The untapped potential of preventive health care

According to a study by the McKinsey Global Institute, $13.4 trillion could be added to the global economy by 2040 if the unmet needs of patients who suffer from musculoskeletal, mental health and neurological disorders are addressed.

Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, says from an investor’s standpoint, the health theme runs the gamut of opportunities from health preservation and disease prevention to care service delivery and treatment.

“Indeed, an entire industry has materialized over the last decade around prevention, with wrist trackers and other smart personal health monitoring devices now omnipresent and insurance companies offering subscribers financial incentives to adopt healthy lifestyles,” Ducrozet says.

As a result, the field of preventative health care has yielded a number of key investment opportunities. When investing in prevention however, it is important to consider the health theme holistically, going beyond the health care sector.

Prevention includes both self-care and diagnostics, where digital health plays a growing role. One ubiquitous example is wearables — fitness trackers worn on your person to measure and encourage higher activity levels and healthier decision making.

At the same time, the number of smart devices connected to the internet of things ballooned from 7.74 billion in 2019 to 11.57 billion in 2022. And this number is expected to more than double to 25.44 billion in 2030.

As with a pre-diabetes diagnosis, patients can make lifestyle adjustments to avoid diabetes altogether, making it reversible. The realm of diagnostics opens an altogether different dimension of investment opportunities in prevention.