Expanding a health-tech company can occur in various ways
August 30, 2021
TORONTO – It’s not easy to grow a successful technology company in the healthcare sector – purchasing cycles are notoriously long at hospitals and other medical centres. And often enough, entrepreneurs have difficulty just getting a foot in the door.
In a session aimed at helping innovators open those portals, a panel of entrepreneurs and a hospital executive commented on different strategies for success during an online discussion at the MaRS Impact Health conference in June.
Jennifer Sheils, chief information officer at Horizon Health, in Saint John, N.B., said that selling to healthcare organizations has traditionally been challenging, but that recently, things have changed. “We’ve had some disruptors, like COVID,” she said. “Our risk tolerance has changed. There’s a new appetite to engage with industry.”
That’s because the pandemic forced healthcare organizations to go virtual as soon as possible. For a while, going online was the only way to deliver services safely. And many healthcare facilities could only do it with the assistance of tech companies as partners.
Now, healthcare facilities across Canada are more open to allying with the private sector, including young and innovative companies, to implement new technologies.
Significantly, Sheils mentioned that a growing number of healthcare organizations are joining the CAN Health Network (https://canhealthnetwork.ca/), which links healthcare facilities with entrepreneurs to help them refine and scale their innovations. Once they’ve proven themselves with a few hospitals, the network then helps them grow even further, connecting them with additional members.
As the companies have already been vetted by hospitals, and the innovations have been shown to be reliable and useful, it’s easier for innovators to make additional sales to other members of the network.
Sheils noted that Horizon Health itself recently joined the CAN Health Network. It will be working with entrepreneurs to validate new technologies and solutions and to help entrepreneurs grow their businesses. “We’re enabling direct access to our clinicians,” she said. “We will then support and handhold our customers throughout our network.”
In Atlantic Canada, there are eight other organizations that have joined the CAN Health Network; Sheils and Horizon Health are acting as the leaders in this region and will be actively fostering the rise of local companies. Innovators will be directed, as well, to other hospitals and healthcare organizations across Canada.
“It’s the first national project and approach of its kind,” said Sheils, referring to the effort of nurturing and promoting technology companies in conjunction with the healthcare sector. “In Atlantic Canada, we’ve leveraged learnings from Ontario and the Western edge.”
The CAN Health Network has members in Quebec, Ontario, northern Canada and the West. They include Vancouver Coastal Health, the Saskatchewan Health Authority, Trillium Health Partners, the University Health Network, Horizon Health and the Vitalité Health Network, the Francophone health system in New Brunswick.
Meanwhile, another panelist, James Bateman, CEO and founder of Medchart, described another way of growing a Canadian tech business: expanding to the United States.
While doing a PhD at the University of Toronto, Bateman launched Medchart in answer to a nagging problem – how to consolidate the medical records of patients that are scattered in different places. Bateman and a partner created a method and platform for bringing records together and making them easily accessible to patients, as well as their families and caregivers.
Of late, the company has also been working with legal firms and insurance companies that need access to patient records, with permission from the patients and their families.
While the company grew steadily in Canada, after creating an office in Dallas, business skyrocketed. “In the last year, we went from 50 employees to 150,” said Bateman. “Eighty percent of our business is now led by U.S. customers.”
Indeed, many entrepreneurial experts maintain that to quickly grow a business, Canadian start-ups should expand to the U.S. as soon as possible.
“For us, when we started in 2016, we were told that it’s never too early to work in the U.S.,” said Bateman. “It’s a heavy lift, but it’s worth it.”
He said the team decided on Dallas as a U.S. headquarters because of its central location. “FedEx and Amazon are here, because everything funnels through Dallas … If you do anything coast-to-coast, it really makes sense.”
While expanding to the U.S. can lead to growth, it’s not always necessary, stated Michael Wilson, CEO of Edmonton-based DrugBank. That’s especially true if a business is web-based, like DrugBank, which is an online database that provides a wealth of information about drugs, including drug-to-drug interactions. (https://go.drugbank.com/)
“You don’t have to be in the United States,” said Wilson, “thanks to virtual tools,” such as Zoom and Teams. He said that DrugBank has had “incredible scaling” recently, with business done around the world using virtual meetings.
“We have customers in 20 countries, with most of them in the United States and Europe.” While DrugBank makes a large portion of its data available for free online, full versions of the data for more intensive users require paid licences. As well, the DrugBank database can be integrated with an organization’s own solution through the use of an API, under licence. It is these users, including research facilities, who have powered the growth of the company, which was spun-off in 2016 from the University of Alberta lab of Dr. David Wishart.
“With virtual meetings, it’s easy to get connected with people,” said Wilson. “That includes Canada, which is a big place.”