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4 Stocks That Are Disrupting the Healthcare Sector

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Sapna Bagaria
·6 min read
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The multitrillion dollar U.S. Healthcare industry was bound for disruption, given the degree of inefficiency and over expensiveness it was grappling with.  The country’s economic history has established this fact over the ages that industries, which are overexpensive and inefficient will be overturned and one such space is the U.S Healthcare industry.

Notably, healthcare costs in the United States outpaced GDP growth (healthcare industry accounts for nearly 20% of the U.S. gross domestic product), which makes the rising cost unsustainable. The dire need of fresh approaches to solve problems is what is leading to dismantling the healthcare space for its overall revamp.

While this revitalization was already on the anvil, the COVID-19 breakout further acted as a key catalyst. In fact it won’t be much of an overstatement to say that the prevalent pandemic has been the most fundamental disruptive challenges for health systems in more than a century now. It brought to the fore the importance of technology in the healthcare industry.

Many of the technologies in the pre-COVID era were applied sporadically to the domain of healthcare. Now with the onslaught of the pandemic, the role of technology became indispensable to the medical sector. These include, widespread use of telemedicine in doctor-patient consultations, drone deliveries of medicines to communities, local manufacturing of protective equipment using 3D printing and the use of internet-based technologies, such as blockchain, growth in AI, machine learning, quantum computing, robotics, augmented reality and big data.

Apart from technology, the entry of outside participants other than the familiar and experienced healthcare players are revolutionizing the sector the space. For instance, Amazon.com, Inc. AMZN is making constant advancements in the healthcare sector via health insurance, pharmacy delivery and now telehealth services. Other retail players like Walmart, Google and Alphabet are also exploring the healthcare space. These companies with access to substantial database and their ability to capitalize on the same to develop consumer-centric models of care for improving patient outcomes have enough potential to lend a tough competition to the incumbents. Equipped with hefty  technology and massive consumer dataat their disposal, these new contenders hold great prospects to overhaul the healthcare sector, even if it means to upset the usual order of the healthcare realm.

Other companies making a foray with a promise to bring about a sea change in the healthcare space include the big retail pharmacy chains, namely Walgreens and CVS Health Corp. Both are combining their thousands of stores and walk-in clinics with their e-commerce systems to create new digital healthcare delivery platforms. Retail clinics are increasingly being well received by patients as they address many of the consumer priorities that some traditional practices may not offer. These retail clinics provide a better physician-patient relationship with expanded face-to-face time, economic transparency in coverage and care prices, convenience of care (defined as minimal wait times and same-day appointments), and access to digitally-enabled tools and services, such as mobile applications and telemedicine services.

Wearable devices are also gaining wide acceptance. UnderArmour, for instance, invested heavily in wearable devices and with the acquisition of companies, such as MapMyFitness and MyFitnessPal, it became the major player in digital fitness.

Here we highlight the most innovative organizations that have the potential to shake the pillars of age-old traditional practices and modernize the entire system.

Amazon.com, Inc.’s technology expertise is likely to make it a potential game changer for healthcare. The company has the size and scale to jump on the bandwagon of change and influence the healthcare industry as a whole.

Amazon started taking big strides in the healthcare arena,  in 2018 with its acquisition of online pharmacy PillPack. The tech company also sparked rampant speculations when it teamed up with JPMorgan Chase and Berkshire Hathaway on their healthcare venture Haven.

Management has also announced in 2018 that the company planned to open primary care clinics at its Seattle headquarters. The company also created  a new virtual health service benefit for employees and their families in the Seattle region, called AmazonCare. The company is now mulling to provide this virtual medical service  to large employers through a mobile app. This shows the company’s growing interest in the online healthcare delivery space. The stock curently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

By dint of extensive data at its disposal, Apple Inc. AAPL is taking the plunge after tasting remarkable success with wellness monitoring through its Apple Watch and iPhone apps. The iPhone has gained  prominence in the healthcare sector by allowing patients to measure blood pressure, predict cardiovascular events or analyze body fat composition through the smart device.

Additionally, the company offers numerous gadgets to help manage daily fitness and wellness, such as ResearchKit for collecting research data and HealthKit for  tracking mental, nutritional and physical activities. The stock carries a Zacks Rank of 3, presently.

Walmart Inc. WMT, the largest retailer in the world grabbed headlines a year ago when it opened its first clinic in Dallas, Georgia. The health center now offers a slew of services ranging from primary care to dental to behavioral health at a flat fee regardless of the patients’ insurance status along with on-site lab testing and imaging.

Walmart Health made a steady progress since the launch of its first center. It has further plans to inaugurate at least 22 such centers in Georgia, Florida, Illinois and Arkansas by the end of 2021. The company also made inroads into health insurance by unveiling a Medicare-focused brokerage and teaming with Clover Health on co-branded Medicare Advantage plans.
The stock is Zacks #3 Ranked at present.

Teladoc Health, Inc. TDOC offers virtual care solutions at every step of the care pathway for patients and physicians. This technology uses remote monitoring, videoconferencing and much more to extend the reach of nurses and physicians for dispensing better care. The telehealth service is a classic disruptive innovation that is fast changing the way health is being delivered at home from the existing practice of visiting clinics.

The stock carries a Zacks Rank of 3, presently.

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