New normal also means new healthcare
One particular US news story that made it over to this side of the Atlantic at the beginning of January was billionaire Elizabeth Holmes being convicted of defrauding investors after a months-long landmark trial in California. Her claim was that she was about to revolutionise the healthcare industry with a test that could detect serious medical conditions (such as cancer, diabetes and heart disease) with just a few drops of blood. Prosecutors alleged that she knew the technology simply did not work, and she was found guilty of conspiracy to commit fraud (having raised more than US$900 million from billionaires including Rupert Murdoch). Holmes now faces a lengthy prison sentence. But in actual fact, the technology that she claimed to have developed is just around the corner. Indeed, healthcare is already heavily reliant on artificial intelligence-powered medical devices, blockchain technology, telemedicine and remote-patient monitoring. And Covid has given a tremendous boost to a sector that was already enthusiastically embracing digitalisation, making it an even more attractive investment opportunity.
In this week’s Strategic Insights, we take stock of healthcare digitalisation in 2022 and do a spot of crystal ball gazing.
On-demand healthcare is like on-demand everything else
The lockdowns of the past two years have kept us all indoors, so many of us have had to explore different ways of interacting with our GPs. Obviously Zoom is no replacement for a face-to-face moan with your doctor, but it does bring with it numerous logistical advantages – patients can get the information they need at a time that suits them, and they don’t need to travel to get it. GPs are also enjoying the benefits of more flexibility: the growth of the gig economy is driving the growth and popularity of on-demand healthcare.
Freelance medical professionals are now able to hire themselves out on a per-job basis, instead of having to remain loyal to a single medical facility. Just enter the word “doctor” into the search bar of the App Store on your phone and you will find numerous apps that put doctors in touch directly with people requiring ad hoc medical care. In short, it is becoming increasingly easy for physicians to provide patient care in specific circumstances, based on their expertise and schedule. They are becoming the Uber drivers of healthcare, flexibly meeting the changing needs of their patients.
Big data is already being used to improve healthcare
Big data underpins efficiencies in practically every area of modern life. It aggregates information gathered from social media, e-commerce sites and online transactions and can be leveraged to identify patterns and trends for future use.
As far as healthcare is concerned, big data can provide several major benefits.
Analysing patient records, for example, enables healthcare software to identify any inconsistencies between a patient’s health and whatever medicine they are being prescribed. Both healthcare professionals and patients can be alerted if there is any risk of a medication error.
Many of the people who end up in emergency rooms are the medical profession’s equivalent of “frequent flyers”. Indeed, they can account for up to 28% of visits. Analysing huge volumes of data can help to identify these recurring patients, and then preventive plans can be created that will lower the chance of their returning.
Throughout the pandemic, we have seen big data being used for predictive analysis. And even before Jonathan Van-Tam, Chris Whitty and Anthony Fauci were household names, data modelling was helping hospitals and clinics to gauge future admission rates more accurately so that medical facilities could allocate appropriate staff to deal with patients during seasonal flu epidemics.
Already, big data analytics and insights generation are being used to improve healthcare management, transforming the whole patient experience.
Virtual reality is already being used to treat patients
Ten years ago, telling people you could reduce their pain with a device that looked like a video game would have resulted in derision. But now, virtual reality is the cornerstone of digitalisation trends in healthcare, changing the way patients are diagnosed and the way junior doctors are trained.
Virtual reality is increasingly used in patient education, robotic surgery and both physical and psychological therapy. It is even being used in pain management – there is compelling data to suggest that immersion in a virtual world combined with a dose of cognitive behavioural therapy is an effective alternative to the prescription of opioids. Medical professionals can use virtual reality to construct an immersive patient-specific video demonstrating how surgery will benefit them and what results they can expect. And it has been found to be effective in treating anxiety, post-traumatic stress disorder and stroke.
Doctors are already able to use simulations in virtual reality to develop their skills and practise complicated surgeries. Meanwhile, patients are able to use virtual reality headsets post-surgery to exercise and follow physiotherapy… and autistic children use similar headsets to learn how to navigate the world.
