Upheaving health care
As incomes grow and lifestyles change in the developing world, populations in mature economies are ageing and health-care services are being pressured by severe budgetary constraints. At the same time, an increase in out-of-pocket health-care spending is fuelling the growing consumerisation of health care. As a result, the health-care sector must adapt to meet the changing needs of the world, which presents opportunities and pitfalls for investors.
What matters most?
To help focus our analysis of health-care trends, we focus on the growing wellness industry, renewed efforts in preventative health care, the demands of ageing populations, the increasing accessibility of health-care services and a growing focus on personalisation in the medical sector, though we remain conscious of other forces in health care too.
The increasing adoption of Western-style diets globally and a recognition of the role of diet in disease also point to potential changes in patterns of chronic disease, food consumption and government policies.
Data and disease
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- In terms of opportunities, digitalisation and technology are changing the face of health care for everyone. Data is king, so companies that can offer real value to medical providers may be poised to grow. We also see opportunities in robotics, biotechnology and a renewed focus on vaccinations and fitness as preventative care.
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However, there are also risks. As data comes to underpin health-care decisions, this leaves companies in this space open to catastrophic data breaches. Cybersecurity will be key – but it comes at a price. Regulation and litigation will also continue to be key considerations for firms, among other concerns.
We believe that by considering the world’s myriad companies through the core trends in our healthy demand theme, we can identify exciting new investment opportunities and avoid costly risks.
Transcript
Meet the team
We have a research group for each theme, made up of analysts, portfolio managers and other members of the investment team, that collaborate on new thematic ideas and analysis. Here are the co-leaders in the healthy demand theme group.
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Simon Nichols
Portfolio manager, UK equities
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Emily Heaven
Global analyst, health care
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Paul Markham
Portfolio manager, global equities
Our key areas of focus
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Wellness
- Healthier choices drive a greater consumerisation of health care. Wellbeing and over-the-counter brands benefit from the repositioning of patients as consumers, while the app economy is likely to expand both awareness and greater consumer choice.
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Prevention
- Prevention entails earlier detection and intervention, reducing disease burden, and delivers better health-care outcomes for patients and payers. Active monitoring of chronic conditions leads to improved management and lowers overall treatment costs.
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Living longer
- In an ageing society, the greater health demands of the older population reflect the chronic diseases of the elderly. Long-term care moves into the home environment. There are opportunities to extend and improve quality of life. Better health also drives demand for leisure and travel.
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Access
- Increasing demand and greater access to better value solutions expands the use of health care around the world. The adoption of Western-style diets changes health-care requirements in many emerging markets, while electronic health (eHealth) opportunities democratise access, and improve the speed of treatment.
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Personalisation
- Health care becomes very personal as patient data unlocks value. Genomic health and DNA sequencing transform treatment options and increases awareness. Targeted therapies improve outcomes, particularly in cancer. The personalisation of health data also increases demand for security and regulation.
A deep dive into…
Wellness and the consumer
From jade rollers and gluten-free everything to Fitbits and juice cleanses, taking care of your health and wellbeing has become the purview of the individual, and we are now more aware than ever of our own health.
Of course, our themes don’t exist in a vacuum
The investment implications of ageing populations bridge our healthy demand and population dynamics themes perfectly. How else will demographic shifts affect the investment landscape?
Technology is changing the face of every industry on the planet, including health care. Our smart revolution theme considers the impact of the technological revolution in more detail.