By Chat Reynders
In this election year, the enormous strain on our healthcare system promises to play center stage in the national conversation. The social implications are tremendous: Reliable healthcare is at risk as the generational tsunami of baby boomers enters the senior years, drug prices skyrocket and Emergency Rooms struggle with capacity. These are daunting trends that lead many investors today to worry that there is no clear path for a better system.
Moving forward, expensive drugs may continue to face headwinds, slower global growth may challenge the earnings of multinationals, and budgets could be tight for technology purchases. But there are encouraging stories of innovations in the healthcare landscape that bring great opportunity for investors to do well and do good.
My firm, Reynders, McVeigh Capital Management, contends that investments supporting access to low-cost, high-quality medication will continue to disrupt the industry. The stage is set for critical advances in areas such as genomics, preventive self-care and modifying the system to the match the preferences of patients.
The new leaders in the space could alleviate the current stress on the system, enabling better interaction among patients, providers, payers and just about everyone. Here’s how.
The demand for medical expediency has given way to walk-in clinics, led primarily but not exclusively by CVS “Minute Clinics” that offer a new alternative to ERs while delivering more immediate and convenient access to care.
For investors focused on the long game, millennials as a generation are especially embracing this trend. Consider that millennials prefer retail and acute care clinics twice as much as boomers and seniors. As the number of walk-in clinics increase, ER visits will decline in tandem with the trend of delayed care among the younger generations – an alarming tendency, but mendable.
The consumerization of healthcare has led to a more informed and empowered healthcare marketplace with a public that has done their homework and demands generic versions of drugs to keep their expenses under control.
Greater competition among these companies will flourish, helping to keep costs lower for patients while increasing their savings. In 2014 alone, the generic drug market saved the U.S.
Technology and the dawn of “self-care”
The implementation of new technology and the advent of the “self-care” movement have enabled the public to monitor and contain chronic conditions, reduce flare-ups and hospital visits, and ultimately provide people with greater control of their daily health.
In fact, the global market for selected health-monitoring technologies is expected to reach $18.8 billion by 2019. From wearable technology to consumer-friendly testing solutions, the general public is taking ownership of its healthcare – putting less strain on doctors and paying fewer healthcare expenses along the way.
In the final analysis
Improvements in preventive care are an imperative of the evolving global health culture. The population is both increasing and aging, creating a significant need for programs and products that allow patients to proactively manage their health. Companies poised to capitalize on this disruption will bring a new frontier of medicine to communities; and investors should keep a keen eye on these advances.
For more information on the changing face of health care, check out the infographic below (click to enlarge):
Image credit: Pixabay
Infographic courtesy of Reynders, McVeigh Capital Management
Chat Reynders, Chairman and Chief Executive Officer of Reynders, McVeigh Capital Management LLC., has more than 25 years of experience in investment management and social venture investing. He has structured and funded public/private partnerships that have brought more than $150 million in revenues to leading cultural institutions. He has for decades produced socially oriented IMAX films, including the Oscar-nominated Dolphins and Coral Reef Adventure.