The next time you consult your physician may be by e-mail or Skype? This is a long way off for patients in Germany: First the phone call, then the diary entry, then the waiting room. And only then the consultation. Many countries are technologically so far advanced that things could be quite different. And investors are fighting for those companies that will enable medical care 2.0.

“eHealth” is the term for medicine and technology merging to the benefit of patients. Telemedicine is a broad field. As the term covers Apps that, for example, notice signs of depression. It also signifies both binary bundling of patient data and swift contact to your doctor – simply all those technologies that put the focus on the patient, swift recovery, and effective prevention.

The technological basis for this exists in many countries: powerful computers and Smartphones. And people are ready judging by their media behavior. In North America alone in 2015 over 44 million such Apps were downloaded. And the number of corresponding patients quadrupled between 2000 and 2015. A hunting ground for the big fish. For example, IBM recently received a contract from Techniker Krankenkasse (TK), Germany’s second largest health insurer, to develop an electronic patient file. This is meant to cover all patient data and also function, for example, as a binary vaccination pass. The paperless patient, if you will. Apple has since 2014 offered a service on its Smartphones that monitors data such as sleeping patterns, blood pressure and calories eaten. Then there are so-called “wearables”, such a fitness bracelets. And of course there’s the macro-topic f networking, meaning how the data move from bracelet to physician, to hospitals and to the health insurers.

The hidden deals

A huge market: The global eHealth market is expected to rise from USD 85 billion in 2014 to USD 308 billion in 2022. And solely in the field of diagnostics, the next seven years are predicted to see growth rates of 15 percent a year. A key driver here: the aging society. Because the older people get, the more medical assistance they need. Today, in the USA some 120 million people already suffer from at least one chronic disease. Precisely they can resort to e-health support that provides technology-based monitoring without time-consuming trips to the doctor.

The tech sector association “Bitkom” therefore forecasts that telemedicine will be a matter of course in a decade’s time for example as online consultations by video. Early-bird investors have realized this: Venture capital funds are already piling cash into those companies that could profit from these trends well prior to IPOs. The cash flowing into mobile-health Apps, for instance, recently hit a new high with USD 1.3 billion invested here world-wide in 2016. The sector is a zeitgeist investment not just because the trend seems irreversible, but also because each extension to the regulatory framework will speed the process up.

For example, the European Union (EU) has come up with a two-stage plan: the eHealth Action Plan 2004 -2011 followed by Plan 2012 – 2020. And things are moving in Germany, too. In 2016, the eHealth Bill was enacted, and it specifies, among other things, that the telemedicine range should be expanded. However, there is criticism: “We need a data infrastructure that is used by all players and is compatible with the countless sub-systems of the existing healthcare sector,” writes Jens Baas, CEO of TK, in an article. “The legislative must get to work here and create a legal framework so that new standards can be applied swiftly, for example, modern data protection that preserves the rights of the insures and patients while enabling rather than obstructing medical progress.” That said, the telemedicine trend is not likely to be held up by such obstacles.

eHealth is a trend that is gaining ever greater momentum owing to changes in society, and is therefore also becoming ever more interesting for investors.

werthstein giles keating thumbnail
Giles Keating

It is a global healthcare revolution. And interestingly its actually rather late to the market compared to other areas ranging from music or even automobiles which it was gone more rapidly.

Valerie Plagnol
Valérie Plagnol

ehealth is a great advance for emerging markets, with potential more affordable technologies available,  allowing doctors to make diagnosis in remote places, or reducing the cost of medical care and increasing prevention.

Zeitgeist allocation

Published on 16.03.2017

Description Instrument ISIN TER Allocation
Biotelemetry Inc Stock US0906721065 0% 10,00%
Becton Dickinson & Co Stock US0758871091 0% 9,00%
Allscripts Healthcare Solutions Inc Stock US01988P1084 0% 7,50%
Medidata Solutions Inc Stock US58471A1051 0% 7,00%
Cognizant Tech Solutions Stock US1924461023 0% 6,50%
Masimo Corp Stock US5747951003 0% 6,50%
athenahealth Inc Stock US04685W1036 0% 6,00%
Cerner Corp Stock US1567821046 0% 6,00%
Nuance Communications Inc Stock US67020Y1001 0% 6,00%
Compugroup Medical SE Stock DE0005437305 0% 5,50%
Nexus AG Stock DE0005220909 0% 5,50%
Vocera Communications Inc Stock US92857F1075 0% 5,50%
Omnicell Inc Stock US68213N1090 0% 5,00%
Teladoc Inc Stock US87918A1051 0% 5,00%
Evolent Health Inc Stock US30050B1017 0% 4,50%
Radnet Inc Stock US7504911022 0% 4,50%

Index performance since inception: 

Disclaimer: Historical returns are no guarantee for future performance. A negative development of the instruments contained in the index can lead to a negative development of the overall index. The performance shown here is indexed to a starting value of 100 and corresponds to the gross value development of the Zeitgeist, which will be reduced by the asset management fee of up to 0.85% p.a.
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