Despite challenges, investors consider healthcare AI a smart move

For investors, aging populations and an increase in chronic diseases are two good reasons to keep putting money into AI and other healthcare innovations.
Jeff Rowe

There will undoubtedly be some bumps in the road as AI is incorporated ever further into healthcare systems, but for those who might be feeling discouraged it might help to follow the money.

According to a recent article in the Wall Street Journal, for example, investors are well aware that populations are aging, and rapidly, in many parts of the world, and for that reason alone they’re eager to support AI and other advances in healthcare technology.

“Technologies like artificial intelligence are poised for rapid growth in healthcare,” noted Travis Briggs, CEO of Robo Global, which recently launched the first benchmark index series tracking the robotics and AI revolution for investors.

Indeed, Briggs said some projections have healthcare AI growing from a business valued at about $2 billion in 2018 to $36 billion by 2025, which “has enormous benefits for patients—and investors.”

Similarly, in the view of Neena Mishra, director of ETF research at Zacks Investment Research

Innovation, it is likely still the early stages of the AI in healthcare transformation, a fact that “has driven a lot of private capital into these areas as investors want to get exposure to companies powering this technological revolution.” 

Interestingly, debates surrounding drug pricing, insurance and the opioid crisis have made investors wary of healthcare as a whole, but healthcare equipment and technology companies have been an exception.  According to analysts, that’s largely attributable to phenomena such as the aforementioned aging populations, as well as the rise of chronic diseases like diabetes and obesity, which have made medical devices such as in-home monitors, implants and other means of longterm care more necessary for providers and patients alike.

To be sure, say experts, regulatory pressures won’t be disappearing anytime soon, but tech and equipment firms will likely continue to duck, from an investment standpoint, the related ill effects.

Similarly, the demographic shift is also going to be, at the least, a long-term reality, so whatever technology is developed to help address that challenge is bound to attract significant investment attention.

To drive home that point, one analyst noted, “By 2035, more people in the U.S. will be older than 65 than there will be people younger than 18.”