Healthcare

Everyone will of course at some point need health care. This was known well before the pandemic. The deficit from health costs related to the pandemic is now expected to be £394bn (insituteforgovernment.org.uk- The cost of coronavirus).

And as tragic as this is, it has led to global digital healthcare investment to hit record levels over the last year with 2020 having £15 billion investment, which is an increase from the £10 billion in 2019. The UK digital health market was valued at £2.4 billion in 2017 with the early adoption of telecare services, large central government programmes and a strong existing base of hardware – as well as increasing prevalence of smartphones and apps – and is forecasted to reach approximately £20 billion by 2025 (Digitalhealth.london – Investing in the digital health sector).

Whenever there is a huge need for something, it strikes an opportunity for investors. The healthcare sector caught the attention of investors across the world when some of these manufacturers received regulatory approval for drugs to treat COVID-19 and began distributing vaccines, while others are rushing to develop and win approval for brand new COVID-19 drugs. There are also companies involved in various other ways, such as supplying products to test for and manage treatments of the virus (Nathan Reiff, Investopedia, 23/06/2021).

As behaviour shifts to digital platforms, the demand for healthcare innovation is likely to expand. This poses an opportunity to investors, here are three segments of health expenditures and their reported potential to be virtualised:

  • Urgent care visits: 34%
  • Office visits: 24%
  • Home health visits: 20%
  • One estimate suggests that 20% of all healthcare spending in the U.S. could be conducted virtually, worth $250 billion (Mckinsey 29/05/2021).

Healthcare, by its very nature, is very highly regulated and investing in any kind of stock, for that matter comes with risks. Including the possibility that competitors will develop products and services that are more successful in the marketplace. This is particularly so in the healthcare market, where stocks face these risks, as well as others more specific to the sector. We would therefore recommend seeking professional advice before actioning anything. 

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DISCLAIMER: This article is for general information and is not intended to address your particular requirements. No individual or company should act upon such information without receiving appropriate professional advice.