Healthcare: Thematic Analysis

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Healthcare demand is on the up, driven by global thematic themes such as a rise in chronic diseases, increasingly sedentary lifestyles and aging populations. As a result, the sector is predicted to grow with global healthcare expenditure forecasted to increase at an annual rate of 5.4% up to 2020, reaching over US $10 trillion according to Deloitte. 

DEMOGRHIC SHIFTS

The world’s population is continuing to rise, with the United Nations predicting a one billion increase by 2025 with 300 million being the age of 65 or older. The growing population is also seeing a shift towards the middle class, with developing economies driving growth. The Brookings Institute predicts that 65% of the global population by 2030 will be middle class.

The global population, due to increasing urbanisation and standards of living, are becoming increasingly sedentary. Consequently, this is driving the increase of chronic diseases such as diabetes and obesity, with active lifestyles proven to reduce the risks of developing these conditions. As demographics shift, the reliance on healthcare is rising with the population demanding an increasingly wide ranging and high quality medical services. 

CHRONIC DISEASES

As mentioned chronic diseases are on the rise, with the World Health Organisation predicting an increase of 57% by 2020 with the focus being on emerging markets, which are forecasted to account for 60% of this.

Further supporting the view that our lives are becoming more sedentary, almost 50% of chronic disease deaths globally resulted from cardiovascular diseases such as obesity and diabetes. These issues are of particular concern in developing countries with 79% of worldwide chronic disease inflected deaths having occurred here.The signs for the future do not look like shifting anytime soon, with chronic diseases predicted to account for 75% of global deaths by 2025.

However, most chronic diseases are preventable with behavioural factors such as diet and exercise key contributors to the solution. 

INVESTMENT THEMES

As such, these thematic themes are shifting the focus of the industry away from short-term cures and towards placing a greater emphasis on preventative medicine. The aim is to promote healthier lifestyles in order to decrease the reliance on healthcare systems.

There are two investment themes that stem from this - personalised medicine with the use of genetics research and the implementation of innovative technologies. 

GENETICS

With chronic diseases rising, the use of DNA is proving critical in developing new cures. A greater understanding of genetic sequencing is providing clearer links between genes and diseases, which will allow medicine to better personalise treatments for individual patients, based on their DNA.

This will also improve the efficiency of preventative medicine via identification of patients with a higher genetic risk of developing certain chronic illnesses. Therefore, it will provide both a responsive cure and a proactive solution. 

TECHNOLOGY

Technology is already causing a shift in how we think about health and wellbeing, with the use of wearable technology such as Jawbone and FitBit providing data analysis on how active we currently are. By providing transparency on our current sedentary lifestyle, this should result in a reaction to overcome these issues as users are not only more aware of inactivity but
also have a greater understanding of how to manage their daily habits in order to combat against it.

Additionally, technology can be implemented to improve the healthcare system’s efficiency to reduce the burden caused by the global trends mentioned. FTSE AIM stock Craneware Plc for example is using data analysis in order to optimise operational efficiency in the US healthcare market. The company focuses on internal improvements such as standardise process models and value cycle solutions in order to improve operational efficiency.

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