Healthcare Trends: Tech as The Next Investment Wave

The health care industry is undergoing a major transformation, driven by rising costs, technological advances, and shifting consumer expectations. The traditional “sick care” model is giving way to the 4P model—predictive, preventive, personalized, and participatory care. New care delivery models are enabling more personalized and accessible healthcare experiences by integrating digital solutions, data analytics, and streamlined administrative processes. This shift is supported by care teams and care coordination, which are essential for delivering value-based care and ensuring patients receive timely, coordinated interventions.

One of the biggest drivers of change is cost. The U.S. spends over $4 trillion annually on health care spending, accounting for nearly 20% of GDP, and this figure is projected to increase in the coming years. Chronic diseases, such as diabetes, obesity, and heart disease, are major cost drivers, accounting for the majority of health care expenditures. Innovative strategies to manage chronic diseases, including early detection and AI-driven diagnostics, are critical to reducing long-term costs and improving patient outcomes. Heart disease, in particular, remains a leading chronic condition, highlighting the need for proactive management and early intervention. Other factors include an aging population, rising demand for services, ongoing staff shortages, and persistent inefficiencies. The industry must also prepare for more patients seeking care, especially at home, as home health care becomes increasingly popular.

The reasons for rising costs are complex: expensive new drugs and therapies, fragmented care, administrative waste, ongoing staff shortages, and a lack of price transparency. Administrative tasks and administrative costs place a significant burden on healthcare organizations, reducing efficiency and increasing expenses related to Medicare, Medicaid, and overall patient care delivery. Indirect costs, such as transportation and time away from work, also contribute to the overall financial impact on patients and make healthcare less accessible and affordable.

Technological advances and digital demand are accelerating the pace of change. Digital technology is transforming healthcare delivery and patient engagement by streamlining patient interactions, enabling virtual care, and supporting personalized experiences. Digital tools now help patients schedule appointments efficiently, improving convenience and access to care. Telehealth, remote monitoring, and AI-powered analytics are making it easier to improve access and deliver care to underserved populations, while primary care physicians play a key role in expanding access through telehealth services. Efforts to improve access and the use of digital solutions are helping to address barriers related to geography, affordability, and personalization.

At the same time, payers and providers are under pressure to cut costs and create efficiencies. The pursuit of operational efficiencies and reducing operational costs through automation, outsourcing, and digital solutions is a top priority. Organizations are rethinking operating models, staffing, and workflows to boost productivity and sustainability. Business transformation, driven by AI and modern systems, is fundamentally changing organizational processes and strategies to ensure competitiveness.

The 4P model emphasizes prediction and prevention, with a focus on well-being and the integration of wellness programs to promote preventive care and reduce costs. Community health programs are also playing a vital role in improving health outcomes at the local level, especially for climate-sensitive health conditions. The importance of overall health and addressing specific health conditions is increasingly recognized as part of a holistic approach to care.

Access to care remains a challenge, but there are ongoing efforts to improve access through inclusive products, expanded behavioral health services, and digital health solutions. Improving access to essential care for diverse populations is a key goal, and digital technology is helping to bridge gaps in healthcare delivery.

The insurance landscape is also evolving. Designing inclusive health plans and health plan strategies is essential to manage costs, improve access, and deliver consumer-centric healthcare solutions. Health plans are being tailored to meet diverse member needs, enhance coverage accessibility and affordability, and engage consumers through digital tools and personalized experiences.

Healthcare expenses are not limited to direct medical charges. Indirect costs, such as transportation and lost work time, are significant for many patients. Reducing these costs through alternative care options can make healthcare more accessible and affordable.

New care models and technology are enabling better collaboration among care teams, with care coordination being a cornerstone of value-based care programs. The integration and analysis of patient data from multiple sources support personalized care, predictive analytics, and improved clinical efficiency. The rise of precision medicine is transforming diagnosis and treatment by leveraging genetic and behavioral data for customized care.

AI and advanced diagnostics are enhancing cancer care, particularly for cancer patients, by improving diagnostic accuracy and monitoring for treatment-related complications. Predictive modeling and AI are also being used in population health management to identify risks, promote health behaviors, and address health disparities.

Industry-wide change is being shaped by healthcare policy, with regulations, subsidies, and reimbursement models influencing strategies and stock performance. Organizations like the World Health Organization and the American Medical Association provide guidance and set standards for the industry. The health care industry is leveraging AI and digital transformation to drive growth, improve diagnostic accuracy, and adapt to evolving market demands.

In summary, the next wave of healthcare investment is being shaped by rising costs, chronic diseases, operational efficiencies, digital technology, and business transformation. Preventive and personalized care, supported by wellness programs, community health programs, and a focus on overall health and well-being, will be key to building a more resilient, efficient, and equitable healthcare system.

If there’s one thing we’ve learned during the past few years, it’s that healthcare is more than just important. It’s a top priority.

The technology healthcare providers rely on is the most advanced it’s ever been. It’s hard to imagine how much more advanced it might become. And yet, healthcare improves almost daily.

For investors, that makes healthcare and healthcare technology a perfect opportunity.

The 4P model and shifting healthcare trends

There is a tectonic and timely shift happening in healthcare service.

A new need to cut costs and create efficiencies fuels this shift. The old paradigm of sick care is being replaced by a new focus on preventative care. To combat this, healthcare companies and providers are shifting to a 4P medicine model. The “4P” model is:

• Predictive
• Preventive
• Personalized
• Participatory

Increasing advances in technology make the 4P model possible. But how does that create opportunities for investors?

