Capital Ideas^TM

A misaligned delivery model and lack of cure for major diseases are two of the biggest issues plaguing modern health care today.

Most doctors operate in a traditional fee-for-service model, getting paid based on volume. But the more patients they see, the more it reduces the time they can spend on every patient. This could potentially lead to a higher chance of misdiagnosis, mistakes and the tendency to only treat immediate illness or symptoms.

Many diseases come with significant health costs but the strain they place on economies can also be huge. In the US alone, 90% of the nation's US$4.3¹  trillion annual health care expenditures are for people with chronic² and mental health conditions.

However, the emergence of value-based systems and advancements in data analytics and artificial intelligence (AI) could just be what the doctor ordered

In this paper, investment director Matt Reynolds outlines some of the key investment opportunities that are being unlocked by technological breakthroughs across a patient’s journey.

With global health care spending expected to reach US$10.6 trillion in 2030³ (from US$9 trillion in 2022), the amount of resources that could be freed up, if a solution to the sector’s longstanding issues can be found, is potentially staggering. Similarly, the financial benefits could also be huge for companies that are able to conjure innovative solutions to these structural issues.

1. Data as at 15 December 2021. Source: National Health Expenditure Data: Historical. Center for Medicare & Medicaid Services
2. Referring to conditions that last more than a year and require ongoing medical attention
3. Data as at 20 October 2022. Source: Global Health Data Exchange (GHDx)