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      article by William Blair
      This piece is approved to use with clients.

      Connected Medical Devices Improving Healthcare

      By Travis Cope Research Analyst
      Aug 08, 2022

      The COVID-19 pandemic has had unprecedented implications for the healthcare sector—but with challenges have come changes, including the adoption of innovative new technology that is improving the standard of care and creating investment opportunities for active managers.

      Watch the video or read the recap below.

      The impact of the COVID-19 pandemic had unprecedented implications for the healthcare sector, and it required the adoption of innovative new technology to cope with the challenges. So let’s talk about a couple of examples of that.

       

       

      ECG Patches

      The first is ECG patches. Every year in the United States there are 5 million patients that go into the hospital to be tested for an abnormal heart rhythm or an arrythmia, and that test is called an electrocardiogram, or an ECG for short.

      Now an ECG is typically conducted with a device called a Holter monitor. The Holter monitor is sort of like a vest. It’s heavy. It’s cumbersome. It’s not at all discrete. And patients generally refuse to wear the thing for more than 24 to 48 hours at a time.

      Compounding the problems with this device—and this is probably more important in the context of COVID—is that the patient has to go into the hospital to be fitted with the device, and then they have to return to the hospital when their diagnostic course is concluded to return the device.

      Now ECG patches can deal with all of the challenges that I just mentioned. They’re very small; they’re lightweight; they’re waterproof; they’re very discrete; and patients generally just forget that they’re wearing them most of the time.

      We’re catching more heart rhythm disorders with ECG patches.

      But secondly—and this is particularly important in the context of the pandemic—the device is shipped directly to the patient’s home. It’s easily applied by the patient, and when the patient’s done with their diagnostic course, they put the device in a box and they ship it to the patch manufacturer for analysis and evaluation.

      Now consider for a moment the implications of that technological shift. Number one, we’ve reduced the burden for the patient. Number two, we’ve reduced the burden for the doctor and the healthcare system because we’re shifting patients from the hospital into the home.

      And then finally and most importantly, we’re actually improving the quality of care for that patient because the patient is inclined to wear that patch for longer than they would a Holter monitor. We’re catching more heart rhythm disorders with that device. 

      Remote Pulse Oximetry

      Another example of an important connected medical device is remote pulse oximeter. During a COVID case, especially severe COVID cases, the patient’s blood oxygen level declines precipitously, and if a doctor doesn’t identify that and intervene early, that patient is at risk of a very long recovery, lifelong complications, or worse.

      The silver lining is that we are now very rapidly adopting innovative new technology that is going to improve the standard of care.

      With remote pulse oximetry, we send that patient home with a connected oxygen sensor that can be monitored by the hospital. At the first sign of blood oxygen levels decreasing, that patient is notified and they’re brought back into the hospital for evaluation.

      Now consider the implications of this technology shift—very similar to the implications of ECG patches. Number one, reduced burden for the patient. Number two, reduced burden for the health care system. And then finally, improved quality of care. When a hospital is utilizing its resources most efficiently, the quality of care of patients in aggregate goes up.

      Unlimited Opportunities

      The net impact of the pandemic was undoubtedly negative. But if there is a silver lining, that silver lining is that we are now very rapidly adopting innovative new technology that is going to improve the standard of care in lives of everyone: doctors, nurses, patients, and their families.

      Travis Cope, partner, is a research analyst with William Blair Investment Management. 

      View Disclosure

      This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

      Information and opinions expressed are those of the authors and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC, or affiliates. Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Information is current as of the date appearing in this material only and subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. This material may include estimates, outlooks, projections, and other forward-looking statements. Due to a variety of factors, actual events may differ significantly from those presented.

      Investing involves risks, including the possible loss of principal. Equity securities may decline in value due to both real and perceived general market, economic, and industry conditions. The securities of smaller companies may be more volatile and less liquid than securities of larger companies. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks. These risks may be enhanced in emerging markets. Different investment styles may shift in and out of favor depending on market conditions. Individual securities may not perform as expected or a strategy used by the Adviser may fail to produce its intended result.

      Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit, and inflation risk. Rising interest rates generally cause bond prices to fall. High-yield, lower-rated, securities involve greater risk than higher-rated securities. Sovereign debt securities are subject to the risk that an entity may delay or refuse to pay interest or principal on its sovereign debt because of cash flow problems, insufficient foreign reserves, or political or other considerations. Derivatives may involve certain risks such as counterparty, liquidity, interest rate, market, credit, management, and the risk that a position could not be closed when most advantageous. Diversification does not ensure against loss. The inclusion of Environmental, Social and Governance (ESG) factors beyond traditional financial information in the selection of securities could result in a strategy's performance deviating from other strategies or benchmarks, depending on whether such factors are in or out of favor. ESG analysis may rely on certain values based criteria to eliminate exposures found in similar strategies or benchmarks, which could result in performance deviating.

      There can be no assurance that investment objectives will be met. Any investment or strategy mentioned herein may not be appropriate for every investor. References to specific companies are for illustrative purposes only and should not be construed as investment advice or a recommendation to buy or sell any security. Past performance is not indicative of future returns.

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