New partnership will connect tech companies with healthcare system to accelerate innovation

For decades, businesses trying to break into the healthcare market have looked south of the border, steering clear of Canada’s fragmented healthcare system and its onerous procurement process. A new strategic partnership between Communitech and CAN Health Network is aiming to change that by connecting domestic tech firms to procurement opportunities in a national integrated healthcare market.

The Waterloo-based innovation hub Communitech and the CAN Health Network — often referred to as CAN Health — announced the partnership this month, which they say will accelerate the adoption of new technology in the healthcare system and help SMEs commercialize their IP and scale up in Canada.

“We’ve got amazing MedTech innovation in the country and huge need for innovation in the healthcare system coast to coast, but the systems haven’t been connected, especially pre-COVID,” said Chris Albinson, CEO of Communitech, in an interview with Research Money.

“COVID very suddenly and very abruptly taught us that we need to have the domestic capacity in innovation for healthcare and it needs to be intimately connected to our healthcare system.”

Communitech will identify tech companies from across Canada that can bring innovative solutions to the healthcare sector, and CAN Health will connect the companies to procurement opportunities through its national, integrated marketplace. CAN Health's marketplace consists of 25 healthcare organizations and companies distributed across six regional networks, with a total purchasing power of $40 billion.

The partnership will build on the success of CAN Health’s first commercialization project between Kitchener-Waterloo’s Grand River Hospital and Axonify, a Waterloo-based company that has created a training platform for frontline employees. The partnership uses Axonify’s gamification system to reinforce training in employees, physicians and other healthcare providers in just minutes a day.

The company has found global success in other sectors, including retail, grocery, contact centers, finance and insurance and professional sales. Healthcare is a new market for it.

A massive market to tap into

In 2021, total health spending in Canada is expected to reach $308 billion, or $8,019 per Canadian, making Canada's healthcare system a massive market for small- and medium-size enterprises (SMEs). But, according to Communitech, tech founders say government procurement opportunities is one of the top challenges for scaling up. The problem is particularly acute in healthcare. As a result, SMEs often turn to the United States and other markets where there is less red tape and a greater return on investment.

"That's been to the systemic detriment of everybody — from the startups to the healthcare system and to patients," Albinson said. "That is why we thought it was so important to have this national partnership with CAN Health. We want to understand what the systemic issues are in terms of preventing the successful commercialization of IP in Canada and break down those barriers."

The CAN Health Network was created in 2019 to help high-growth health companies scale faster in the domestic market by accessing consolidated procurement opportunities. The idea originated with Dr. Dante Morra, the chief of staff at Trillium Health Partners in Ontario, and now one of the leads for the network, and Dr. Deepak Kaura, chief medical officer at quantum computing firm 1QBit. CAN Health is funded by the Government of Canada.

CAN Health's integrated market enables SMEs like Axonify break in, test and refine their products and services by working with a single partner, then rapidly scale across the network.

"The ability to sell to hospitals coast to coast really changes the economics for innovators. Now, not only do you want to scale up here for the good of the country, but it's now commercially viable to sell in Canada and have success," said Albinson.

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