Implant This
As you know, one of the positive arguments for Montgomery funds investing in Medibank Private, is the ability of the company to harness rapidly-advancing technologies to improve patient outcomes and lower private health insurance claims.
In the US the question being asked is; Why give your doctors permission to incorporate data from fitness trackers and health apps into electronic patient records?
The answers are becoming more obvious to a growing number of people and a tipping point can now be seen on the horizon. The result of the tipping point being reached will be widespread better patient outcomes and lower hospital claims back home for Medibank, if the trend catches on.
At the time of the Medibank float we observed a higher-than-60 per cent ratio of people in the US willing to wear a traceable health device.
The high level of acceptance is partly due to the obvious advantages such as a GP being able to “spot signs of an ailment sooner” or to “suggest behavioral changes or medication before you land in the emergency room”. Doctors could also monitor post surgery recovery and medicine regimen adherence.
According to the article published in the Minneapolis StarTribune, “many doctors and hospitals see potential. The Mayo Clinic in Rochester, Minnesota, uses Fitbit trackers to monitor hip-replacement patients for a month after surgery. Health workers get data on daily steps and can tell when patients have trouble walking — a hundred or more miles away. The Ochsner Health System in New Orleans is turning to wireless scales and blood-pressure devices to help reduce readmissions for chronic diseases such as heart failure. Noticing a small weight gain, for instance, might reveal fluid buildup resulting from the heart failing to pump normally. Not only can doctors intervene sooner, they can use the data to show how exercise can help lower blood pressure.
“With Apple’s HealthKit tools, disparate gadgets and records systems can work together more easily. Think of HealthKit as a common language, eliminating the need for translators. Beyond sleep and exercise data coming from fitness trackers, doctors can eventually incorporate devices that measure glucose, blood pressure, respiratory rates and blood-oxygen levels. The devices communicate with the iPhone wirelessly or through the headphone or charging port. Google, Samsung and Microsoft have similar ambitions that will expand monitoring to users of Android and Windows phones, though they aren’t as far along. For now, developers must write separate code for each Android or Windows app to integrate.”
As you know The Montgomery Fund and The Montgomery [Private] Fund are both long-term investors in high quality businesses, with bright prospects available at a rational price.
In Medibank we believe the next wave of technologies could significantly change the claims profile for private health insurers (not to mention the better patient outcomes). Combined with a near doubling of Australia’s population in the next twenty years, we believe there is an argument that Medibanks long term future is very bright.
Read the full StarTribune article here: http://www.startribune.com/lifestyle/health/292946971.html
Roger Montgomery is the founder and Chief Investment Officer of Montgomery Investment Management. To invest with Montgomery, find out more.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Gaveen Jayarajan
:
From AFR today which may be of interest regarding the impact of technological change on healthcare spending taken from the intergenerational report:
“The report this week forecast government spending on health to rise from 4.2 per cent of gross domestic product in 2014-15 to 5.7 per cent of GDP by 2054-55 but interestingly most of the spending increase is not from the ageing population, but attributable to rising incomes and technological change.
Whereas technology advances can drive down the production of goods and services in other industries, it tends to have the opposite overall affect in health, and also defence coincidentally. When new treatments come on the market, they can be expensive at first. Sometimes they are less invasive –such as keyhole surgery –compared with conventional treatments so more people demand the surgery. As treatments for previously untreated conditions are developed, the market naturally expands as do the demands for government subsidies.”
This is one line of thinking about why private health insurers may face a headwind with claims escalation.
Paul Muscroft
:
Ha ha – I hadn’t thought it through this way. I am actually doing the 10K step challenge with MPL and Flybuys ($100 reward if I do >=10K steps every day for the whole of March). So I have linked my Fitbit with MPL/Flybuys so they can monitor my progress. How long before MPL offer me a reduced premium if I agree to have my Fitbit permanently registered with them? These devices also do heart rate (perhaps soon blood pressure). But do I really want my health insurer keeping such a close eye on me.
Roger Montgomery
:
increased benefits = loss of privacy. Then add artificial intelligence to the mix…
michael wilson
:
Hi Roger, I’ts all very well to monitor patients’ physical health (exercise & diet) but what is affecting their health more than anything is what is going on in their minds. You can do the exercise & have the best diet & look a million dollars but what ultimately will determine your health is your mental state. Depression & other mental illnesses are growing at a fast rate in the Western World manly because of our lifestyle & the way we perceive the environment that we live in; we are under chronic stress from work, family relationships etc.
People need to learn to be happy, relax & give the mind a break through meditation.
Michael Wilson Body/mind Therapist
Roger Montgomery
:
SOunds great Michael. Thanks for sharing.
John E
:
Hi Andrew,
Interestingly MPL currently have a promotion for customers in association with Flybuys next month, where if you complete 10k steps each day for the month, you get rewarded.
So MPL are starting to be proactive in improving their customers health which will hopefully translate to a better claims experience. This data will also provide further analytics into customer behaviour via their health outcomes.
This is the beginning of the journey as you mention.