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The Heart of Healthcare:
Changes to the Healthcare Sector and Upcoming Trends
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Over the last 18 months, the world has faced the greatest healthcare challenge of a generation. As we approach the final months of 2021, COVID-19 refuses to fade. On top of this, many healthcare systems are experiencing added challenges of growing waiting lists, postponed appointments, canceled operations and a delay in patients coming forward for treatment. There is no doubt that this will likely result in significant hidden healthcare costs in the longer term.
That said, the outlook going forward is more positive as the slight decline in healthcare spending in 2020 (Deloitte, 2020) has bounced back as governments and private providers are increasingly willing - and need - to invest heavily in healthcare provision, vaccine research and treatment in order to not only properly control the pandemic but boost their healthcare sectors.
Looking ahead, global healthcare spending is expected to steadily increase at a 3.9% compound annual growth rate (CAGR) (Deloitte, 2020), with relatively higher growth rates in Asia and Australasia, as well as in transitioning, rapidly developing economies in Central and Eastern Europe. Healthcare spending as a share of GDP is also expected to rise globally.
Drivers for the health sector include the usual suspects of population aging, clinical and technological advances and increasing demand for medical care. As global economies gradually recover from the adverse impacts of COVID-19, spending on healthcare provision is also expected to increase accordingly.
While COVID-19 has confirmed our vulnerability to communicable diseases, noncommunicable diseases (NCDs) such as heart disease and cancer have also continued to become more prevalent, especially given NCDs’ increasing morbidity rates. Hence, spending and investments on both pandemic-related research and these long-term conditions will continue to be crucial in furthering progress in medical technology and treatment.
In this newsletter, we explore three important trends in further detail: Care Model Innovation, Digital Innovation and a Renewed Focus on Health and Medical Research. Please read on below to find out more.
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Listen to Oxford University's Leadership in Extraordinary Times broadcast from 23 March 2021, focussing on Revolutionising healthcare innovation: Putting communities first
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1. Care Model Innovation
Consumers increasingly expect personalised care delivery, including home visits and customised interactions. Amidst COVID-19, transitioning to virtual platforms has also been essential for more convenient diagnosis, intervention and monitoring. For example, the whole of UK General Practise moved to an online or telephone based triage virtually overnight. Mergers and acquisitions of healthcare providers have also been more common as larger providers attempt to consolidate their market share by absorbing local boutique organizations and potentially adopting public-private partnerships to better serve their patients. Finally, giants in other industries are increasingly keen on entering the health and medical sector to expand their business operations - targeting pharmaceutical delivery and focusing on remote monitoring have aided these emerging disruptors in the market.
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2. Digital Transformation
Data interoperability is essential to widening access to medical information and facilitating the exchange of technologies. COVID-19 has actually accelerated the breaking down of regulatory mechanisms which govern the transference of information, allowing professionals to better use analytics to improve care delivery and generate more insightful research. Moreover, such digitalization of healthcare processes also helps provide a higher return on investment (ROI), through reducing administrative costs, increasing efficiency, reducing general costs and increasing revenue and growth.
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3. Renewed Focus on Health and Medical Research
Individuals and Governments are becoming increasingly aware of the importance of health objectives and the necessity of ensuring general population health. Health care organisations are also better able to capitalise on this and push for reskilling and upskilling programmes. Upgrading the skills and capabilities of the workforce, including providing innovative training and tools, is crucial to mitigating another such global health crisis. Rapid advances in automation of clinical and health processes, care virtualization and genomics have also led to significant developments across the sector. Understanding that human and machine intelligence can be complementary in nature will transform the industry in the long run.
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Challenge Investing
Within our universe, we have a significant number of companies that are helping to profitably address the significant and vitally important global challenge of health. If you’d like to invest in some of the most promising growth companies based on top research then please don't hesitate to get in touch.
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