For-profit Tailor Medical health centre shuts its doors

This article was published by The National Post on May 18th 2012.  To see this article and other related articles on The National Post website, please click here

One of the most ambitious for-profit health-care ventures launched in Canada recently has gone out of business, barely a year after reportedly investing $4- to $5-million in an opulent “executive health” clinic in the heart of Toronto’s financial district.

Customers who arrived for appointments at Tailor Medical recently found the doors locked shut.

Neither the facility’s two founders nor its landlord could be reached for comment Thursday. Other sources, however, say the company is already looking for someone to take over a 12-year lease on 24,000 square feet of space in a Bay Street office tower, and buy the expensive equipment inside it.

“They were just bleeding money and enough was enough,” said one source familiar with the situation.

For a block annual fee, customers to Tailor Medical would receive an initial “head-to-toe” medical that included genetic screening and other diagnostic tests, a plan to address health problems identified by the examination, and regular check-ups every two months.

Such clinics — which are operating across Canada in various forms — must bill their provincial medicare systems when they provide medically necessary services, but can charge patients out of pocket for extras like diagnostic screening.

Many of the patients are executives whose employers purchase memberships on their behalf.

Taking up a full floor of the Bay-Adelaide Centre tower, Tailor Medical is replete with rich wood trim, granite and stylish furniture. It included a state-of-the-art gym, as well as areas for yoga and meditation, according to the company’s website, which gives no indication the clinic has closed.

Dianne Carmichael, a health-care analyst with experience in the private health sector, said she was not surprised to hear the service had closed after touring the facility at the invitation of John Cape, Tailor’s CEO, a couple of months ago.

“Other than me and him and the receptionist, there wasn’t anybody there.” Mr. Cape could not be reached for comment.

On Thursday, the hallway outside the 24,000-square-foot facility was dark, the doors were closed and there was no sign indicating what had transpired with the business.

“The clinic is empty but I honestly don’t know its current status as a business,” Dr. Tim Cook, Tailor’s medical director until April, said via email Thursday, adding that he is now just keen to move on. “From my perspective the medical protocol was a big success – lots of positive feedback about its unique components. We were growing but, for many reasons, not fast enough.”

Ms. Carmichael, former head of the Best Doctors health-advocacy service, noted that the Toronto branch of the famed, U.S.-based Cleveland Clinic, one of a handful of other private health clinics offering similar services in the city, also has beautiful quarters in the financial district, and has also seemed very quiet during her visits there.

Despite widespread discontent about shortcomings in the public health-care system, she questioned how much demand there is for private, fee-charging services like Tailor.

“I don’t know that people are knocking down the doors for that,” she said. “I think there is some frustration on the part of many people, who are concerned about access and that sort of thing. Those clinics appeal to the higher end of the financial income bracket, and they’re appealing more to executives in corporations, and there’s a limited market.”

The MedCan Clinic, one of Tailor Medical’s most established competitors, however, argued the demand remains strong, though convincing Canadians they should pay out of their own pocket for health care can take some effort.

“The whole idea of private medicine is in a sense counter-intuitive to people, so it takes a while for people to understand well and truly what it is you’re offering,” said Bronwen Evans, MedCan’s vice-president of marketing. “It would be different in the U.S. because people are used to paying out of their pocket. But here, you still have to get over that hurdle.”

In fact, MedCan has recorded double-digit annual revenue growth for the last number of years, and now employs 55 doctors and about 250 other staff, said Ms. Evans.

Other types of private health businesses, such as surgical centres in Quebec, Alberta and B.C., appear to also have fared well.

Mr. Cape and Dr. Cook had both worked at MedCan when they helped launch Tailor last year. Also listed as a director of the defunct clinic is Michael Scot-Smith, a former real-estate developer and current head of the Slimband chain of weight-loss surgery clinics and Credit Medical Corp., which provides loans to obtain cosmetic surgery.

Neither Mr. Cape nor Mr. Scot-Smith could be reached for comment Thursday.

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