The $3 Trillion U.S. Healthcare Market Pales In Comparison To The Rising Billions
The United States has the biggest healthcare industry in the world, spending approximately $3 trillion a year. By 2018, healthcare will comprise close to 18% US gross domestic product – a sizable market opportunity for a new generation of entrepreneurs selling innovations to the industry, the government, and increasingly directly to consumers.
The highly publicized “$3 trillion” figure is a staggering, but ultimately distracting number when it comes to predicting future opportunities for healthcare innovation. Instead of focusing on the bloated US economy, long-term investors and entrepreneurs looking to make a dent in the universe should turn their focus to the rest of the world that currently has limited, or no access, to health care at all.
In practical terms, the US market is where it’s at for most upstarts today. And for good reason: it’s a huge market with new demands. But for those dreaming to change the game completely, a myopic focus on the US ignores the coming leapfrog opportunities in China, India, and throughout Africa and elsewhere. The healthcare market is global, and forward-thinking entrepreneurs understand that economic needs for health services are expanding far beyond US borders. Over the next five years, somewhere between three and five billion new consumers will be connected to the internet for the first time, according to entrepreneur Peter Diamandis, who calls these new consumers “the rising billion.”
The rising billion are consumers of goods and services, but they are also patients in need of medical care. They should not be ignored. They are the future of radical healthcare transformation; the solutions created for them will boomerang back to solve today’s biggest healthcare challenges: access, quality and cost.
With more than one billion people on Earth living on less than $1 per day, engineers and healthcare pioneers are looking for solutions that are not only radically cheaper, but also better than those used in the US. For example, a new molecular diagnostic test called GeneXpert is being used in developing nations to quickly and accurately diagnose tuberculosis, still one of the most deadly diseases worldwide. Another tech solution in Sub Saharan Africa helps patients with internal bleeding from a car accident or complication during pregnancy. In order to survive, these patients need to have their blood safely removed, filtered and returned.
A simple device called Hemafuse allows even untrained persons to safely treat internal bleeding. High and low tech solutions are being deployed to address significant medical need in regions with little to no healthcare infrastructure. Because of the specific social and economic needs of these patients, healthcare solutions are being designed at a fraction of the price compared to similar solutions in the United States. As the rising billions are armed with mobile and connected devices, affordable AI, 3D printing and even delivery drones, they will for the first time have access to healthcare services which were previously unattainable. These services won’t always have to be engineering marvels, such as the blood filtration device and diagnostic assay mentioned above (although many will be). They may be as simple as educational YouTube videos on basic wound care, or on proper sanitation to prevent disease.
With the power of mobile devices, billions of new people are starting to educate themselves on how to live healthier, more productive lives with the simple internet-based tools we take for granted here in the United States. Imagine what will happen when affordable AI, drone delivery and the 3-D printing maker movement starts to scale in the most remote parts of the world. Just as significantly, the rising billions are sure to affect the business models of today’s healthcare giants. When the cost of care must be close to zero out of necessity, new models will emerge. Merely the methods used to deliver healthcare services can make a big impact on cost. HIV treatment and care in the United States has improved significantly thanks to lessons learned from community health workers in Africa, Haiti and other parts of the developing world hard-hit by the epidemic.
In fact, Partners in Health tested this leapfrog approach in Boston, where 20 patients were treated using a program developed in rural Haiti. They found that among these patients, medical expenses decreased by 40%. Finally, this global movement will serve an added benefit to American consumers through the phenomenon of “leapfrog innovation,” which I have previously written about.
As soon as consumers and industry stakeholders in the United States see that much of their healthcare services can be delivered for a fraction of the cost, and with quality or superior outcomes, they will demand those better alternatives. We have already seen this trend unfold as public outrage over pharmaceutical price-gouging, a practice in which some companies charge US patients hefty sums for drugs that are distributed elsewhere for pennies. Healthcare spending in the United States is expected to rise almost 6% by 2024. But the global health market is expanding, with billions of new consumers increasingly empowered by connectivity and affordable tech. How much does this opportunity represent in dollars? Is it a $3 trillion opportunity? How many new patients will enter the global healthcare economy in the next 10 to 20 years? It’s difficult to say, but the opportunity I see is that entrepreneurs who start serving the rising billions today will be the leaders of tomorrow.
Source: Forbes. To the original article