Tech Advances Could Help Healthcare ETFs Grow

New advances in technology could also make healthcare stocks and sector-related healthcare ETFs a growth opportunity.

“I expect the way consumers interact with the health care system will continue to evolve, with the demand for tech-enabled services increasing along with the sector’s focus on consumer value. Shifting to these newer services may take time for many consumers, but adoption has already begun. I’ll continue to keep my eye on companies that can help consumers make more informed health care decisions and drive down costs,” Edward Yoon, a portfolio manager and research analyst for Fidelity Investments, said in a note.

Yoon, who co-manages the Fidelity Advisor Stock Selector Mid Cap Fund, has been tracking health care equipment & services stocks, many of which are either implementing or contemplating a more consumer friendly approach.

“We’ve already seen the adoption of several innovative tech-enabled services in health care,” Yoon said. “For example, ‘telemedicine’ providers allow patients to skip a trip to the doctor’s office and receive a clinical diagnosis via mobile phone or video chat.”

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These innovative technologies have been slowly making their way into medical devices, helping to bring down costs in the healthcare industry and making it easier for patients to manage chronic conditions. As technological developments become integrated with traditional healthcare practices, the improvements may enhance efficiency and produce greater competition within the industry.

“I believe we’re in the early stages of health care consumerism, but we’re already seeing the adoption of tech-enabled services, providing a host of investment implications. For example, companies are beginning to use mobile apps to help consumers better understand and use their benefits, interact with care teams, and aggregate their clinical information,” Yoon added.