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May 25, 2022 | GSAM Connect

Health Care at an Inflection Point

December 8, 2020 marked the beginning of the largest global vaccination campaign ever undertaken. Governments, public health organizations and corporations worked together to rapidly develop the first suite of vaccines against COVID-19 and deploy them simultaneously in every country on earth.

That such a massive undertaking was even possible is a direct result of two things: unprecedented health care innovation and the government support that has enabled it.

We are now at a critical inflection point. Rapidly accelerating innovation is doing more than delivering vaccines in record time. It is reshaping the entire health care industry. Over the last few decades, cost curves have declined dramatically and groundbreaking new treatments have become commercially scalable, prompting the industry to change how it treats patients by shifting the focus from reactive to preventive medicine.

This creates attractive opportunities for investors in four key areas of health care innovation: genomics, precision medicine, tech-enabled procedures and digital health care. What follows is a closer look at each of these areas of innovation.

Genomics: Mapping Our Genetic Makeup

When the first human genome was sequenced in 1999, the process took roughly four years and cost an estimated $0.5 billion. Today, it costs around $6001 and can be completed in as little as one day2. Genomics—the science of reading, analyzing and editing genomes—has seen rapid expansion and development since its early days. This creates an opportunity to expand our knowledge about new treatments and cures.

Genomics has revolutionized the collection and analysis of health data to plan and evaluate public health responses to infectious diseases. Recent advances in genomic sequencing technology, for example, have enabled scientists to identify and track the spread of COVID-19 variants in 85 countries3. Armed with genomic data, scientists are also able to identify populations that may be at high risk of conditions linked particular genes. This paves the way for healthcare providers to move from a reactive approach to a focus on preventative care.

Precision Medicine: An Antidote to One-Size-Fits All Drugs

At the convergence of data science and lab science lies precision medicine, the development of personalized treatments and therapies based on a patient’s genetic makeup or other molecular or cellular analysis. Precision medicine can expand the horizon of available therapies for patients, such as targeted oncology and gene and cell therapy. This has important implications for the treatment of rare diseases, which afflict roughly 30 million people in the United States alone4.

Tech Enabled Procedures: Less Invasive, More Effective

Technology is empowering surgeons to tackle ever-more complex health challenges before and during operations. Robotic surgery, a $6 billion industry, is refining the execution of existing minimally invasive procedures. Patients benefit from smaller, more uniform incisions that result in less blood loss, lower risk of infection, less pain, and minimized scarring. A new minimally invasive method to replace a key heart valve, for example, allows patients to leave hospital the day after the surgery, with shorter overall healing time and improved outcomes compared to traditional open-heart surgery.

Digital Health Care: The Internet of (Medical) Things

Technology is playing a key role in helping healthcare systems provide efficient care to an aging population at the lowest possible cost. Some 60% of health care organizations have already connected to the growing Internet of Medical Things (IoMT), the digital health care ecosystem through which devices can communicate with one another.

On a broader level, the IoMT was also used to aid the public health response to COVID-19. While barriers remain, including privacy and security concerns, using digital technologies to anticipate and respond to public health crises is well underway, and we expect innovation to continue.

Disruption is Only Just Beginning

The disruptive effects of technological innovation can be seen across all facets of our lives, and the implications for health care are significant. It means better outcomes for patients and society and lower costs—and, in our view, investors have an important part to play in the process.

 

We invite you to download the full publication to learn more.

 

Stay posted on the latest market developments and key investment implications.

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