Portfolio update: healthy opportunities in the United States
Chris Waters, Senior Portfolio Analyst
1st September 2018
I was recently travelling through the United States meeting with a number of companies. We travel there regularly to spend time with the management teams of our portfolio companies and to look for new investment ideas. While there, I read a story about a family getting an $18,000 hospital bill for after coming into an ER with their baby that had fallen off a bed onto the floor. Luckily the baby was okay – and was treated with a quick nap and a bottle of formula. For that, his parents received that large bill. This reminded me of another story I had read about a $629 bill for putting a band-aid on the finger of a one year old girl. Unfortunately these stories seem far too common in the US.
The US healthcare system has evolved into an expensive and inefficient operation with many disconnected parts, no one talking to each other and a historic focus on volume of care rather than value. On the positive side, this system has introduced many innovative and lifesaving technologies to the world. All this has resulted in higher healthcare costs than anywhere in the world. US healthcare costs are now 18% of GDP and rising, while it is the only developed market to have seen life expectancy decrease in recent years (although some of this can be ascribed to the opioid epidemic – which is a whole different story).