Winning Health Care Stocks to Profit from AI Upgrade
- The $10 trillion health care industry wastes $0.30 of every dollar on inefficiencies.
- But, it’s about to get a major, Distruptifying AI overhaul.
- Plus, one investment to buy now for the industrial revolution in health care.
I am a numbers man. So if you’re anything like me, when you get a bill, you study every single charge.
I love to crunch the numbers and know exactly where my money goes.
But there’s one type of bill that makes me cringe. It always surprises me and reminds me to be extra careful when I practice jiujitsu martial arts every week…
Let’s say you have insurance. Just look at approximately what these common tests would cost you:
- X-rays: $300.
- Specialist visit: $450.
- Blood work: $1,500.
- Hospital stay: $2,000 to $10,000.
For an economy that’s mastered productivity for physical goods such as cars, appliances, food, clothing and gadgets, we’re way behind the curve when it comes to health care.
You see, health care is one of what I call “the Four Horseman of Inflation.” According to the U.S. Bureau of Labor Statistics, health care inflation has increased 2.5 times more than general inflation since Medicare started in 1965.
On average, Americans spend about $3.5 trillion a year on health care-related expenses. The United States spends more on health care than any other country in the world.
Yet in a lot of respects, the quality hasn’t necessarily improved enough to justify that cost. What I believe happened is that it became more expensive to employ highly skilled people.
Especially in a field that’s done nothing to improve productivity.
But that’s about to change. And I’ve found an incredible opportunity to get in on this industrial revolution of health care.
Leading the Industry to More Efficient Health Care
There are major advances on the horizon that will disrupt the status quo of the medical industry’s operations. Here are the two big disruptors that will bring us into this new age of health care.
- Artificial Intelligence (AI):
We now have the ability to liberate mountains and mountains of sensitive data from patient charts, medical journals and cutting-edge new studies. And we can apply advanced AI to the data to find trends, then use it to map out the best courses of action when it comes to treating patients.
No technology has ever been able to do this before.
When patients are admitted to the hospital, AI will help doctors identify high-risk patients, quickly make diagnoses and save precious time filling out and filing paperwork.
At the same time, AI can recommend individualized treatments based on a patient’s history and tests.
We’re not going to see robots replace doctors anytime soon, but robots are already assisting doctors.
This will save valuable time and help prevent inevitable errors and oversights.
- Liquid Biopsies and DNA Sequencing:
When it comes to diseases such as cancer, early detection is key.
Traditional methods rely on PET and CT scans. But those scans are usually only ordered if a patient is already experiencing symptoms.
And they are expensive.
This is why liquid biopsies (LB) are sweeping the field.
These are noninvasive, blood-based tests that can detect cancers before they become critical and life-threatening. It does this by tracking specific DNA mutations in your bloodstream.
Now, with next-generation DNA sequencing (NGS) technology, the cost of LBs is coming down rapidly. NGS makes studying and documenting information related to DNA cheaper, quicker and more accurate.
LBs will become an invaluable tool for detecting cancers in a treatable time.
Tap the Biotech Play Set to Soar With the Health Care Revolution
These advancements do not necessarily mean less of our money will go to health care. But it will mean getting a bigger bang for our buck.
AI will enhance administrative efficiency and lower the cost of delivery. LB with NGS will further lower the cost of delivery and further increase longevity and quality of life.
According to the CEO of Health Catalyst, a company providing an AI-driven data analytics platform to the health care industry, $0.30 of every dollar we spend on health care is wasted due to inefficiency, overtreatment and failure to identify high-risk patients.
So if we’re spending $3.6 million, that means over $1 million is wasted.
Since spending on U.S. cancer-related health care was estimated to be $87.8 billion in 2014, according to the Agency for Healthcare Research and Quality, just think of all those wasted dollars that could have been put to use. Today, the amount we spend on cancer-related care has jumped up to around $100 billion.
The market is enormous — and ready to be disrupted. As it becomes more efficient thanks to technological breakthroughs such as AI, investors have a great opportunity to reap the rewards of this industry transformation.
One way to play this trend is through the Invesco Dynamic Biotechnology & Genome ETF (NYSE: PBE).
This exchange-traded fund (ETF) holds a basket of stocks focused on biotech and genomics.
It invests in things such as next-generation DNA sequencing technology, which will be another big player in the disruption of old-world health care.
Until next time,
Editor, IPO Speculator