Sanjana Vig | Wealth of Geeks

Healthcare in the United States today costs $13 thousand per person. If that sounds mind-boggling, it's because it is. This country has the most expensive healthcare system in the world but report health outcomes worse than in any other developed country.

While the situation seems dire, some solutions are already in effect. Healthcare technology companies are working diligently to curb wasteful spending and improve care for patients while making physicians' jobs easier.

As a patient, you may have already seen some of these technologies in action. If you haven't, then you're in for a treat.

U.S. Healthcare Spending
As mentioned, healthcare costs $13 thousand per person, or, as of the end of
2022, more than $4 trillion in total. That data is from the Center for Medicare
Services (CMS), and it projects the total spending to hit $6.8 trillion by 2030,
which translates to a future cost of $19 thousand per person.

Why is our healthcare system so expensive? Much of the excess spending is due to inefficiencies in physician workflows, patient care pathways, and inconsistencies across hospital systems. There is also wasteful administrative spending, and billions are lost due to billing mistakes.

To top that, our population is aging. 21% of the U.S. population will be over 65 by 2040, and chronic medical conditions are rising. 6 in 10 Americans have at least one chronic medical condition, and 4 in 10 have at least two.

Implementing changes to increase efficiency and reduce costs has become essential. To that end, some companies have figured out how to generate revenue and profit by addressing these issues.

Enter, HealthTech.

HealthTech, Defined
HealthTech has a wide range of definitions depending on which organization or
social media influencer you follow. One unique take on the definition comes from
the team of healthcare and finance experts at Langar Holdings, Inc:

''Companies that develop technology to create efficiency in healthcare by addressing key pain points of patients, providers, payors, and hospitals.''

In other words, HealthTech is a technology that solves various pain points within the industry.

The key pain points are important to understand as they ultimately lead to wasted time, resources, and inefficient workflows, which in turn contribute to the high cost of healthcare.

Pain Points In Healthcare
Langar's team reviewed data from the Centers for Medicare & Medicaid Services
(CMS) for all the different areas of healthcare spending. They identified seven
unique sectors that represent where wasteful expenditure occurs and where
existing public HealthTech companies are making a difference.

These sectors, and their definitions, are as follows:

Access to Care - Provide care outside of a hospital setting through virtual, in-
person, or hybrid care.
Biopharma - Pharmaceutical and biotechnology companies that use artificial
intelligence as part of their process.
Decision Support - Provides clinicians with patient-related information that is
intelligently curated or presented to enhance patient care.
Hospital Operations - Improves the efficiency of hospital workflows as they
relate to patient care.
Clinical Trials - Efficient management of trials that support novel treatments.
Insurance - Technology that supports government and private programs.
Treatment Device - Devices that use smart learning algorithms to help clinicians
treat medical problems.
Further analysis conducted by Langar's team revealed how much money could
potentially be saved using healthcare technology.

The result? $890 billion and climbing.

The Public HealthTech Universe
There are over six thousand public healthcare companies in the U.S., Europe,
Australia, and Canada, and 104 qualify as HealthTech based on the Langar
definition*. In addition to solving key industry pain points, these 104
companies earn at least 51% of their revenues from HealthTech products or
services.

The combined total market cap of these companies is $617 billion*.