| The baby boom cohort has changed the world in | | | | - Providers of mobility and other daily living assistive |
| which we live and the lens through which we view it. | | | | devices for those with a range of impaired gross or |
| The aging of this cohort (roughly one third of the | | | | fine motor skills or other mobility limitations (e.g., |
| population) will continue to usher in dramatic changes | | | | caused by pain, arthritis, joint immobility) |
| across most business sectors and areas of our lives | | | | - Pharmaceutical and biotechology innovators and |
| in the years to come. The boomer demographic in | | | | providers (care must be exercised due to patent |
| North America is also presenting unique challenges for | | | | limitations, proliferation of substitutes - generic drugs, |
| government run social programs and presenting | | | | lengthy approval processes, and other process and |
| unprecedented opportunities for businesses with the | | | | outcome risks such as the Vioxx controversy ) |
| right entrepreneurial mindsets and resources. While | | | | - Health and hospitality services outsourcing (again, |
| boomer consumptive patterns have evolved over | | | | highly contextual and requires significant demand |
| time, there are still strong correlates between their | | | | supply driver analysis, political, environmental, union |
| wants/needs (and the wants/needs of their children) | | | | non-union and other forces analysis) |
| and the flow of capital across virtually all economic | | | | - In-home healthcare services (e.g., nursing, physical |
| sectors. Clearly, as boomers are aging, their spending | | | | therapy, occupational therapy, care and support) |
| habits are evolving as well. This re-prioritization of | | | | - Medical or surgical retreats (highly specialized, |
| spending has become an area of study for | | | | significant risk) |
| governments and investment organizations alike. One | | | | - Assisted Living or Long-term Care (these resources |
| area that surfaces repeatedly and is becoming | | | | are capital intensive and targeted at the parents of |
| pre-eminent in the study of boomer consumption | | | | the boomers, i.e., the WWI babies) - it will be 20 |
| patterns is healthcare. | | | | years before boomers will require these services in |
| Healthcare is one of the industries that are most | | | | any great volume (be careful) |
| acutely impacted by this demographic shift. While | | | | - Major equipment and major/minor supplies providers |
| many boomers will continue working, many are also | | | | (e.g., MRI, CT, ultrasound through to re-useable and |
| retiring or are getting close to retirement. Most | | | | disposable equipment) |
| boomers are or still view themselves as reasonably | | | | - Providers of re-furbished medical equipment to |
| young (mentally and physically) - the oldest, born in | | | | secondary markets, which include more |
| 1946 one year after the "boys came home" from | | | | price-sensitive purchasers (e.g. re-furbished CT |
| WWII. For those of you without a calculator handy, | | | | scanner for a smaller rural hospital) |
| the oldest boomers will be 62 years of age in 2008. | | | | - Alternative medicine centers (e.g., offering |
| This small but important factoid is lost on many bullish | | | | Ayurvedic Medicine, acupuncture, traditional Chinese |
| investors who see the present time as the "halcyon | | | | Medicine) |
| days" in healthcare investment in seniors housing | | | | Since information technology is a core function in |
| options or Long-term care. Yet it will be 15 to 20 | | | | healthcare, the following is a stand alone list of |
| years before the leading edge of the boomers reach | | | | technology-related opportunities related to data |
| the age where these services will be in higher | | | | information collection and transfer: |
| demand. | | | | - Devices: quick, simple to use, portable, and ease |
| What many people, including even professional | | | | workflow in high stress healthcare environments (e.g., |
| investors, forget or never learned is that much of | | | | emergency departments, tele-health) |
| the the current demand for healthcare is being driven | | | | - Devices whose operating systems converge with |
| by WWI babies, or what has been coined The | | | | mainframe of networked systems that admit, track, |
| Greatest Generation. The Greatest Generation is | | | | audit, and generate reports with minimum input and |
| compromised of those who reached adulthood just | | | | robust rule-based error checking |
| before, and served in WWII. Many came from rural | | | | - Devices or system that integrates disparate |
| areas of Canada and the U.S. and settled in the larger | | | | healthcare network data and traffic |
| centers after the War. This generation was entirely | | | | - Devices or systems which accurately expedite |
| different than succeeding generations. While the | | | | services |
| differences are beyond the scope of this article, | | | | - Devices or systems which improve the accuracy |
| suffice to say that those who seriously study | | | | and speed of diagnosis |
| demographic shifts expect the baby boom generation | | | | - Devices or systems which improve reduce human |
