New Tech Is Transforming Healthcare

By Kelly M. McMahon

The U.S. healthcare system remains a global outlier in both innovation and cost.

The U.S. healthcare system is both complex and expensive. The U.S. spends twice as much per capita on healthcare versus its developed-country peers yet life expectancy is lower by 6.3 years¹ (in part due to a lack of pricing transparency, a mix of private and government payer systems, and an aging population).

Meanwhile, healthcare companies continue to develop new technologies and seek new ways to improve patient outcomes and reduce overall cost – efforts that, we believe, present potentially attractive opportunities for long-term investors.

Some key areas, in our view, that benefit from these trends include:

• Telehealth. Virtual delivery of basic healthcare services removes barriers to entry, especially for those in rural areas or with transportation issues, thereby increasing convenience and expanding access to care.
• Artificial Intelligence (AI). By identifying patterns in vast amounts of clinical data, groundbreaking generative AI models have the potential to accelerate a range of activities, such as diagnosis, treatment planning and drug discovery.
• Gene Therapy. These technologies can deliver genetic material into cells to correct or replace defective genes, potentially treating a wide range of diseases, including cancer, inherited disorders, and infectious diseases.
• Therapeutics. While the upfront costs for certain drugs can be steep, these treatments have the potential to treat chronic conditions and reduce costlier interventions, such as hospital visits. GLP-1 medicines², for example, can combat diabetes and obesity by mimicking the body’s natural GLP-1 hormone, which stimulates the release of insulin, in turn slowing the rate of digestion and suppressing appetite. While still in the early stages, weight-loss drugs have the potential to improve health outcomes and lower costs by reducing the risk of chronic conditions such as heart disease, stroke and kidney disease.

We believe new technological innovations and others are transforming the US healthcare landscape, making healthcare more accessible, personalized and effective.

As these innovative areas of healthcare continue to evolve, we continue to monitor and remain optimistic about the entrepreneurial spirit leading to better outcomes for patients and payers alike.

Source: (1) Peterson Center On Healthcare; (2) This acronym stands for Glucagon-like peptide-1

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