STORY OF THE MONTH
BRICE PRUNAS, Portfoliomanager, Aktien, globale Themenfonds And MAXENCE RADJABI, CFA Global thematic Equity Portfolio manager ODDO BHF Asset Management SAS
In this first Fund Insight of 2024, we aim to show how AI could provide an answer to the problem of uncontrolled cost inflation in Western healthcare systems, using the United States as an example.
UNCONTROLLED COST INFLATION IN THE US HEALTHCARE SYSTEM…
The percentage of the American population covered by a public health insurance scheme (such as “Medicare” or “Medicaid”) has peaked at almost 90% since 1980. Yet since then, for over 40 years, the cost of this health insurance system has risen at more than twice the rate of inflation. This divergence shows the relative failure of a system in which the reimbursement schedule drawn up by the health insurance organisations was supposed to encourage controlled and reasoned spending.
…IS DRIVING THE EMERGENCE OF VALUE- BASED CARE
This financial drift in the US healthcare system is the catalyst for a new approach to healthcare policy: Value-based Care, which took off at the beginning of this decade. In principle, it involves :
remunerating healthcare providers according to the costs incurred and the appropriateness and effectiveness of the services provided ;
making health insurance companies more accountable, so that they negotiate less expensive care ;
encouraging patients to consume more rationally by promoting competition.
WE BELIEVE THAT AI WILL BE THE KEY TO BETTER COST CONTROL IN THE US HEALTHCARE SYSTEM AND FOR THE DEVELOPMENT OF VALUE-BASED CARE
More broadly, we believe that AI will make an important contribution to a real response to the challenge of healthcare costs, by providing a solution to the shortage of doctors and specialists. In doing so, AI will help to reduce the inflation caused by the shortage of caregivers. In particular, AI will help to :
improve the quality of care, especially through the diagnostic support that AI provides. In this way, AI will tend to increase the availability of doctors and nurses ;
integrate more personalised data into care to improve the effectiveness and speed up recovery. This means using AI’s great strengths: its analytical ability to utilise large quantities of data to solve the specific cases it is presented with ;
provide autonomous care to replace the need for doctors and nurses. This third stage is not so distant or utopian, given current progress. For example, there are already AI models trained on X- ray images, which can be used for diagnosis as a first step in drawing up a treatment protocol, as well as AI-based surgical robots, some of which are already in use.
None of the aforementioned companies constitutes an investment recommendation.
Past performance is not a reliable indication of future return and is not constant over time.
Source : ODDO BHF AM SAS, CMS, Bernstein
