If you’re investing long-term, identifying early healthcare trends is a surefire way to maximize your gains. Healthcare is one of those industries that isn’t going anywhere, and continued advancements or developments in peripheral sectors like tech and real estate accelerate healthcare’s own innovation. This was a year for a slew of medical and MedTech advancements, including new obesity treatments, telehealth and virtual treatment expansion, and more. However, some long-term trends are just starting to bear fruit, and 2024 marks an important period for the outlook of the long-term healthcare sector.
If you want to capture the widest swatch of healthcare trends, you can’t grow wrong by splitting capital between a stable medical ETF and one of riskier (but higher reward) stocks. A good combo is the iShares Global Healthcare ETF (NYSEARCA:IXJ) and the speculative iShares Genomics, Immunology and Healthcare ETF (NYSEARCA:IDNA). Still, if you want to play stock jockey and pick stocks with the greatest 100X potential, following these healthcare trends is the way to go.
Artificial Intelligence in Healthcare
Artificial intelligence (AI) hit nearly every sector of the US economy in 2023, with some showing disparate impact over others. However, one long-term area in which AI will have an outsized impact is within healthcare trends. AI’s impact in healthcare sectors should compound at 37% annually, hitting $187.95 billion by 2023 compared to just $15.1 billion last year. Even if the specific figures don’t pan out, AI’s impact on emerging healthcare trends will undeniably impact investor opportunities and patient outcomes.
In July, scientists used AI to rapidly and accurately map a fruit fly’s brain. This points to rapid potential gains within neuroscience, as intimately understanding how human brains function—in healthy and unhealthy states—will generate insight into treating degenerative diseases like Alzheimer’s and more. At the same time, companies like Recursion Pharmaceuticals (NASDAQ:RXRX) leverage AI to accelerate drug discovery processes by rapidly matching gene/therapy combinations to determine the best fit. While this platform, in which Nvidia (NASDAQ:NVDA) has a substantial stake, will benefit shareholders, the true beneficiary is the legion of biotech firms who will now cut R&D costs and time to a fraction of where they are today.
Americans Are Aging
Next year marks two important milestones with massive ramifications on the healthcare sector forecast for 2024 and beyond. First, we’re hitting Peak 65—the point at which more Americans simultaneously cross over into the traditional retirement age window than ever before. At the same time, we’re transitioning into the Historical Reversal, where those 65+ outnumber children 15 years and younger. Both trends point to an undeniable factor in America’s long-term future, but also short-term healthcare impacts.
As medical advancements improve longevity, expect to see the 65+ population swell further as upper age limit ceilings keep moving higher. Though living longer, they’ll still face elderly quality-of-life concerns that keep cash flowing into key healthcare sectors (think mobility, nutrition management and similar old-age medical concerns).
This means that healthcare facilities and long-term care management sectors within healthcare will continue climbing. Look to REITs to best capitalize on this trend, such as CareTrust REIT (NYSE:CTRE). However, there is some risk with relying on skilled nursing and care facilities alone. If the situation becomes financially untenable nationally, legislation may step in to bring costs down and cut into those REITs’ bottom line. In that case, look to companies like HealthPeak Properties (NYSE:PEAK), who ditched its slate of old-age facilities in favor of pricier private-pay care properties.
Robotics and Automation in Healthcare
Just as AI pushes some healthcare sectors rapidly into the future, so are robotics and healthcare automation. Emergent tools let surgeons and providers outsource key portions of patient care, including delicate surgery, to robotics platforms to increase precision and improve patient outcomes. The S&P 500 and NASDAQ-100 player Intuitive Surgical (NASDAQ:ISRG) are undisputed leaders. While ISRG isn’t the only player in the game, its operational model is typical of other applications.
ISRG’s da Vinci robotics systems execute minimally invasive surgery on patients in a way surgeon hands cannot, increasing recovery time while minimizing risk. ISRG’s recent report stats point to the prevalence of robotics within healthcare. Global da Vinci-enabled procedures increased at a 17% CAGR between 2019 and 2023, while installations increased 13% year-over-year. The increasing prevalence of—and reliance upon—da Vinci robotics platforms point to a wider healthcare trend that will grow exponentially.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