From start-ups to major pharma companies, everybody knows that virtual reality has a key role to play in healthcare. Market commentators estimate that by 2025, the global virtual and augmented reality market specifically for healthcare will be worth some US$5.1 billion. There is no doubt that healthcare companies wanting to improve their digital marketing strategy would be wise to consider investing in VR. They see it as a powerful tool for understanding customers’ and patients’ needs and enabling them to engage virtually with their products and services.
Wearable tech and medical devices – this is just the beginning
Increasingly, companies and medical practitioners are able to glean health data from medical devices that people actually wear. Traditionally, you would only see your doctor once a year for a check-up or when something was wrong. But in the digital age, all of that is changing. Nowadays, people are focusing on prevention and maintenance – so much so that they check their health stats with the same frequency as they check the weather or market data. Healthcare companies are being proactive: they are investing in wearable technology devices that enable people to track their health vitals and seek medical attention when needed. High-risk patients can be monitored via wearable medical devices, and any major health events can be anticipated.
The wearable medical device market is expected to be worth more than US$27 million by next year. That’s an increase of almost $20 million in only six years.
Already, our smartwatches can do so much more than just tell the time. A Garmin watch or a Fitbit will count your steps for you. Some models include a heart rate monitor. Higher-end units may feature sweat meters so that diabetics can monitor their blood sugar levels. And even before Covid, asthmatics or people suffering from other respiratory illnesses were interested in oximeters to measure their blood-oxygen saturation rate.
There are numerous other benefits for companies which invest in such products. The whole healthcare experience becomes more personalised – these devices give patients a sense of ownership of their own well-being, making them feel significantly more involved in improving their health. Companies selling life insurance can use the data they generate to assess a patient’s risk of illness more accurately. Meanwhile, patients who assume responsibility for improving their health by implementing preventive measures might qualify for lower insurance premiums. And users can compete against one another in pursuit of a particular goal. There is nothing more heart-warming than a couple of Lycra-clad middle-aged men in a café poring over their Strava stats. Who can cycle the fastest and the furthest? Who can take the greatest number of steps in a single day? Who can be the most successful in limiting their calorie, sugar or alcohol intake? Even staying healthy can be gamified.
Artificial intelligence and healthcare
AI is the pinnacle of medical innovation and people are falling over each other to invest millions in it. Indeed, the AI-powered tools market is expected to exceed US$34 billion by 2025. By then, AI will effectively be shaping almost every facet of the industry.
AI-powered chatbots and virtual health assistants already perform numerous roles in the healthcare sector – they function as customer service representatives, they perform diagnostics and some even serve as therapists. Their versatility is reflected in the heavy investment being made in AI. Indeed, the global healthcare chatbot market will be worth some US$314.3 million by 2023: it will have nearly tripled in only five years.
But the real power and utility of AI can be seen in areas such as medical imaging, drug discovery and genomics. Al will make drug development significantly faster and more efficient, according to scientists. After only a year, the Covid vaccines are already something we take for granted. But there is simply no way that they could have been developed (in record time) without tremendous help from AI. Just for comparison, it’s worth considering that the four-year development for the mumps vaccine back in 1967 set a record for speedy vaccine development.
In total, AI is predicted to generate US$150 billion of annual savings for the US healthcare economy alone by 2026. Numerous start-ups are already seizing this opportunity: the number of active AI start-ups has increased 14-fold since 2000.
These are just a few digitalisation trends that are bound to become embedded as healthcare continues to innovate and adapt to patients’ changing needs and demands. In fact, it is fair to say that the healthcare of the future will fundamentally break with established practice as progress in genomics and information technology converges with advances in imaging, cloud computing, AI and so on.
Investment Quorum is interested in investing in companies and funds that are committed to bringing about significant improvements in the way we live, travel and use our leisure time. Investing in human health and health care systems is very much in line with that rationale. The declining costs of computing and gene sequencing make this an ideal time to invest in healthcare. Needless to say, companies which willingly embrace digitalisation sooner will reap the benefits sooner (in the form of dividends).
Unique, Boutique Wealth Management
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