| to have an entirely different set of expectations | | | | error and increase the probability of appropriate and |
| regarding healthcare service and other services than | | | | targeted treatment options |
| their parents. | | | | - Translational devices and applications of all sorts, i.e. |
| So, to recap thus far, there are a significant number | | | | translating actual "hands-on" data into useable, and |
| of opportunities in the United States and Canada in | | | | interoperable information which can be used for |
| healthcare investment; but these opportunities are | | | | diagnostic, treatment, recovery, and planning |
| not limitless and nor are they a sure bet. | | | | purposes |
| Demographic shifts are significant drivers of | | | | - Electronic dashboard technology for strategic |
| healthcare consumption patterns. It is important to | | | | decision-makers |
| attribute healthcare supply and demand drivers to the | | | | - Providers of software applications that integrate |
| market and demographic to which they rightfully | | | | disparate healthcare value chain and supply chain |
| belong. | | | | fragmentation |
| So, while healthcare investment opportunities abound, | | | | - Providers of software applications that integrate |
| there is no replacement for sound judgment based | | | | in-hospital processes (e.g., admission, discharge, |
| on analytical inquiry. This is true of any investment | | | | transfer); care-finance-payments; |
| decision. It is also key that current and projected | | | | care-supplies-payments and other A/P and A/R |
| changes across the following domains are reviewed in | | | | alignment platforms and applications |
| detail: demographics, finances, macro-economics, | | | | - Providers of software applications which refine, |
| geography, consumer attitudes and behaviours, | | | | simplify, or facilitate the care planning of patients |
| motivating factors (e.g., luxury, fear), urban/rural, | | | | - Providers of systems integration |
| SES, educational, cultural, risk orientation, and other | | | | - Providers of software applications for Human |
| personal and group-related factors. While this article | | | | Resources, CRM, Finance, and other corporate |
| zeros in on the effect that the baby boom will have | | | | functions |
| on the healthcare investment market, there are a | | | | These are a few opportunities which currently exist |
| multiplicity of other factors and population segments | | | | in the healthcare context. As you might guess, many |
| that are, and will continue to exert significant | | | | areas are being explored by larger firms. Healthcare |
| pressure on healthcare economics and consumption | | | | IT is particularly attractive to larger, more highly |
| patterns. | | | | capitalized companies and software developers. The |
| The following businesses related to healthcare | | | | competition amongst these groups is fierce due to |
| delivery are and will continue to be worthy of | | | | the large volumes of funds in healthcare and the |
| consideration by individuals, private equity, and | | | | market opportunities driven by demographics and the |
| venture capital investors. Again, it should be noted | | | | need to constantly improve system performance. To |
| that the list is only a starting point, and that | | | | date, there is no one firm with a strategic |
| investment decisions should be made on the best | | | | competitive advantage in any one area, though some |
| current and projective information possible. It will be | | | | healthcare sectors (e.g., diagnostics) have a high |
| necessary to use an array of analytical tools and | | | | concentration of highly capitalized firms (e.g., GE and |
| methods (e.g., Porter's Five Forces and other financial | | | | Siemens competing in the CT, MRI market). |
| and statistical methods and models) to assess the | | | | Whatever investment decisions you decide, the |
| industry/sector/business opportunity prior to making | | | | amount of money you risk should be in proportion to |
| a significant investment into healthcare. Having said | | | | your risk tolerance. Even "slam dunk" opportunities |
| this, potential healthcare investment opportunities | | | | can turn out to be dogs if the circumstances are not |
| exist in the following areas: | | | | right; or a context specific barrier is not weighed; or |
| - Integrated Healthcare Centers, i.e., primary care | | | | social attitudes do an about face. |
| (particularly where physician services, diagnostics | | | | If you are scanning the healthcare markets for |
| (X-ray, CT, MRI), laboratory, and pharmacy are | | | | opportunities to invest, be sure to do your due |
| delivered within a short radius) | | | | diligence and get help to investigate this complex and |
| - Providers of products & services for diabetes | | | | ever-expanding area. The due diligence you do prior |
| management, congestive heart failure, COPD, | | | | to investing significant capital is essential to ensuring |
| coronary artery disease, and other high incidence | | | | high double digit returns whilst minimizing your risk. |
| chronic diseases | | | | |