The future of healthcare

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old map of Broad Street

In 1854, a sudden and deadly outbreak of cholera spread through London’s Soho neighbourhood, killing 616 people. Until then, it was generally believed that the disease spread through a noxious bad air known as a miasma.

However, during this outbreak, Dr John Snow did something different. He began mapping the location of each death. Combining this data with conversations with local residents, Dr Snow identified the source of the outbreak as a water pump on Broad Street. This use of data analytics saw the birth of epidemiology. It also led to a fundamental change in municipal water and waste systems globally, and a significant improvement in general public health.

166 years later, large-scale data analytics and machine learning (ML) are providing opportunities to completely transform healthcare outcomes, including the fight against Covid-19.

The cognification of healthcare

An early detection, multi-cancer blood test earned Grail, a Silicon Valley healthcare company, FDA Breakthrough Status in May 20191. The test combines state-of-the-art, high-intensity genomic sequencing of a patient’s blood with complex artificial intelligence (AI) algorithms and large data sets in the cloud to detect very early stage cancers.

The latest data from the company’s clinical research programme – expected to be one of genomic medicine’s largest ever pursued – shows the test can detect a strong signal for 50 cancer types across all stages with less than 1% of false positives2. This impressive technology, with investment backing from tech heavyweights such as Amazon, Tencent and Bill Gates, is only achievable thanks to recent advances in AI and cloud-based data analytics. If the company successfully develops a widely used low-cost, early-stage multi-cancer detection test, this will have profound implications for many traditional healthcare business models.

In the US, healthcare spending accounts for roughly 21% of personal consumption expenditure, with around US$80bn spent each year on cancer treatment3. This includes chemotherapy, inpatient hospital care, outpatient care and drug costs that can exceed US$400k. The potential deflationary impact of a sub-$1,000 gene-sequenced blood test to identify cancer at an early stage when treatment is much cheaper will be significant to both the industry and the economy4.

The opportunities to improve global healthcare with AI extend across the entire patient journey. Wearable technology is encouraging healthier behaviour in individuals while ML neural networks are providing much faster and more accurate diagnosis of many diseases than capable by a human5. Predictive analytics using big data sets can also help doctors to make faster decisions, freeing up time for patient interaction.

Meanwhile, AI is increasingly being used to better identify potential new drug molecules; reducing cost, time, research and development failure rates. Researchers at MIT recently used an AI tool based on the structure of the brain to identify a powerful new molecule capable of eradicating antibiotic resistant bacteria – advancing our fight against growing drug resistance6.

The Covid-19 pandemic has also seen the adoption of AI tools accelerate to support diagnosis, epidemiological trend analysis and vaccine discovery.

In China, introducing an AI system that classifies the severity of pneumonia caused by the virus on a patient’s lungs cut the time needed for analysis from six hours to under three seconds7. Natural language processing technology has also been used in Wuhan to carry out up to 1.5 million automated calls daily with households, where the AI is able to ask questions and understand the semantic meaning of conversations, allowing better tracking of the pandemic8. These tools have been critical in helping to reduce the virus’ impact.

Within our investment strategy, several of the businesses we invest in are developing highly innovative and technological solutions to address some of the greatest healthcare challenges. Intellectual property-focussed solutions are allowing these businesses to build strong barriers to entry and high levels of pricing power, while generating above-market levels of cash flow.

Portfolio case studies


Medtronic is a leading global medical technology company which benefits from a diverse, intellectual property-protected product portfolio spread across cardiovascular, diabetes, restorative therapies, and minimally-invasive therapy solutions8.

A consistent focus on innovation supports the company’s market dominance while generating impressive profits and improvements in patient outcomes. The company also produces high performance ventilators. Recognising the urgent global need for life-saving ventilators for the Covid-19 pandemic, Medtronic quickly moved to double its manufacturing capacity by doubling staff numbers and transitioning to 24/7 production. It has also open-sourced the design specifications for its Puritan Bennett 560 ventilator to enable an increase in global production9. Other innovations include:

  • Micra Transcatheter Pacing System, the world’s smallest pacemaker, which is delivered via a minimally invasive approach through a patient’s leg. As well as being 93% smaller than conventional pacemakers, the leadless device has a 12-year battery life10.
  • The ground-breaking MiniMed Insulin Pump is the world’s first hybrid closed loop system that could change the lives of millions suffering from type 1 diabetes. Granted FDA breakthrough status in 2019, the device mimics a healthy pancreas by constantly monitoring blood glucose levels and automatically delivering insulin as required11.  AI is then used to predict highs and lows, and maintain a smoother level throughout the day. Information is then relayed to a user’s smartphone to give intel into activities that may affect personal glucose patterns.

Medtronic uses innovation to reduce premature mortality from non-communicable diseases. In 2019, it served 75 million patients, while training 83,000 medical professionals and carrying out 279 clinical studies. The company is also raising awareness of device-delivered therapeutic solutions for pain management, instead of opioids. In FY19, the US Patent and Trademark Office named Medtronic’s haemodialysis system one of its ‘Patents for Humanity’ award winners, which honours game-changing technology for global humanitarian challenges. Used to treat chronic kidney disease, the system aims to be much smaller, cheaper and more portable than traditional systems, and requires 75% less water.


AI may be our greatest tool for improving global healthcare outcomes and Alphabet is arguably the global leader in this space. Following its 2014 acquisition of London-based DeepMind, (now Google Health), it’s been researching and building AI neural networks to advance scientific discovery and help solve real-world challenges. A recent collaboration with Moorfields Eye Hospital NHS Foundation Trust aimed to develop tools to identify 50 common eye problems, including diabetic retinopathy and age-related macular degeneration, which together affect over 100 million people worldwide12.

The challenge for hospitals is the sheer number of eye scans that need reviewing, with over 1,000 a day at Moorfields alone. Alphabet’s system uses machine learning to quickly review these images, with the algorithm now on par or better than leading consultant ophthalmologists. The same technology is also being used to review 700,000 patient records, blood tests and heart rate data points to accurately predict whether a patient will develop acute kidney injury up to 48 hours before they will actually be diagnosed13.

One in five people admitted to a hospital have acute kidney injury, and it accounts for 100,000 deaths annually in the UK14. The UK is uniquely positioned to benefit from and build businesses around AI in healthcare thanks to the NHS and its scale and access to large sets of patient data.

Portfolio holdings

Healthcare companies Areas of innovation
CSL Blood plasma therapies for rare diseases
Alphabet A AI driven healthcare solutions
Medtronic Medical technology
Johnson & Johnson Pharmaceutical therapies for non-communicable diseases
Essilor International Vision correction
Mettler-Toledo Medical research technology
Nike Consumer health products
United Health Healthcare ecosystem
Apple Wearable technology

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