Canadian Hospitals Urgently Need Innovation Support

April 8, 2025 – Here’s the diagnosis: Canada’s hospital system is capacity constrained and in urgent need of innovation support, according to a new C.D. Howe Institute report.

In “Enhancing Innovation in Canadian Hospitals: The Obstacles and Solutions,” C.D. Howe Institute Associate Director of Research Rosalie Wyonch takes a deeper look at our healthcare system’s declining performance despite increased resources – examining the obstacles and enablers of innovation, and how they influence hospitals' capacity to adopt and scale innovations.

Overall, Wyonch finds that Canada's healthcare innovation landscape needs sustained policy attention to not just generate innovations, but to create the systemic conditions required for their effective scaling and implementation. However, there are steps that can be taken right now to support an innovative healthcare system that puts patients first.

“A stark reality of our current system is that no one institution or health leader is directly responsible for overall system improvement or ensuring coordination that prioritizes patient needs and improving outcomes,” says Wyonch. “The system is fragmented and complex, meaning there is no single ‘silver bullet’ solution to increase hospitals’ capacity to adopt and implement new technologies.”

Using a qualitative survey and interviews with front-line workers and decision-makers, the author finds that the most important drivers of innovation in Canadian hospitals are clinician and front-line staff engagement (13 percent), leadership engagement (13 percent), organizational culture and the courage to take risks (12 percent), supportive funding (11 percent) and organizational frameworks (10 percent). The largest drivers of innovation are also mirrored in the biggest barriers facing hospitals – with challenges clustering around funding structures (23 percent), system integration (16 percent), risk aversion and status quo rigidity (14 percent), and organizational capacity (resources dedicated to change management, a lack of leadership and clinician buy-in).

Clinicians, meanwhile, were identified as the most important stakeholders for successful implementation of new technologies, processes, and investments, followed by hospital executives and department managers. “The importance of clinical and hospital executive leadership as the largest drivers of innovation, with funding structures and a lack of system integration being the largest barriers, shows that the hospital system depends on individuals being intrinsically motivated to improve patient outcomes and efficiency,” says Wyonch.

To tackle these challenges, Wyonch says a coordinated policy response with attention to institutional leadership and system-wide integration would help.

The author proposes provincial and federal Ministers of Economic Development, Innovation and Healthcare coordinate their mandates for health-related initiatives and goals, with measurable outcomes and accountabilities. Further, to reduce regulatory barriers, innovation sandboxes could be created to provide a structured framework for testing new technologies and processes under controlled conditions.

As well, she says, provincial governments should consider creating an innovation marketplace as part of public procurement and regulatory reform. This could serve as a platform for provincial health, regional and hospital administrators to bring their problems and desired outcomes to the market instead of pre-determined solutions, allowing for a broader range of bids and approaches.

Wyonch also proposes the creation of time-limited incentives for specific goals with guidance on their implementation and resources; encouraging flexible, accountable funding structures; and group purchasing organizations facilitating knowledge sharing between hospital buyers through communicating results across institutions. “These recommendations are the first practical steps for transitioning the siloed inertia of the status quo to an integrated and innovation-focused public hospital care system,” concludes Wyonch.

Read the Full Report

For more information contact: Rosalie Wyonch, Associate Director of Research, C.D. Howe Institute; and Lauren Malyk, Manager, Communications, C.D. Howe Institute, 416-873-6168 or lmalyk@cdhowe.org