What does a US healthcare company face when they enter the Canadian market? And what should a Canadian company expect when they decide to expand to the US?
Sparked by HIStalk
These questions were sparked by HIStalk, the world’s best health IT blog. HIT consultant Ted Reynolds wrote about his recent experience implementing an EMR in Europe, after years in the HIT trenches in the US. Ted’s article got me thinking: I was raised in the US, but I’ve spent my career in Canada, mostly marketing back to the US. What are the differences that affect go-to-market strategy?
7 Go-to-Market Differences between US and Canadian Healthcare
With the last decade spent in health IT and medtech, here is my take on some of the major differences and potential blockers.
1. Canada is 10 markets (plus 3). Healthcare delivery is driven by ten different provincial governments (and 3 territorial governments serving a population of about 100,000), so you have 10 different sets of IT-related requirements, regulatory frameworks, and buyer landscapes to address. Sales cycles are longer in Canada than in the US. You have more hurdles, and you will go to RFP in some provinces on just a $25,000 deal.
2. The regulatory and standards landscape will change how you market. If you’re a Canadian company getting into the US, you’re going to be navigating a brand-new regulatory and standards environment. Get to know HIPAA. Understand that Meaningful Use pushed EHR adoption like nothing else. And ICD-10, which was a no-brainer migration back in 2000 in Canada, is kind of a big deal in the US.
3. Don’t try to market with the same value propositions. The value propositions in each country are based on a completely different set of business and payment models. If you live in Canada, you know that wait times, especially around cancer care, can be a huge driver. But in the US, apart from the VA and apparently Kaiser, not so much. On the other hand, if your product or service can impact length of stay and 30 day readmissions, talk that up in the US.
4. Payment models will shift your pricing models. In the US, hospitals and physicians are both reimbursed on a fee-for-service basis by payers (by both CMS and private payers). In Canada, physicians are on fee-for-service, with a set of performance quotas and targets thrown in. But hospitals are on budgets. They get a pot of money and they have to make it last. So that’s going to influence your pricing models, from capex vs. opex to revenue recognition.
5. Healthcare reform is cyclical. In Canada, provincial ministries of health manage healthcare governance. And depending on the election cycle and the economy, you are going to get these bouts of reformist zeal passing through the system every few years. Right now, Quebec (the second largest province) is going through a reform where power is being centralized and administrative structures are being eliminated. And there’s a major PR battle being waged by the nurses’ union, the physicians’ unions, and other care providers in the local press.
6. Technology development is amazing. Take the Hacking Health movement, which got its start in Montreal, Canada’s second-largest city. 3 years ago, Hacking Health was a weekend geek experiment, bringing clinicians and technology experts to collaborate on rapid-prototyping healthcare product concepts. And now Hacking Health events have spread all over the world. Clearly, Canada doesn’t lack for innovation. But the US has a leg up (for now): money. The US has the VC and institutional capital to actually conquer markets and fuel massive go-to-market. And that’s where Canadian companies go when they are ready to go big.
7. But technology adoption is cautious. Canadian healthcare doesn’t stint on the big, visible purchases like imaging equipment. But take patient education. I was recently visiting a family member at one of the best cardiac care units in the world, which happens to be in Ottawa, Canada’s capital. The discharge package was a brick. Think 50-page booklet at a 12th grade reading level with dense type. It’s hard to read and absorb. In Canada, patient education is still produced, handed out, and tracked facility by facility. The US, which has the Joint Commission driving patient education, does better a better job.
What else can we learn from each other? Let me know in the comments.
Image credit: By Atilin (Own work), via Wikimedia Commons