What creates healthcare investing opportunities?

The healthcare industry within the United States is massive.

In 2020, spending related to healthcare reached almost 20% of the U.S. GDP. For those of you keeping score, that means we spent over $4 trillion on the healthcare industry. With an aging population and rising inflation, studies expect that number to rise at the same rate as the GDP through the year 2030. That’s an increase of over $200 billion this year alone—and it will increase every year.

As the need for healthcare grows, the industry must work to become increasingly efficient. This requires continuous investment in new and improved health technology.

Over the past twenty years, certain segments of healthcare have struggled to keep pace with the rapid technological advances seen in other industries. Recently, the need for the global healthcare market to digitize and innovate has become increasingly clear.

Meanwhile, healthcare costs continue to rise at unsustainable levels. Some of the many reasons for this, including:

• An aging population
• An increase in chronic disease
• A current mental health crisis
• A continuing shortage of physicians, nurses, and other healthcare professionals
• A lack of access to care
• An increase in digital demand by hospitals and patients

We also can’t understate the long-term effects of the COVID-19 pandemic. Practices previously viewed as typical shifted to create a new normal. Both health services themselves and the healthcare sector as a whole must change to meet the current state of the world.

Innovation in healthcare creates new avenues to improve patient care, treat patients remotely, improve patient flow through digital appointments, and reduce emergency care services. These improvements are possible through predictive modeling, artificial intelligence, and technology.

As these healthcare systems and technologies grow over the next decade, so do our investment opportunities.

Revolutionizing the world with healthcare tech

With new technology comes a new patient experience: virtual care. Artificial intelligence (AI), augmented reality (AR), and virtual reality (VR), along with Machine Learning, are transforming almost every aspect of medicine that you can imagine. You can now find these technologies in nearly every facet of healthcare, such as:

• Robots assisting surgery
• Virtual nursing assistants
• Voice-to-text transcriptions
• Electronic health record analysis
• Preventative health tracking

For healthcare organizations and patients alike, the uses seem endless. AI can learn to detect diseases and analyze information from a patient’s health record in order to more accurately diagnose a health problem. Machine Learning can process large pieces of data from clinic trials and other sources. It can use this data to identify patterns and make medical decisions with minimal direction. This allows doctors to better assess risk and offer more effective treatments. AR, combined with AI, can help healthcare apps be extremely beneficial to both doctors and patients. VR can also help with training clinicians through simulation, educating patients, and aiding with treatment.

Where do we go from here?

As investors, it seems like a golden opportunity: we invest, health systems improve, and people get the care they need. While other parts of the system can benefit from similar tectonic shifts (health insurance, for example), the future is very bright for healthcare investors.

The medical technology industry creates opportunities for us all: for patients, care providers, healthcare companies, and their investors. Now that we know that, we can look for those opportunities when we make investment decisions.

The Medical Device industry led by companies like Medtronic, Edwards Lifesciences, Baxter, and Boston Scientific are interesting places to watch for developing trends. As always, research can help you find companies that match your money personality, risk tolerance, and personal preferences.

Healthcare Technology

The healthcare industry is experiencing a significant transformation as healthcare technology takes center stage in shaping the future of health systems. Healthcare leaders are increasingly turning to innovative digital health solutions to address pressing health concerns, improve health outcomes, and elevate patient care. The widespread adoption of electronic health records has streamlined the management of personal health information, making it easier for healthcare professionals to coordinate care and make informed decisions.

Remote patient monitoring is another breakthrough, allowing providers to track patient health status in real time and intervene early to prevent complications. These advancements not only improve patient satisfaction but also help reduce costs by minimizing unnecessary hospital visits and optimizing resource allocation. As digital health tools become more integrated into everyday practice, healthcare professionals must stay informed about the latest trends and technologies to ensure they are delivering the highest quality care.

This significant transformation in the healthcare industry is not just about adopting new gadgets—it’s about reimagining how health systems operate to better serve patients, improve health outcomes, and address the complex needs of diverse populations. By embracing healthcare technology, the industry is poised to deliver more efficient, effective, and patient-centered care for years to come.

Sustainability and Climate Change in Healthcare Tech

As the world faces growing environmental challenges, the healthcare industry is recognizing its responsibility to address sustainability and climate change. Health systems are significant contributors to global carbon emissions, with energy-intensive operations, extensive supply chains, and substantial waste generation. In response, healthcare leaders are leveraging healthcare technology to create more sustainable practices and reduce the industry’s environmental impact.

Digital health solutions, such as electronic health records and telemedicine, are helping to minimize paper use, decrease travel-related emissions, and optimize resource utilization. Remote patient monitoring and virtual care models not only improve healthcare accessibility and patient engagement but also contribute to a smaller carbon footprint by reducing the need for in-person visits and hospital stays. Additionally, advanced data analytics enable health systems to identify inefficiencies and implement targeted strategies to reduce energy consumption and waste.

Climate change also brings new health risks, from vector borne diseases to heat-related illnesses, making it essential for healthcare providers to build resilient systems that can adapt to future attacks and evolving health needs. By integrating sustainability into healthcare technology investments, the industry can improve health outcomes, protect community health, and ensure a healthier future for both people and the planet. As healthcare professionals and organizations continue to innovate, prioritizing sustainability will be key to achieving better outcomes and long-term success.