The Hype on US Healthcare - five trends that will affect us all

The US healthcare industry is expanding and accelerating. According to Centers for Medicare and Medicaid Services (CMS), US national healthcare expenditure reached US$4.1 trillion – or US$12,530 per person – in 2020. Said another way, that makes up a fifth (19.7%) of the country’s Gross Domestic Product (GDP) today compared with 5% of the GDP back in 1960.

And there is no sign of the growth slowing down, with Deloitte predicting that, if we stay on the current trajectory, we will triple to nearly US$12 trillion by 2040, or 26% of GDP. That’s a T, not a B and equates to America’s annual spend on Healthcare to be nearly 3X Russia’s entire economy. Or, if Deloitte has its spreadsheets straight, you could buy every person in Fort Lauderdale, Florida (population 181,000), a top-of-the-range GulfStream private jet at US$64m a pop – and have plenty of change for the mini-bar.

As we know from business, one person’s expenses are another person’s TAM (total addressable market opportunity), so expect investments in the sector to match the size of the prize in the race for market share of the health-purse.

As brands wrestle it out, healthcare will continue to be a hotbed for innovation, technological and scientific breakthroughs – as well as a proliferation of new solutions and services. Much of the investment will continue to be invested into pharmaceuticals and scientific research, but the desire to cure and manage the myriad of illnesses and conditions also remains. It’s clear to see with the tech and digital advancement over the past decade, how new ideas can transform healthcare.

Let’s take a look at the levers driving investment and spending…

InsurTech

The InsurTech sector attracted a record US$19.8bn worth of investments during 2021, a 176% increase over 2020. The fascinating point here is that early-stage startups alone received US$4.3bn in funding in Q4 2021 – which points to a developing market that in itself is in its early stages.

For those unfamiliar with what InsureTech means, the term refers to tech innovations designed to squeeze out savings and efficiency from the current insurance industry model – particularly around health insurance. Solutions include ultra-customized policies, social insurance, and using new streams of data from internet-enabled devices to dynamically price premiums according to observed behavior.

It also refers to new, user-experience driven, tech-savvy insurance brands which operate purely in the digital space and aim to offer customers a seamless, “paperless” experience.

Designed to be more nimble than their predecessors and more traditional rivals (let’s face it, insurance is one of the oldest financial businesses there are), these brands challenge the sector’s ‘tried and tested’ methods, such as lumping policy seekers together in different risk categories, and instead come up with game-changing ways to ensure that, overall, policies are profitable for the company. These new methods include using deep learning-trained AI and data created by the Internet of Things (from GPS tracking to smartwatches and fitness trackers) to replace individual brokers and their experience and “gut instincts”.

However, as with many developing markets, questions remain. According to a Quarter InsurTech Briefing from Willes Towers Watson, more than 450 InsurTechs have failed over the past decade. While private market investors continue to pour capital into InsurTech startups, those going public have seen their value fall thus throwing shade on whether InsurTech can deliver on its promises.

Femtech

With a little over half of the world’s population affiliating ‘female’ – coupled with the gross misunderstanding of women’s health and all the cycles that constitute being female (the female body long being misunderstood and under-researched) – the terrain is ripe for the rapid emergence of the female-facing category of tech and digital solutions and services across the health, fitness and wellness sectors.

In short, Femtech is any product, piece of tech, app, diagnostics platform or software solution using technology exclusively to support, improve or chart women’s health. From period health and fertility-tracking to medical apps and mental-health focused apps, FemTech Focus – the first Femtech agency – has a database of 657 active women’s health companies globally…a figure that is growing at about 20 per month.

Like InsurTech, Femtech is a rapidly growing area. According to Medi-Tech Insights, the global Femtech market was valued at US$22 billion in 2020 and is set to witness a healthy growth rate of 15% in the next 5 years. Some estimates (analysts Frost & Sullivan) project that the sector could grow to US$50 billion by 2025. Therefore, as a growth market, Femtech isn’t one just for the investors – for those looking for their next opportunity, there are a number of brands who are keen to bring on board talent with fresh ideas and skills to help expand and capitalize on the possibilities.

