Opinion
Telemedicine, Which Gained Momentum due to Covid-19, Will be with us Long After it Recedes
Just as what counts as normal in our day-to-day lives may be changing, what counts as normal in healthcare provision will also change
19:0806.05.20
The Coronavirus (Covid-19) pandemic has upended daily lives around the world. With tentative signs that we have passed the first peak of cases in many countries, it is worth pausing to ask which of the changes observed in the past two months will stay with us after the crisis.
Lachlan Towart. Photo: UBS Israel Other benefits of telemedicine include lower cost, and the ability to extend primary care services to those geographically distant from healthcare resources. This is particularly important in large countries like China that have historically lacked a primary care service, and where internet health is one of the fastest-growing segments of the healthcare industry.
Within healthcare provision, one change that is here to stay is the surge in the use of telemedicine. Hospitals and doctors have sought to keep non-critical patients out of overcrowded hospitals, both to prevent infection transmission and to preserve supplies of protective equipment. Many users – and physicians – are new to this way of interacting: while telemedicine was already widely available under many U.S. commercial insurance plans, for example, prior to the pandemic only around 10 percent of patients had actually used it. This lower utilization reflected a lack of awareness and in some cases a reluctance to try something new. Both have now changed.
Lachlan Towart. Photo: UBS Israel Telemedicine goes beyond simply video-calling your doctor. Other applications within the broader telemedicine umbrella include remote monitoring and even remote or robot-assisted surgeries. We see the growth of these technologies as part of a broader trend in healthcare provision: more digitization and technology to save costs and improve outcomes. The pandemic is the external event that will trigger a step-change in its adoption.
The need for change is clear. Healthcare costs are rising around the world, reaching 12.6% of GDP among OECD members in 2017, the latest year for which data are available, according to World Bank figures. Developing nations are catching up fast. The drivers of these numbers are well-entrenched: population growth, aging, and urbanization. By 2030, more than one billion people will be aged 65 or older, two thirds more than today. And with more people now living in cities than in the countryside, a more sedentary lifestyle is leading to greater incidence of "lifestyle diseases" like obesity, diabetes, and heart disease.
As a result, healthcare providers are exploring the use of technologies that could improve healthcare efficiency, deliver improved outcomes, and better manage costs. We believe healthcare is now in the early stages of a process of digitization driven by increases in processing power, better connectivity, and changing social attitudes.
How can technology improve healthcare efficiency? Algorithms can read X-ray images quicker and more accurately than human radiologists, freeing up clinicians to work on more complex tasks. By using algorithms to personalize health interactions, insurers are able to focus more on preventive care, reducing waste, and lowering total costs. Alignment Health and Clover Health claim to have reduced hospital admission rates amongst their members compared to traditional managed care.
Other applications are more futuristic. One study published in 2018 by Verily, Google's healthtech subsidiary, assessed patients' cardiovascular disease risk by viewing retinal scans using a machine-learning algorithm. The algorithm's accuracy in detecting patients likely to suffer from heart disease within five years approached that of traditional diagnostic methods.
These examples illustrate just some of the ways the staggering amount of health data can be used. On UBS estimates, 5% of all data in the world comes from the healthcare system, and how to better employ it is an increasingly urgent question.
Alongside the growth of digitization in healthcare, we see two other trends. First, patients are becoming more involved in decisions about their care, thanks to the easier availability of health data. And second, payers – both governments and private insurers – are paying ever more attention to value for money in their healthcare budgets. Digitization helps facilitate both consumerization and value-based reimbursement, as they both demand data on which to base decisions.
These changes are not without risk. Health information is personal and sensitive. Its greater accessibility online poses real privacy risks that must be managed by industry and regulators. Controlling the legitimate use of health data, while preventing its theft and misuse, will not be trivial. Questions of responsibility also arise, as more decisions are influenced by or delegated to software.
We all hope for a return to a sense of normality soon. But just as what counts as normal in our day-to-day lives may be changing, what counts as normal in healthcare provision will also change. We think telemedicine is here to stay, in one form or another. Wider adoption of technology in healthcare will threaten incumbents who fail to keep up. But it will also present opportunities to companies and investors willing to adapt.
The writer is an Equity Analyst, European Investment Office, UBS Global Wealth Management
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