The digital disruptors changing health care in Canada

Digital health companies are creating a paradigm shift across the health care ecosystem

At a glance

  • In the pandemic environment, the Canadian digital health space is getting increasing attention, especially as health systems increase adoption and more people become comfortable using digital solutions.
  • Digital health companies are accelerating transformation in health care by enabling shifts to a care system that’s more predictive, preventative, personalized and participatory.
  • We’re starting to see early signals of what the future of health will look like—key digital health segments and trends to watch include virtual care, home care, predictive analytics, privacy and mental health.
It’s undeniable: COVID-19 has changed the way care is being delivered in Canada. The pandemic has put immense pressure on those in our health care system to adopt new ways of working, and we’ve seen new levels of collaboration between the private and public sectors as they’ve come together to protect the wellbeing and safety of citizens.

Digital health, defined as the use of technologies to drive improvements in the design of medical products and the delivery of health care services, is powering much of this collaboration and innovation. As the pandemic continues to put pressure on health systems in the months to come, we expect this trend to continue to accelerate.

Startups in the space have already raised US$17.8 billion globally year to date, well on track to outpace last year’s levels.

While we were already moving in this direction here in Canada, demand for virtual care—a prominent segment of digital health—is now up dramatically. And virtual care is just the start. There are many other areas of opportunity in digital health, whether it’s secure ways of sharing images and records from smartphones, intelligent health care diagnostic equipment or novel machine learning algorithms that predict disease and infection outbreaks.

But it’s not just demand that’s up—we’re also seeing corresponding levels of satisfaction with digital health solutions. Citizens are adopting these solutions and forming new, potentially longer-term habits, such as online booking and quantified self and virtual visits.

The bottom line? We’ve seen a supercharge in the adoption of digital health solutions. Startups in the space have already raised US$17.8 billion globally year to date (YTD), well on track to outpace last year’s levels.

Our Digital Health Market Map

In collaboration with CB Insights, we’ve mapped out the top 50+ venture capital (VC) backed digital health companies across the health ecosystem in Canada. They’re categorized based on the following segments: provider, patient, life science R&D and payer & public health.

Historically, provider and patient-centric solutions have dominated Canada’s digital health sector. But this year, the spotlight’s on a new segment: life science R&D, which has helped drive the development of diagnostics, vaccines and treatments against the COVID-19 virus. Despite the segment having an average company age of 5.9 years, many of these companies have quickly become digital health champions, raising US$202.4 million in 2020 YTD.

We’ve used CBI’s data to bring to life some ideas about the health ecosystem of the future, and we’ve also highlighted some trends to watch in the coming months in this increasingly hot investment space.

The health ecosystem of the future

Around the world, digital health companies are accelerating transformation in health care by enabling important shifts, for example, from institutional care to digitally enabled care in the community and from doctor-centred care to patient-centred care. All signs point to the health ecosystem of the future continuing to align with the concept of 4P medicine, which means it will be predictive, preventative, personalized and participatory.

As you can see, many of these shifts align with and will be enabled by new health technologies like the ones offered by the Canadian companies on our map.

Predictive health technologies are all about the intelligent use of data: many of these tools accumulate, analyze, synthesize and act on data—often proactively. With these tools, we can see artificial intelligence (AI) in action, leveraging the power of health care data sets. An example is Knowtions Research’s AI platform, which helps insurers unlock and use predictive insights from health data to automate claim management and enhance the patient experience. Another example is Deep Genomics, which is one of many companies using AI to accelerate all stages of drug discovery and development.

As we learn and begin to be able to predict risks for people, we can take action in a more preventative way, whether at home or in the community. An example is Ayogo’s gamified health applications, which provide timely, personalized interventions to patients with serious or chronic diseases. The trend of simplified and often gamified access to knowledge and information will likely lead to improved awareness and less strain on the health care system.

Instant, real-time health monitoring allows us to understand the consumer’s needs as an individual and help them act on and manage their health in a personalized way. An example is Swift Medical’s AI-powered mobile app that captures wound care information and provides immediate personalized tissue analytics using machine vision algorithms. Technologies such as this one provide a new level of accessible and affordable personalization that will likely raise the bar for what individuals expect going forward.

In this new, connected health ecosystem, we can activate the most untapped potential: the time each individual has to themselves, allowing them to take a participatory role in managing their own health. Examples include Dialogue’s and Maple’s virtual care platforms, which allow citizens to access on-demand primary care, mental health therapy and other services.

Bringing it all together

Here at PwC Canada, we expect to see significant investment inflow into digital health in the near future. In fact, we estimate digital health spending will more than double by 2030—going from making up 3% of global health care expenditures to an estimated 8%. Valuations have started and will continue to increase as investors express renewed interest in digital health given the accelerated timeline to adoption and, as a result, the return on investment. As target valuations increase along with total addressable markets, we expect to see new challenges to consolidation attempts of existing market participants with an increase in competition from global players looking to tap into the potential of the Canadian digital health ecosystem.

Organizations shouldn’t be going about this alone. Engaging in joint ventures, partnerships and other collaborations with expert partners will empower them to accelerate new product and service offerings. Digital health platforms are now going to experience what other sectors have for years—technology isn’t the answer in and of itself. As such, market participants should have a clearly defined strategy, use cases and a framework in mind when partnering with emerging digital health companies.

Contact us

Interested in learning more about how to navigate this emerging market in Canada? Contact us.

Contact us

Kai Lakhdar

Kai Lakhdar

Partner and National Private Equity and Pension Fund Consulting Leader, PwC Canada

Andrew Popliger

Andrew Popliger

National Technology Leader, PwC Canada

Tel: +1 514 205 5181

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