Where the money is: healthcare

Private spending on health care is on the rise, and Canadian businesses stand to benefit — big time.

This June, Quebec became the first province to table legislation allowing the purchase of private insurance for knee, hip and cataract surgeries already covered under its publicly funded health-care system. The move came as the result of the Chaoulli decision, a landmark Supreme Court ruling handed down a year earlier. In that seminal case, Canada's highest court declared “access to a waiting list is not access to health care,” and ruled that prohibiting Quebecers from purchasing private insurance while failing to deliver health care in a “reasonable manner” was a violation of the Charter of Rights and Freedoms. The court battle–led by physician Jacques Chaoulli and his then-73-year-old patient George Zeliotis over concerns that long waiting lists had impaired Zeliotis's ability to obtain timely hip-replacement surgery–was lauded as a victory for advocates of two-tier medicine. Critics were quick to pounce. “Medicare's ugly stepsister,” declared Michael Rachlis, a Toronto-based health-policy analyst. “Chequebook medicine” is on its way, warned Ray Martin, Alberta's NDP House Leader.

A year later, the consequences of the Chaoulli decision are trickling down to average Canadians, who now have more choice of where they receive health-care services. For-profit clinics–from private MRI and CAT-scan centres to surgical hospitals and primary-care facilities–are popping up at an estimated rate of one per week in Canada. Faster access to private surgical and primary care comes with a price, whether it's financed out-of-pocket or covered by private insurance, as in Quebec.

More and more Canadians are at least willing to acknowledge that increased private spending on health care is more a reality than a choice. In a COMPAS survey last January, 70% of those polled said they supported the Chaoulli decision; fewer than two out of 10 viewed its as unreasonable. According to the Canadian Institute for Health Information, private-sector health-care spending, which accounts for about 30% of all expenditures, will reach $43.2 billion this year, up from $32 billion five years ago.

One sector that stands to benefit: the for-profit clinic industry. The Canadian Independent Medical Clinics Association, a Vancouver-based advocacy group, claims that between $10 billion and $40 billion is flowing into the for-profit health-care sector each year. Good news, no doubt, for entrepreneurs such as Don Copeman (see page 64), the CEO and founder of the Copeman Healthcare Centre, whose Vancouver-based primary-care centre whipped up a storm of controversy when it opened last November. By the end of this summer, Copeman plans to open additional centres in Toronto, Ottawa and London, Ont.

Other health-care sectors, too, are benefiting from increased private spending. On the drug development front, top Canadian biopharmaceutical firms are getting closer to commercializing products, many targeted at aging boomers (see page 65). There are also exciting developments in medical and diagnostic devices (see page 70). And in hospitals and doctors' offices across the country, administrators are spending millions to update their health-record systems with sophisticated technology, creating a surge of demand for the products of Canadian health-care IT companies. The floodgates, it appears, are officially open.