The health care system suffers from multiple chronic conditions: spiralling costs, inefficient care delivery, outdated IT systems. But major efforts are finally underway to alleviate these conditions, creating a big opening for entrepreneurs.
For one, governments have got religion that the rising cost trajectory must be stopped. Health care gobbles up almost half of provincial budgets—and the ratio is rising. The provinces are now slamming on the brakes. Public spending on health rose 3.7% in 2012, down sharply from eight to 10% annual increases between 2007 and 2010—a shift that has forced health care providers to become far more cost-effective.
Meanwhile, patients who are keen to manage their own health care are demanding the “anytime, anywhere” access to info they already enjoy in other spheres. And, thanks to dramatic advances in mobile devices and computer-aided manufacturing, technology can now enable doctors to deliver better care for less.
The upshot is that the sector is hotter than it’s ever been. Michael Bidu, CEO of Sanotron, a Vancouver tech accelerator focused on digital health care, identifies the four keys to success in this arena today: combining technologies, such as merging wireless sensors with video games to help track and modify autistic kids’ behaviour; ensuring that clinical research supports product claims; making good design a central aspect of new products; and tapping the insights and data that sufferers share about their conditions on social networks like PatientsLikeMe.
SMEs have a vital role to play in transforming health care, says Bidu. “They can offer bottom-up solutions that can be implemented quickly, leanly and very efficiently.” The hottest opportunities include:
A dozen years ago, it cost $1 billion to sequence a person’s genetic code. Now, it takes as little as $2,000, says Peter van der Velden, who runs Toronto’s Lumira Capital, a life-sciences VC. The field is ripe for genetic-profiling services that help identify which drugs will work best on which patients. By analyzing a patient’s genetic sequences and key markers in their bloodstream, “you can say that this person is 95% likely to respond to this drug, whereas this other person is only 30% likely,”says van der Velden. The result? Fewer people take a drug that’s unlikely to help them or whose side effects will outweigh the benefits and the health care system saves a lot of money.
Increases in computing power are reinventing surgery by, for instance, equipping surgeons with robotic guiding tools that enable them to operate faster and more accurately. Manufacturers using medical imaging systems can now make medical devices extremely precise. Some are even starting to use 3D printers to make replacement body parts for applications like facial reconstruction.
Tools for doctors
Dion Madsen, who runs the health care fund at BDC Venture Capital (which is doubling its investment in the sector, to $270 million), points to a firm that helps doctors decide whether an MRI or a CT scan would be most effective for a given patient and another that helps them better interpret such images. He adds that hospitals are keen on IT offerings that enable them to share, say, the X-rays of a patient who’s receiving care at more than one hospital.
A PwC survey this summer found that nine in 10 Canadian doctors are open to delivering care remotely. And mobile technology now makes that feasible. “Smartphones finally have enough speed and reliability to trust them for health care,” says Ryan Wilson, CEO of Medeo Corp. His Vancouver startup enables patients to supplement visits to their doctors’ offices with virtual visits via secure video link. Medeo operates only in B.C., the sole province to date to drop the rule requiring that a doctor and a patient be in a $100,000-plus special telehealth room during a virtual visit. But Wilson is confident other provinces will follow suit (some U.S. states already have) once they see the big cost savings from a service using patients’ own devices.