Ottawa should leverage health system to boost homegrown startups, innovation group says
Canada’s healthcare system should take a page out of the country’s defence capabilities buildup playbook, argues a CCI report on home-grown innovation and equipment procurement. (Credit: HXDBZXY/Getty Images)
Ray stands just over five feet tall and weights a little under 100 pounds, but can disinfect an operating room much faster than any human.
The mobile unit, described by co-founder and chief executive Arash Mahin as a “very complicated” version of the Roomba, a popular autonomous robotic vacuum cleaner, costs about half the price of current hospital tech that must be moved around surgical suites by a human and takes much longer to similarly blast away pathogens using the highest-energy portion of UV light.
But while hospitals on both coasts of the United States including San Gorgonio Memorial Hospital in Banning, Calif., have embraced the robotic technology, the company that builds it in Canada’s capital is having trouble making sales at home.
“We’ve tried, and we’re continuing to try in Canada, our own backyard,” said Mahin, adding that performance-driven sales of the units to hospitals in the United States bolstered positive feedback in Canada but failed to translate into uptake.
“They say, OK … let’s run a pilot. Great. You see success. You’ve seen reductions (in infections). You’ve seen reduced turnaround times. Okay, now, how do we budget for this? And it seems like that becomes a roadblock.”
The only inroad in Canada is at Woodstock Hospital in Ontario, which was able to work around the hospital’s budget process using outsourced housekeeping services to procure two Ray units, he said.
“Unfortunately, we have not been able to replicate this model with any other hospitals,” Mahin said.
“However, we do have long-term care facilities and retirement homes in Canada that are currently using our products.”
The piecemeal nature of procurement in Canada’s healthcare system and failures by governments and healthcare buyers to prioritize the scaling up of domestic digital health innovators is the subject of a new report from the Council of Canadian Innovators that calls for change.
“Where strong domestic solutions exist, governments should prioritize building and scaling them at home,” Patrick Searle, chief executive of the CCI, said in the report.
“Our publicly funded healthcare system should function as a platform where Canadian innovators can prove their solutions, scale them nationally and build the credibility to compete globally.”
He said procurement should be aimed at better outcomes and long-term public value, with predictable pathways from pilot to scale, coordination across provinces and health authorities, and secure usable data that supports innovation while protecting privacy.
The report published Monday by CCI, a national organization of startups and scale-ups that aims to reshape innovation policy, outlined a number of systemic barriers holding the system back and proposed six major recommendations.
It urged governments to create a national competitive marketplace for digital health procurement, building in common requirements across the system, which can be tapped by provinces and other health authorities.
The current system requires healthcare professionals and innovators to deal with 13 different provincial and territorial systems across the country, with different capacity, policies and methods of delivering care. Improving digital “interoperability ” between them could unlock $2.4 billion in efficiency gains annually, according to CCI.
The organization is also calling on governments and healthcare buyers to strengthen Canada’s digital health ecosystem by adopting “Buy Canadian” policies and evaluating procurement bids based on total public value rather than lowest upfront cost alone.
Another recommendation is to establish concrete and predictable pathways from pilot projects to procurement contracts, which would help innovative health tech companies allocate resources and scale up.
With healthcare spending reaching $372 billion in 2024 and poised to rise to more than 12 per cent of Canada’s gross domestic product, the CCI report argued that there are high costs to leaving the system fragmented and relying on foreign providers already in place.
“Fragmented governance and outdated slow, procurement processes… limit interoperability, slow adoption and prevent proven solutions from scaling,” the report said. “These barriers slow down Canadian digital health firms and entrench the dominance of large, foreign incumbents.”
Canada’s publicly funded healthcare system could be transformed in a similar way to Ottawa’s plan to ramp up domestic defence capabilities and lessen reliance on the United States, the report suggested.
“Just as the new Defence Industrial Strategy takes a build-partner-buy approach to developing Canada’s defence innovation capabilities … strategic investment in Canada’s healthcare sector should look to build at home first and partner and buy off-the-shelf only where options can deepen Canadian capabilities and innovation ecosystems,” the report said.
“Canada’s publicly funded healthcare system is uniquely positioned not only as a service delivery model, but as a platform to grow Canadian companies to global scale. When domestic firms deliver excellence at scale within Canada’s public system, they gain credibility in international markets.”
