You Can’t Scale Healthcare Innovation on a Hope and a Prayer

A smart national approach would focus on boosting public-private partnerships
medical record

The essentials

Canada’s healthcare sector suffers from “islands of innovation,” according to the 2015 report Unleashing Innovation: Excellent Healthcare for Canada. In this conversation with Smith Business Insight, Scott Carson of Smith School of Business discusses how a national approach to healthcare innovation could connect these islands and reverse our poor performance in healthcare outcomes relative to other developed countries. Carson is professor of strategy and organization and co-editor, with Kim Nossal of Queen’s, of the recently published A Canadian Healthcare Innovation Agenda: Policy, Governance, and Strategy. The following are his edited remarks.

The Challenge: Connecting Islands of Innovation

In Canada, healthcare innovation is a little bit over here, a tiny bit there, and a pilot project somewhere else. The quality of the innovation itself has nowhere to go without scale, without resources, without take-up. Without a broader strategic perspective on how that scale, scope, and take-up could be managed, innovation stays small. We really don’t have any broad Canadian approach to how we might adopt any of these excellent innovations and make use of them.

It’s the same type of problem that exists with Canadian healthcare’s fragmented structure. It’s not that the provincial approach to innovation isn’t okay. It’s just that it isn’t necessarily uniformly available to all Canadians. It’s very expensive because we haven’t taken advantage of the scale efficiencies that could be gained. It isn’t extendable into other spheres because we haven’t thought about it from a strategic perspective.

It's not as though we’ll collapse without a strategy. It’s just that we are underperforming in those same categories compared to other countries. The performance of European and Australian and British governments on the performance metrics that you find in the Commonwealth Fund report are all much better than Canada’s.

A National Approach Wouldn’t Undermine Provincial Rights

If you think of General Electric, for instance, in their many subsidiaries across a wide range of industries, countries, cultures, organizational forms, and strategic alliances, they have broad umbrella strategies that enable the subsidiary entities to operate very much on their own with their own specific strategies. If you think of the Canadian healthcare system, it’s not unimaginable that Canadians could have a broad strategic approach that forms an umbrella for all of our systems without imposing on each individual system some kind of rigid uniformity. It’s the absence of that broad umbrella that’s problematic. There are many federal initiatives, such as Canada Health Infoway, that are pan-Canadian in their scope. But they’re isolated from each other and not brought together by a comprehensive and cohesive strategy.

The notion that a strategy in some way violates provincial jurisdictions or necessarily must lead to restrictive uniformity is to misunderstand what strategy can be. The ideologues take the view that provincial jurisdictions are sacrosanct and that any attempt to even bring them together in collaboration is a violation of that independence. The ideologues fail to grasp the idea that a collaborative entity, one that each entity agrees with, would not be a violation of their individual jurisdictions. It would be a recognition that we all have common problems.

Government Minister, Respect the Divide

The federal government’s attempts to establish superclusters and innovation banks are small-scale examples but are not, in themselves, innovation strategies. These are really funding frameworks. My interest is on the governance side, in the de-politicization structures that would allow these entities to operate in accordance with sound decision making principles, not on the basis of political expediency.

The history of Crown corporations provides many examples of the friends of government being placed on boards, and sometimes even in management. Also various controlling devices are established, such as government approval of budgets or capital plans. Those kind of links between the government and the entity that they create are the killers. Any government-established apparatus —an innovation bank or supercluster fund — that allows for that kind of leaping over the divide is problematic.

Funding Public-Private Partnerships

The Naylor report had two key pillars: an “agency” and a “fund”. The agency would largely provide some kind of oversight to an innovation strategy and management for the country as a whole. The innovation fund would not so much provide money to entrepreneurs but for relationships between the public sector and the private sector. The kind of partnerships that would benefit most from this kind of funding would be those that potentially could generate highly desirable patient outcomes, but may not have immediate commercial prospects. These ventures between government and business wouldn't likely form without having some kind of financial support. The fund would allow these alliances to get started and be sustained.

Opponents of public-private partnerships often criticize private sector people for not being fully on board with public sector objectives. Well, they don’t need to be. They just need to be in a contractually structured working relationship that gives both parties with different objectives a common basis for working together toward some further objective, which is going to give them both what they want.

The vision is one where you don’t have each party separated from the other in siloed fashion, which is what we have in spades in Canadian healthcare. And it doesn’t presume that each of the participants in the market are going to be viciously competitive with one another — though they may be — but it allows for collaboration.

Finding the Political Will

The hope that the provinces and three territories will all somehow come together in a collaboration is just not going to happen. The federal government has to assert itself. Certainly in the Harper era, the federal government showed very little interest in taking any leadership role. It’s predecessor, the Martin government, wanted a role only so far as it would throw money at a system. The Trudeau government started off bringing the provinces together, but in the end engaged in bilateral negotiations with each of the provinces. That may have been expedient, but is not the kind of staying-the-course brand of leadership.

The federal government must insert itself into the Canadian healthcare landscape in a way that doesn’t terrify the provinces and territories that their jurisdictions are being intervened. The obvious opportunities would be pharmacare programs, seniors programs, electronic health records — areas where there’s very little actual opposition.

Unfortunately, that’s the problem that Canada suffers so dreadfully from. You have many calls for pan-Canadian electronic health records or senior strategies or consistent health education strategies. But very little that actually wraps them together in a comprehensive policy. The political will is essential.

Interview by Alan Morantz

Smith School of Business
Goodes Hall, Queen's University
Kingston, Ontario
Canada K7L 3N6

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