Healthcare Innovation as an Investment Category

Healthcare Innovation as an Investment Category It’s no secret that the American healthcare system is complex, inefficient, and expensive (not to mention politically divisive). The harrowing statistics that accompany any discussion in healthcare are many and widely known, but most center around cost. According to a December 2017 report from the World Bank and World Health Organization (WHO), 800 million people globally spent at least 10% of their household budgets on health expenses for their families. Here in the US, healthcare costs average about $10,000 per person per year across all demographics, and about 44% of Americans say they avoid going to the doctor out of fear of unwanted medical expenses. It’s a problem that only seems to be getting worse with time.1 Yet as the future of healthcare seemingly becomes less certain, there is a growing feeling of excitement and opportunity from investors and tech entrepreneurs. Like any good innovator and entrepreneur would, they see the dysfunctional healthcare system as the next great market ripe for reform.2 Much of the interest stems from the fact that healthcare is front-and-center in the country’s collective consciousness at the moment, and that the Affordable Care Act (ACA) added tens of millions of people into the healthcare market. But arguably the bigger driver of optimism is the rapid advancement in wearable health devices (like smart watches), artificial intelligence for collecting and analyzing data, genetic testing and sequencing (CRISPR), and more technological innovations that have yet to be fully integrated into healthcare. What’s more, there’s a regulatory angle in play as well: the ACA incentivizes start-ups that can bring innovative solutions and technologies into the system.3 --------------------------------------------------------------- [Get More Insight with The Savvy Investor’s Guide]( Zacks Investment Management has innovated new financial technologies and now offers an actively managed robo advisor that: - Automates the advising process - Invests exclusively with ETFs - Uses technology to recommend the appropriate mix of equities and bond ETFs to help achieve your investing goal and specific risk tolerance. - Lowers fees and expenses [Learn More with Your Copy of The Savvy Investor’s Guide4]( --------------------------------------------------------------- In my view, it only adds to the opportunity that the United States is the most expensive healthcare system in the world, and according to the World Health Organization (WHO), perpetually ranked in the low 30s in terms of effectiveness. On a global level, the opportunity extends even further – the same report from the World Bank and WHO stated that at least half of the planet's population was unable to obtain essential health services. Can technology step-in to make healthcare services more effective, more accessible, and less expensive? Ways that Technology Can Address the Healthcare Problem Many readers who have dealt with health insurance companies and the medical world know that the healthcare system is a maze. One of the larger issues is that patients often move from doctor to doctor or hospital to hospital, but there is no clean system for collecting, analyzing, securing, and sharing patient data. If there is one area we think that technology can step-in and make better, it’s in the field of collecting and analyzing data. One such example in the works today is IBM Watson, which is partnering with the Cleveland Clinic to see how big data and cognitive computing can help providers make more accurate, targeted clinical decisions. When you think about it, today doctors often pore through medical journals or use experience to diagnose a problem or a medical treatment for it. With artificial intelligence, the endless amounts of available data can be used to support a physician and help him or her make better, faster decisions. According to both companies involved, “the day will come when our decisions are supported by data from wearables, imaging, implants, genetic profiling, along with insights from global help trends and published research.” Algorithms and A.I. can help make that possible. Other clinics across the country could also use IBM tools — the cloud as well as Watson cognitive computing technologies — to more efficiently analyze data from electronic health records, social determinants of health, and information from administrative claims. Big Data can also be used to tackle cancer research, genomics, predictive analytics and other precision medicine initiatives.5 Any progress on increasing efficiency almost always means lowering costs, in our view. Not to mention providing superior care. Another example of an innovator in the healthcare space is a company called Aledade. They are pioneering the use of software that can collect patient data from a variety of sources, so that a visit to the doctor means the physician can know right away which specialists a patient has visited, which tests have been ordered, and, critically, how much the patient’s overall care might be costing the health care system – and if it can be reduced. But the software applications can go further, in enhancing the benefits of preventative care and in removing some of the responsibility from the patient. To do this, Aledade’s software can use data to compile daily checklists for physicians’ practices, that can include simple reminders like calling a patient, ordering a vaccine, or scheduling an appointment to follow up on treatment a patient may have received from another care provider. The key is having data follow a patient through the medical system, so that treatment is more targeted and effective.6 Bottom Line for Investors In our view, most of the revolutionary advances in healthcare will come from digital platforms: data analytics, artificial intelligence, and data sharing. 7 If an investor looks closely into the healthcare space, he or she will find companies vying for leadership for each technological application. For investors, though, a big challenge still remains – That’s where Zacks Investment Management has innovated with new financial technologies and now offers an actively managed robo advisor that: - Automates the advising process - Invests exclusively with ETFs - Uses technology to recommend the appropriate mix of equities and bond ETFs to help achieve your investing goal and specific risk tolerance. - Lowers fees and expenses For further information, we recommend you read our report: The Savvy Investor’s Guide [Get your copy of The Savvy Investor’s Guide8]( © Zacks Investment Management | [Unsubscribe]( 1 CNBC, May 2, 2018, 2 CNBC, May 2, 2018, 3 CNBC, May 2, 2018, 4 Zacks Investment Management may amend or rescind the “Savvy Investor’s Guide” offer for any reason and at Zacks Investment Management’s discretion. 5 The Wall Street Journal, June 19, 2017, 6 The New York Times, August 16, 2017, 7 April 10, 2018, 8 Zacks Investment Management may amend or rescind the “Savvy Investor’s Guide” offer for any reason and at Zacks Investment Management’s discretion. 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