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Canada / Analyst Insights
Winners & Losers (Part 2): Telemedicine Emerges in Canada

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by Eva Koronios, Industry Research Analyst
Aug 21 2019

When we talk about technological innovation in medicine, we usually focus on the developments in treating disease. But what about a revolution in the doctor-patient relationship’s fundamental structure? What if we could change the way individuals interact with their physicians? What would this look like?

These questions are the driving force behind telemedicine companies such as Felix Health Inc., Dialogue and Maple. In short, these operators provide individuals with remote access to healthcare services, so patients no longer have to meet with a doctor to receive a diagnosis. Instead, receiving care involves downloading an app and filling out a questionnaire. For example, doctors in Felix Health’s network review patients’ questionnaires and decide whether to issue a prescription, which can be ready for pickup or shipped within 48 hours. Although telemedicine platforms may differ cosmetically, their premise is the same, to provide individuals with readily accessible “e-care.”

The emergence of telemedicine in Canada is a response to some of the healthcare system’s most deeply rooted issues. Although lauded for its universal healthcare system, Canada has a well-publicized national shortage of physicians, with Canadians in every province facing long wait times in ERs and doctors’ offices. Telemedicine hopes to bridge the gaps left by this thin supply. However, innovation in an industry is bound to satisfy some parties and dissatisfy others. So, who exactly benefits here and who loses out?

Winner: Insurance Companies

This may come as a surprise, but companies in Canada’s Insurance Brokers & Agencies industry (IBISWorld report 52421CA) could benefit significantly from telemedicine. Provincial insurance plans tend to only cover in-person visits, causing patients who consult telemedicine services to either pay out of pocket or seek coverage through their private or employer-provided plans. As a result, patients unable to pay out of pocket may have to purchase private plans that do cover telehealth, increasing industry revenue. Moreover, employers may look toward purchasing these more-inclusive plans for their employees, further underscoring the industry’s potential revenue increase.

Winner: Patients and Their Employers

According to Canadian Family Physician, only 8.0% of rural physicians are practicing. However, telemedicine isn’t only ideal for rural patients. Whether you’re a busy parent, have mobility restrictions or possess limited means of transportation, telemedicine can help potentially address medical afflictions anytime, anywhere. Furthermore, patients won’t have to waste sick leave waiting in the long lines that have characterized ERs and doctors’ offices in recent years.

In 2017, the Commonwealth Fund found that Canada ranks last among 11 “high-income” countries for both doctors’ same-day responses to patients and also ER, specialist and elective surgery wait times. This can ultimately harm the economy, as patients are often forced to skip work to receive care. Employers often absorb these costs as lost wages, estimated at $16.6 billion annually. The Fraser Institute confirms this, as over 1.0 million people who waited for treatment in 2018 each lost an average of $1,924 (excluding evenings and weekends) due to lost wages and reduced productivity ($5,860 including evenings and weekends). Moreover, IBISWorld estimates that the number of mobile telephone subscriptions and fixed broadband connections will rise at respective annualized rates of 3.4% and 2.9% over the five years to 2024. With more Canadians connecting to the internet than ever before, telemedicine will become cemented as an attractive option for Canadians and the 1.3 million businesses that employ them.

Loser: Physicians and Hospitals

Although telemedicine has its upsides, many Primary Care Doctors (IBISWorld report 62111aCA) and Hospitals (IBISWorld report 62211CA) in Canada are concerned about its drawbacks. Is more care equivalent to better care? What if a doctor treating a patient online misses something that indicates a serious health issue? How can a physician confirm a patient is accurately self-assessing their symptoms? These are just some of the questions that doctors have posed, alongside concerns about medical licensing.

In the future, as the system evolves, telemedicine will likely become more regulated, however, as it is still so new, there is currently no regulatory oversight in place. Consequently, some doctors are worried about the legality of being licensed to practice in one jurisdiction while their patients may be located in another. Perhaps most of all, doctors are worried about there being no continuity of care in telehealth services, as patients interact with a new doctor every time. With the doctor-patient relationship regarded as sacrosanct by physicians, many doctors are dissatisfied with how telemedicine could shake things up.



Looking for additional industry impacts of emerging trends within Canada? Check out our previous Analyst Insight on the winners and losers of meatless substitutes here! 




Edited by Kieran Newton
Infographic Design by Alexandria Valenti