Healthcare in Canada is often a topic of contention among the population, but the facts are that Canadians are very fortunate to have the system we do when compared to many other nations of the world. Currently, the healthcare industry in Canada is booming, with substantial investment occurring in both the public and private sectors. This is of critical importance for Canadian businesses to pay attention to, as it presents significant opportunities that can be capitalized on.
In this article, we will explore four eye-opening trends regarding the healthcare industry in Canada, and what they mean for the future of Canadian businesses. While some of these trends are directly impacted by domestic factors, others are influenced much more by external and international developments that are out of the control of Canadian business. However, learning about these trends and anticipating how they will evolve can help give your business an edge over competition as the healthcare industry continues its steady march forward.
First, we will take a look at some demographic factors that directly influence the nature of healthcare within Canada, then we will explore some fascinating domestic and international business statistics that Canadian companies absolutely need to know.
- Canada’s Population is Comparatively Very Healthy, but Also Aging
Life expectancy in Canada currently stands at 79 years for Men and 85 years for Women, which is among the highest in the world. While this is encouraging and speaks to an excellent quality of life in Canada, the impacts for business are far reaching. The other side of this coin is that the percentage of the total population that is 65 years of age is growing quickly, and with Canadians having fewer children on average, the percentage under 14 years of age is decreasing.
This double shift in population has significant impact on all aspects of the healthcare industry. The need for senior healthcare services is skyrocketing, while resources that were previously invested in other facets of the healthcare industry are facing a potential decrease in relevancy.
In addition, the workforce and human resources in the Canadian healthcare industry are changing as well. More and more Canadians are retiring, and with fewer young professionals emerging to fill the gaps, there is an increasing void in available talent. It’s highly likely that Canadian healthcare businesses will need to rethink their approach to talent acquisition and retention, as the demand for skilled personnel increases and the available supply of those skilled personnel decreases.
- Healthcare Spending is a Significant Portion of GDP
As a result of Canada’s commitment to public access to healthcare, Government spending on healthcare exceeds 10% of Canada’s GDP, one of the highest percentages in the developed world. This equates to well over $5000 in healthcare spending per capita. For Canadians, this has resulted in an increasingly healthy population and a better overall quality of life, which are definitely positive benefits.
However, for healthcare businesses this means a huge percentage of their transactions occur either directly with the Government of Canada, the provincial governments, or through officially-approved third parties. As many companies know, the nuances of dealing with government agencies can be very different than those of private businesses. Domestic healthcare companies must realize this and tailor their business models accordingly. International companies also must conform to the requirements set by the Government of Canada, or else run the risk of losing access to a significant portion of the global market for healthcare technology.
- The Vast Majority of Medical Devices Sold in Canada are Imports
Recent statistics show that imported devices make up the lion’s share of all medical devices sold in Canada, at approximately 80% of the total medical device market. This market is growing significantly, with estimates showing growth from $6.5 billion to $8.6 billion over 5 years between 2011 and 2016. This is a critical trend for Canadian businesses to be aware of, since the reality is such that imported healthcare devices are far more prevalent throughout the industry than domestically manufactured devices are.
This fact puts increased pressure on Canadian manufacturers to produce devices that are not only significantly more affordable than imports, but also achieve superior levels of quality and performance if they wish to attain enough competitive advantage to be a viable player in this market.
- Canada’s Medical Device Exports are Growing Substantially, as is the Trade Gap
While imports are the biggest share of devices sold within Canada, medical devices exported from Canada is a growing market. According to recent stats from the Government of Canada, the medical device export market grew from $1.8 billion to $3.1 billion between 2011 and 2016. However, with imports growing at a faster rate, the trade gap is expanding, with an estimated increase of 17% during that same 5-year time period.
This widening gap presents both concern and opportunity for Canadian healthcare businesses. Clearly, it illustrates the need for increased competitive action in domestic markets. However, it also shows that the demand for Canadian products and technology is increasing in the global marketplace. As this trend continues, it will be essential that Canadian businesses increase efforts in research and innovation, as well as improving manufacturing processes and efficiencies in order to minimize costs and grow capacity.
While the population of Canada will continue to benefit from growing investment in healthcare technology and services, the challenges faced by Canadian businesses will evolve due to many factors, such as the four trends illustrated in this article. Now is the time for many companies to adjust their strategic direction in order to capitalize on these trends and grow their advantage within a turbulent and aggressive international competitive landscape.
As part of this strategic adjustment, it will be critical for Canadian businesses to closely evaluate and refine their logistics operations in order to achieve higher levels of efficiency, cost savings, and service quality.
The team here at SCI consists of experienced logistics professionals with in-depth knowledge of what it takes to succeed in the fast-paced healthcare industry. Our experts can help with any aspect of healthcare product distribution operations, from warehousing and inventory management to transportation and customer service, and more.
Contact us today and let our team answer your questions and help your company evolve to meet the needs of the growing Canadian healthcare industry.