Canada Strategis Canada www.hc-sc.gc.ca/hpfb-dgpsa/tpd- www.strategis.ic.gc.ca dpt/aboutus_e.html UKTI?s International Trade Advisers can provide you with essential and impartial advice on all aspects of international trade. Every UK region also has dedicated sector specialists who can provide advice tailored to your industry. You can trace your nearest advisor by entering your postcode into the Local Office Database on the homepage of our website. For new and inexperienced exporters, our Passport to Export process will take you through the mechanics of exporting. An International Trade Adviser will provide professional advice on a range of services, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, translating marketing material, e-commerce, subsidised export training and market research. www.uktradeinvest.gov.uk Page 10 of 10
Posted: 04 October 2010