The Rise of High-Tech Healthcare: 5 Trends to Watch

THE SILICON CHIP AND THE STETHOSCOPE have long gone hand in hand. Indeed, Moore’s Law, a widely used forecast of rising computing power, can often seem to be nudging healthcare into the realm of science fiction, with life-saving high-tech innovations coming at a rapid rate today — and plenty more in the pipeline. That is surely good news for investors, and not only those with a medical focus.

“The potential for growth extends beyond the traditional healthcare sector,” says Sarbjit Nahal, head of Thematic Investing at BofA Merrill Lynch Global Research. With the provision that rising chip speeds can render a promising technology obsolete all too quickly (DVD, say hello to cloud streaming), here are the top five innovations Nahal and fellow “futurologist” Joseph Quinlan, head of Market & Thematic Strategy at U.S. Trust, think may offer investment opportunities in the years ahead.

1. Genomics: Getting to know your DNA

Genetic researchers essentially revolutionized modern medicine in 2000 when they produced the first full draft of the human genome, or the “coding” instructions for life. At the time, a personalized DNA test would’ve cost about $100 million — today the price tag is a mere $1,000 or less.¹ As a result, “many more people can now afford to discover if they have certain inherited diseases,” Nahal says. “It gives them the option of getting appropriate treatment even before they show symptoms.”

Decoding, however, was only the beginning. “In recent trials, gene therapies have shown great promise for curing inherited disorders such as hemophilia,” Quinlan says. “And advanced gene editing, also in trials on humans, could aid in fighting cancer and other diseases by altering genetic instructions at the cellular level.” A new system — clustered regularly interspaced short palindromic repeats, or CRISPR — based on an ancient virus-killing defense mechanism found in many bacteria, he says, “reportedly provides more accuracy, efficiency and flexibility than earlier gene-editing techniques.”

Opportunity: The global genomics market is estimated to grow from about $11 billion in 2013 to $22 billion in 2020.²

2. Robotic surgery: The droid will see you now

A robot spreading your ribs before a heart valve replacement? Sounds like a nightmare scenario, perhaps — picture a Terminator in hospital scrubs. But, in fact, robot assisted surgery, or RAS, can offer a range of benefits. Compared with a human surgeon, “a RAS system typically is faster and smoother, making more precise incisions and reducing blood loss,” Nahal says. Critics say these surgical “droids” are too expensive — a million dollars or more — yet their accuracy alone may lead to cost benefits in reduced surgeon hours and shorter hospital stays. What’s more, says Quinlan, “as AI (Artificial Intelligence) is implemented more broadly, systems that can learn stand to make RAS faster, cheaper and more accurate, leading to even wider use.”

Opportunity: Annual sales of robotic surgical assistants are estimated to rise from about $3 billion to $20 billion within five years.³

3. Cyborg RN: Carebots and prosthetics

A close relative of RAS is the rehabilitation robot, or “carebot,” which can assist the elderly at home by dispensing medication or helping with bed access. Says Nahal: “Carebots are predominantly being used in Japan, but we think the U.S. market could grow significantly, particularly in light of the aging of America and an anticipated shortfall of healthcare workers.”

Another robo-market is in replacement limbs. “Research in computerized prosthetics has accelerated, prompted in part by injuries suffered by U.S. troops,” says Quinlan. The future looks even more encouraging: The U.S. Defense Advanced Research Projects Agency, or DARPA, reported in 2015 that it had built a robot arm that could be controlled by a human brain and a hand that could give a sensation of touch.

Opportunity: Sales of personal robots could reach $17 billion by 2020.⁵

4. Telehealth: The doctor makes video calls

Technology may extend the waiting room to the living room. Indeed, healthcare professionals are becoming more likely to consult with patients via telephone or video chat, with the ability to offer remote diagnosis, prescription verification and drug administration oversight. “Hospitals may use remote monitoring, with biosensors and so forth, to reduce admissions, especially among the elderly,” Nahal says. “Telemedicine may also be a key to promoting health in rural areas in the U.S. and in emerging markets.”

On the educational side, video technology used during surgical procedures may, Quinlan says, “be an effective learning tool by allowing students nearby or around the world to observe top surgeons in action.”

Opportunity: Telemedicine/health could be a $34 billion market by 2020.

5. VR/AR: What is reality anyway?

Virtual and augmented, or “mixed,” reality — a video gamer’s paradise, to be sure — is under development for use during surgical procedures. Wearing high-tech AR goggles, a surgeon might “see through” a patient’s spine, say, by layering existing CAT scans over real bone, enabling greater surgical precision. Even before scrubbing up, “a surgeon may use a headset or tablet computer to engage in risk-free VR simulations to practice procedures, especially ones that are uncommon or particularly complicated,” Nahal says.

Opportunity: Healthcare focused VR/AR platforms could become a $5 billion market by 2025.¹⁰

Tech and healthcare: Also showing strong vital signs

Beyond these top five, Quinlan and Nahal see potential in an array of other healthcare-related technologies currently in development. Here are a few:

• Contact lenses that measure glucose levels in diabetics.
• Spoons with accelerometers that adjust for the shaking common patients with Parkinson’s.
• Nano pills that travel through the body and identify cancer cells or signs of an imminent heart attack.
• Multifunctional radiology that scans the body and detects a range of medical problems all at once —not unlike the “tricorder” used in the Star Trek franchise.
• Smartphone apps that collect a range of health data and send it to healthcare providers.
• 3D-printed replacement body parts such as organs, bones, tendons and more.