A small group of senior health research managers is mounting a major initiative to turn Canada’s yawning health care deficit into a surplus by transforming the way in which health care dollars are spent and how research is financed and commercialized. Dubbed Health Innovation Canada (HIC), the initiative has been the focus of several months of policy development and closed-door consultations designed to gauge potential support for its vision.

Conceived as an arm’s length organization, HIC is being led by Dr Henry Friesen, chairman of Genome Canada’s board of directors and Dr Aubrey Tingle, president/CEO of the Michael Smith Foundation for Health Research (MSFHR). They are being assisted by Christine Nymark, HIC’s VP who is on a year-long interchange to MSFHR from her position as associate assistant DM of Transport Canada’s policy group. HIC officials declined requests to be interviewed for this story.

The campaign to solicit support for the HIC has been a classic stealth operation, known to stakeholders but largely invisible to the public. A rare instance of the HIC being mentioned was in Paul Martin’s landmark speech last September to the Montreal Board of Trade. In his address, Martin mentioned almost no names except one – Henry Friesen – reflecting the powerful influence wielded by the former president of the Medical Research Council (MRC) with top Canadian decision makers (see box).

HIC HAS ROOTS IN CWHIC

The challenge to create HIC is perhaps even more imposing than Friesen’s last major success, spearheading the transformation of the MRC into the Canadian Institutes of Health Research. The idea for HIC expands upon the pioneering work of the Canada West Health Innovation Council (CWHIC), an organization created in 2002 to strengthen the commercialization of health research in the four western provinces.

The CWHIC is the result of recommendations and consultations conducted for the Friesen-chaired Western Canadian Task Force of Health and Economic Development. Tingle is currently the CWHIC’s chair and CEO. Both Tingle and Friesen sit on the board which includes the top administrators of several western Canadian-based hospitals and universities.

Friesen articulated his early thinking on HIC in an address made last April to the Public Policy Forum (PPF), which produced a key study — Moving from Debate to Action: Securing the Future for Canada’s Health System. In his presentation, Friesen outlined the scope of the challenge and asserted: “If we could mine the potential that exists in the health sector, we could build an industrial enterprise larger than the auto sector.” He called for better alignment between Canada’s economic and social agendas and noted that no health ministry in the country has an economic branch.

$3-BILLION FUND?

Friesen also alluded to the magnitude of the HIC proposal, stating that a “preferred approach” would be to establish a $3-billion “opportunities fund” that would serve as a catalyst for “developing a globally competitive health industries/products/services sector that matches in quality and effectiveness the best in the world”. The value of the fund is based on provisions in the recent Health Accord which designate more than $3 billion towards health and bioinformatics, telehealth and e-health, genomics/proteomics and biotechnology and patient safety systems.

At this point in HIC’s evolution, emphasis is being placed on assessing areas requiring action, coordination and assistance before governance issues are resolved. One potential model — termed a powergrid in an HIC document being presented to stakeholders — would feature decentralized units with a centralized support mechanism and funding to foster linkages and achieve economies of scale. Critical mass would be achieved by creating and supporting a series of linked innovation networks, leading to an innovation infrastructure and economic development rooted in research.

The governance structure would see a board of directors overseeing health innovation capacity building and a health innovation trust and/or fund of funds. The latter would have a series of sub-funds dedicated to commercialization, marketing and export readiness.

HOLISTIC APPROACH

HIC is distinguished from previous health commercialization proposals by its scope, which encompasses the complete health care system. That includes players and institutions that lie between health research and product development, namely hospital administration and health care delivery. By taking a more holistic perspective to health commercialization, it’s hoped that economies of scale, new investment and horizontal coordination will result in greater commercial activity.

The federal and provincial governments have invested $18 billion over the past five years in S&T. At the same time, however, approximately $480 billion has been spent on health care and Canada’s annual deficit in health care products is $8 billion and growing rapidly. That translates into more than 80,000 private sector jobs in foreign countries supported by Canadian tax dollars.

“If we continue to operate as we are and remain unmindful of our stewardship role, this number is projected to grow to 100,000 high level private sector jobs,” Friesen stated in his PPF speech. “There is an alternative. It is to see Canada’s publicly funded health system not as a cost to be endured, but as an opportunity to be explored. To align more effectively our social and economic policy directions; to put in place the right incentives; to ensure the investment and regulatory regimes facilitate access to capital markets; and to celebrate success.”

The goal of HIC is to develop a health innovation industry cluster and become the so-called Silicon Valley of health innovation. That would require increasing health care market share to 10% from its current 3% and dramatically increasing the return on investment. HIC contends that a key input achieving such a goal would be an integrated investment and regulatory climate that attracts new private sector investment.

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