ETF Trends CEO Tom Lydon discussed the Global X Telemedicine & Digital Health ETF (EDOC) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
The Global X Telemedicine & Digital Health ETF (EDOC) seeks to invest in companies positioned to benefit from further advances in the field of telemedicine and digital health. This includes companies involved in Telemedicine, Health Care Analytics, Connected Health Care Devices, and Administrative Digitization.
EDOC is a new ETF theme that could benefit from the increasing trends towards a more digitized world. The Coronavirus pandemic provided a booster shot to the telemedicine and digital health sector. Now there’s high growth potential.
The fund provides exposure to companies that are well-positioned to benefit from further advances in the field of Telemedicine and Digital Health, including those involved in telemedicine, connected health care devices, health care analytics, and administrative digitization. That results in data from these devices, health applications, and other sources that can offer preventative health benefits when paired with genomic information and data from the broader health community.
The Covid Boost
Covid-19 acted as a catalyst to boost this segment. A large segment of the global population is under stay-at-home orders. Increased demand from technology-based tools that facilitate remote communication with doctors and enable patient monitoring became critical.
Some U.S. health care providers report that telehealth visits, defined as consultations in which a patient connects with a doctor via voice or video chat, increased by as much as 175x since the pandemic began. The strain the epidemic put on all aspects of the global health care system highlights broader opportunities to modernize health care by more effectively leveraging technology and digitization.
More than just a short-term growth trend, Unequal access to health care across demographics and geographies highlights opportunities for technology to expand the industry’s reach. 15.6 million excess deaths occurred in low- and middle-income countries in 2016, 55% from inadequate care, and 45% from the non-utilization of health care.
Half of the global population lacks access to essential health services. A portion of this is attributable to geographic location and physical distance from health care resources and/or professionals. Telemedicine can help expand essential care to these individuals. According to a recent survey conducted by NPR, 24% of rural adults indicated the use of telehealth, with 90% of those individuals noting satisfaction with the service.
People are living longer, and populations are getting older. Life expectancy rates grew faster from 2000 to 2016 than in any period since the 1960s. By 2100, 28% of the global population could be over the age of 60, compared to just 13% in 2017. Older populations have greater health care needs, and health care providers will need to innovate to treat those patients effectively and efficiently.
Inefficiency and stagnation in global health care systems result in sub-optimal outcomes for both health providers and patients. The OECD estimates that $1.3 trillion, or 20% of annual health care expenditures in OECD countries, comes from systemic inefficiencies that include administrative complexities, pricing failure, redundancies, and fraud.
Increased connectivity makes the delivery of virtual health services possible. Today, there are 4.6 billion active internet users globally. The FCC’s July 2020 commitment of $200M to improve rural telehealth infrastructure should prove to be a tailwind to these services, as should broader rollouts of high-speed internet and 5G technology.
As mentioned, EDOC has access to dozens of companies with high exposure to the telemedicine & digital health theme. As far as its underlying indexing criteria, the fund connects physicians and patients digitally, facilitating a range of medical activities that include diagnosis, treatment, and medication management, as well as offering online pharmaceutical services, and/or providing internet healthcare platforms (“Telemedicine”).
It also collects, produces, utilizes, and/or stores data for healthcare-related statistical and/or computational analyses, including artificial intelligence analyses and cloud-based analytics platforms (“Healthcare Analytics”).
Listen to the full podcast episode on EDOC ETF:
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