Health tech is the next big thing

Every era has its defining companies.

The ones that dominate the global markets but also our lives. If you go back to early in the 20th century, these were the oil giants. In the 21st century, these were tech giants like Apple, Amazon and Google.

But looking ahead, I believe the biggest company in the world will be different.

I believe it’ll be a health tech company.

And there are four reasons why I believe this:

1) Healthcare is a trillion dollar sleeping giant 😴

Here’s the big picture.

The global healthcare industry is estimated to be worth over $12 trillion a year (as of 2024), making it one of the largest sectors in the world.

Of course there are numerous segments to the this industry like Healthcare Services & Provision, Pharmaceuticals & Biotechnology, Medical Devices & Diagnostics and Health Admin & IT. But that’s still trillions being spent across the world, all to make sure we live healthier.

And the US by far is the biggest spender. They spend almost $4.9 trillion a year, which is about 20% of their GDP.

2) Healthcare is becoming more consumer driven 👪

People are taking a more proactive role in their health, moving away from the traditional paternalistic healthcare.

We all want to rely on doctors and hospitals less. So we are turning to OTC medications, dietary supplements, and even digital health solutions, bypassing the usual gatekeepers for quicker access and a better experience.

Just as an example, telehealth usage surged 38x since the pandemic and people are still choosing to use platforms like Teladoc and Hims & Hers that offer virtual consultations and prescriptions for just a small monthly fee.

3) Healthcare is ripe for disruption 💥

A lot of experts (not just me) believe that healthcare remains one of the least digitized and most inefficient industries in the world.

Just at a high level, these problems standout:

1. It’s too expensive: The U.S. healthcare system is well known for its astronomical costs. But the cost of healthcare isn’t reducing anywhere else in the world. The lack of price transparency, inefficiencies, and administrative bloat are pushing up expenses.

2. Access is a nightmare: Over 3.5 billion people globally lack access to basic healthcare services.

3. It’s wildly inefficient: Electronic health records (EHRs) are still fragmented, making care coordination between teams, hospitals and different providers extremely difficult.

4. It’s slow to adopt new tech: Unlike fintech or e-commerce, healthcare has always been slow to adopt AI, automation, and data driven efficiencies.

5. Demand continues to grow: An aging global population means demand for healthcare will only increase, placing even more pressure on systems that are already inefficient and overburdened.

4) Healthcare is already changing but it’s just the start 🏁

There are lots of new technologies already trying to reshape healthcare. This, I believe is setting the foundation for a future trillion dollar health tech company:

1. AI & Machine Learning: AI models are outperforming doctors in diagnostics, aiding in the discovery of new drugs and improving clinical decision making:

   • Med-PaLM, developed by Google, is answering questions in the medical domain and even passed the USMLE with a score of >80%!

   • Benevolent AI is applying advanced AI to drug discovery and development.

   • Hippocratic AI is building safety focused AI agents for healthcare. For example one of their agents does a weekly call with a patient to check in on how they are managing their CKD and addresses any gaps in their care.

2. Precision Medicine startups are tailoring treatments to individual genetic, environmental, and lifestyle factors:

   • AC Immune is a Switzerland based company helping diagnose, treat and prevent neurogenerative diseases.

   • Engine Biosciences uses machine learning to pinpoint critical disease biology that informs new medicines, including targets, biomarkers for patient selection, and combinations.

   • ReCode Therapeutics is developing therapeutics for genetically defined diseases with no existing treatment options including primary ciliary dyskinesia and cystic fibrosis.

3. Wearables & Remote Monitoring: Apple Watch and Fitbit were just the beginning. Wearables are getting smarter and nimbler:

   • Oura is a Finnish company renowned for its health-tracking smart ring.

   • Lura Health is the world’s first continual health monitoring device powered by saliva and is worn in mouth!

   • Nuvo has created an FDA-cleared platform for remote fetal monitoring, providing convenience and peace of mind for pregnant mothers.

4. Telemedicine & Virtual Health Care: Telehealth exploded during COVID-19, proving that virtual care is not only viable but preferred by many patients in certain areas:

   • HealthHero is Europe’s leading digital-first healthcare provider, providing online consultations with GPs and Allied Health Services.

   • K Health provides primary care, weight management and mental health care virtually across the US.

   • Doxy.me has over 1 million providers globally using their telemedicine platform to conduct online consultations.

On top of these new tech breakthroughs there are also health startups using 3D Printing, Blockchain, Augmented Reality (AR)/Virtual Reality (VR) and even Brain Computer Interfaces (e.g. Elon Musk’s Neuralink)

❤️ Why Investors Should Care

Tech’s biggest players already see the writing on the wall. Apple’s wearables are making serious money, Amazon has its sights set on pharmacy and primary care, and Google’s AI research in healthcare is nothing short of revolutionary.

We know healthcare is ripe for disruption, experiencing a technological convergence and is becoming more consumer driven. So it’s only a matter of time when a health tech startup can become more impactful and scalable than ever before.

The one thing to bear in mind with all health startups are the high barriers to entry.

Every company needs to navigate systems and regulatory complexities more than other industries. But well funded companies, with the right experience, network and execution can overcome these.

So the opportunity is clear: the trillion-dollar health tech giant of the future is being built right now.

But who will it be?