Apart from Covid-19, what are the other issues that will reshape the health sector?
The main drivers of the sector remain unchanged: the demand for health services is accelerating as the population lives longer and longer. Governments around the world are facing budgetary pressures due to the growing demand for health services, so that increasing the efficiency of health systems is no longer an option, but a necessity.
The technology – new discoveries in disease biology and new treatment modalities – is creating a huge wave of new treatments that can dramatically improve patients’ health. Equally promising is the use of information technology to make the supply of health care more efficient and improve its quality.
What is the impact of technology on the healthcare sector?
This sector is about to experience major upheavals in terms of knowledge and technology. The evolution of medical sciences in recent years has greatly advanced knowledge about the biology of diseases, leading to the steady development of new innovative drugs and associated diagnostics.
Medical technologies are contributing to new therapeutic instruments that impact certain complex diseases, reducing the devastating effects of stroke. Digital health is already making the supply of healthcare more efficient and helping to improve the state of health of patients. It will democratize the management of health care and wellness, providing individuals with the tools and data necessary to take greater responsibility for their personal health.
While these changes have been in the works for some time now, we are now reaching a positive inflection point where we will start to see real innovation and progress across the industry. This trend will boost the performance of companies at the forefront of innovation. This phenomenon is manifested by a number of new and innovative drugs in fields such as oncology and gene therapy which are about to be commercialized. At the same time, the Covid-19 pandemic has accelerated the adoption of telehealth and digital services.
What are currently the most interesting segments in the healthcare sector?
The segments most affected by Covid-19, namely hospitals, healthcare providers and general public health (for example, hearing aids), are experiencing a resumption of surgeries and patient volumes which is helping to boost the performance and this trend should continue until next year. The accelerated increase in the production of Covid-19 vaccines and the growing awareness of the sustainability of vaccinations mean that there is still growth potential for companies involved in the production supply chain.
Although segments such as biotechnology and medical technology have performed well, opportunities remain in the medium term. A constant stream of promising new biotech companies exists in different regions, which are expected to benefit from the success of major phases of clinical trials or as acquisition targets by larger companies seeking new products.
The lockdown period has highlighted the benefits of telehealth and digital health services. This leads to the development of new tools to better manage chronic diseases such as diabetes using remote monitoring devices or behavioral health products based on artificial intelligence in order to improve patient care. . This trend is still relatively early in its adoption and therefore remains a source of growth in the medium to long term.
Are there any factors that are likely to hold back growth in the future?
The budget issue will become even more acute for governments, given the amounts borrowed this year. I think this creates additional impetus for better management of resources. This necessitates new thinking and the adoption of technologies that benefit patients, but it will also benefit health systems in terms of costs.
Government policy in the health sector, in particular with regard to pricing, regularly generates a lot of ink, especially during electoral cycles. In fact, most governments need to integrate private health services to expand and support the different levels of benefits offered by the public system. This means that they must create an enabling environment for these businesses.
What about sustainability?
There are three factors that we believe are likely to make health an area of sustainable growth for many years to come. The first is the demographic situation. The increase in the number of elderly people in the world is leading to an acceleration in the demand for health services. In the United States, for example, the oldest members of the baby boomer generation are approaching 75 years of age, the age associated with peak use of services such as hip prosthesis, hearing aids and other health-related disorders. aging.
The second factor is efficiency. The financial burden on national budgets and the health insurance offered by the employer create the necessary force for change. In the United States for example, between 30% and 40% of health care spending is deemed to be wasted, creating a huge opportunity to improve efficiency.
The third key factor is technology. A constant stream of new disruptive technologies in drug and technology / data development brings new approaches to disease management. These improve the health of patients in a more cost-effective manner.
The Covid-19 crisis has highlighted the importance of these technologies. However, the accelerated pace of developments in the health sector is today the most compelling reason for investors to take an interest in the sector.