The challenges for global healthcare systems
As if healthcare systems around the world were not under huge pressure already, the Coronavirus pandemic has stretched healthcare systems to, and in cases, beyond their limit. Many systems have been forced to cancel routine operations and postpone in person appointments and diagnostic tests.
In the United Kingdom, which has the highest vaccination rate amongst large countries, the British Medical Association (BMA) estimates in the UK between April 2020 and March 2021 there were:
• 3.37 million fewer elective procedures; and
• 21.4 million fewer outpatient attendances.
According to the BMA there has been a 35-fold increase in the number of people waiting more than 12 months for treatment. With a record waiting list of 5.12 million in April, the BMA says the UK National Health Service will struggle to “balance pent-up demand for treatment with the reality of a virus that is here to stay”.
The situation is similar in many different national healthcare systems. In the economically advanced West, systems will be put under further pressure by an increasing ageing population, supported financially by an increasingly smaller working age population. The number of Americans over 65 is expected to be 80 million, or 1-in-5 of the population by 2040—up from 40 million, or 1-in-8 of the population in 2000. In Western Europe the situation is worse. Almost a quarter of Western Europe’ population is already over 60. In Italy it is over 30% and projected to be more than 40% by 2050. Continued development and availability of life saving and life extending drugs and treatments exacerbates this trend and will mean that difficult choices will need to be made by healthcare systems with finite resources.
MedTech to the rescue
Healthcare systems need to work out how to provide more and better care at lower cost. The continued advances in technology alongside increasing demand for innovation mean that investment in MedTech has become more and more attractive. Two key MedTech sub-sectors that are attracting investment are remote diagnostics and patient monitoring:
Remote diagnostics: As a result of the development of new technologies such as wearables, sensor technology and big data management will help identify when action is needed and via remote consulting, enable real-time consultancy and intervention. The growth of big data can help link genetic profiles to specific diseases or predict how patients will react to a drug. Shifting the focus to prevention and asymptomatic disease identification will allow early intervention and lower costs.
Patient Monitoring and disease management: One of the largest healthcare costs is associated with recurrences and hospitalisations as a result of poor patient monitoring after initial treatment. Improved real time monitoring of life functions and responsiveness to drug use as well as behavioural advice can play a critical role in reducing recurrences and hospitalisations for chronic illnesses.
Covid-driven innovation
Winston Churchill famously said: “Never let a good crisis go to waste”. The pandemic has forced healthcare systems, like all services providers, to re-think how to deliver services in an effective, manageable way. Remote doctor appointments, unthinkable a year ago, are now not only the norm, but provide convenience and huge efficiencies. Indeed, the older members of the population through isolation, have become lead adopters of technology. For working age patients, it avoids the loss of income in taking time off work to attend routine appointments.
The Covid pandemic has also seen an explosion in home testing, with even children routinely carrying out their own lateral flow tests. At the same time the population has become used to working with medical provider apps. This “crisis-led” behavioural change in the population has resulted in a patient population much more willing and likely to consider innovative solutions and accept new technology directed at other illnesses. The Covid pandemic has, although delayed adoption and approval of some new medical technology and devices through its focus on fighting Covid, led to an acceleration in innovation in systems that will inevitably accelerate the Medtech revolution in the medium term.
Risk factors
Investors attracted to MedTech should bear in mind that healthcare is a highly regulated market and a number of legal, regulatory and commercial factors should be considered before investing, including the following
1. Data protection and privacy: In the EU, UK and other jurisdictions, companies will need to comply with obligations under GDPR and other national regulations including consents, security measures and restrictions on use, transfer and storage of data.
2. Medical device regulation: If a digital health device has a medical purpose it will likely require registration and approval.
3. Intellectual property: Patent and other IP issues will need to be considered.
4. Market access and re-imbursement: Although the EU is a single market each country has different criteria for approving purchase of devices and technology. The UK’s National Institute for Health and Care Excellence (NICE) has produced guidance addressing effectiveness and economic standards.