Personalization of care

Offering people choice and control over the way their care is planned and delivered used to be unheard of in healthcare – especially in public health services. The power sat with the system of doctors and health professionals who told patients what would happen next, followed by the where and when. There was very little wriggle room left for “how” and “why.”

That is changing. Personalized care is on the rise, representing a new relationship between people, professionals and the health and care system. Understandably, private healthcare operators and service providers have pioneered steps in this direction but change is also afoot in public health services as well. While there has been positive personalized movement in Europe for a while, the intentions from the UK’s infamous NHS make a statement. A healthcare behemoth with an annual budget of US$170bn is placing “personalized care” as one of the five major, practical changes to the NHS planned to unfold over the next five years as outlined recently in the Long Term Plan. Working closely with partners, the NHS will roll out personalized care to reach 2.5 million people by 2023/24 and then aims to double that again within a decade.

As well as its growth potential, what makes personalized care one of our top trends is its whole-system approach, integrating services around the person including health, social care, public health and wider services. This offers huge opportunities as the broader ecosystem accumulates new products, services and innovations – and the brands offering them. Definitely a space to keep a pulse on.

Artificial Intelligence

The use of AI – in combination with healthcare data – is another transformative trend which will revolutionize aspects of healthcare. As well as assisting doctors, nurses, and other healthcare workers in their daily work, AI can enhance preventive care and quality of life, produce more accurate diagnoses and treatment plans, and lead to better patient outcomes overall. It can also be used to predict and track the spread of infectious diseases, playing a crucial role in global public health as a tool for combating epidemics and pandemics.

There are already a number of research studies suggesting that AI can perform as well as or better than humans at key healthcare tasks, such as diagnosing disease. This is partly down to its capability to bring together, analyze and make decisions based on huge amounts of data from every aspect of healthcare.

WIth some analysts predicting that the global AI in healthcare market size will grow from just under $5bn in 2020 to $45.2bn by 2026. There's no doubt that AI is here to stay.

However, the jury is still out on what the next few years hold for AI adoption. Although AI can meet or outperform healthcare humans in many tasks, implementation factors will prevent large-scale automation of professional jobs – for now, at least. There are also ethical issues to consider in the way (and when) AI is applied, hence the hesitation.

Mental Health

Mental health – and the availability of treatments for those who need them – has gone from being a taboo topic to becoming an open, honest, global discussion over the past two decades and more pronounced during the pandemic with compounding pressures initiating a societal reset. While there is still much to do to ensure parity between mental and physical healthcare, the two have started to gain a more equal footing in the health and social care landscape.

Encouragingly, the change is coming from all angles. At the “grassroots”, people are increasingly using social media platforms to share their own mental health battles, which is encouraging for others to open up amidst support and encouragement from their peers. Meanwhile – from the top down – the U.S. Surgeon General, Vivek Murthy, has highlighted the growing mental health crisis. Making mental health issues an openly discussed topic can have an empowering effect on those who suffer from them.

Tech has also taken a front seat by offering mental health apps and other wellbeing solutions to help people assess and monitor their mental health, while also providing accessible alternatives to traditional therapy.

The acceptance of mental health as a crucial aspect of overall wellbeing is also being backed by investors. According to Pitchbook, venture capitalists poured nearly US$6.9bn into US-based mental and behavioral health companies in 2021 – almost threefold what the category collected in 2019.

With these five rivers running deep and fast under our healthcare system, expect a very different offering and set of brands serving us in five years.

If you are passionate about contributing to this essential industry, as money and opportunity continues to pour into the sector, reach out to chat with a Good Soul: hello@goodsoulhunting.com

IMAGE: RAEng_Publications from Pixabay