Healthcare Hot Topics - May 2023

ChatGPT has proven that it can deliver information in a rapid and well-structured manner, but how well does it work from a health and care perspective? AI has the potential to revolutionise health care and make it more efficient by improving diagnostics however, chances are it will never replace physicians. Algorithms perform relatively well on knowledge-based tests despite the lack of domain-specific training. In their analysis of the future of employment, Frey and Osborne estimate that, while the probability of administrative health care jobs automation is relatively high, the probability of automating the jobs of physicians and surgeons is less than 0.5%. Therefore, they concluded that the potential of AI in healthcare is not about replacing physicians, so much as increasing physicians’ efficacy by redistributing their workload. A recent study has claimed that ChatGPT may produce more empathetic responses than doctors to questions from patients. A team of healthcare professionals read 195 responses to patient questions from social media and rated the answers from the chatbot more highly than those provided by doctors. The study’s authors from the University of California concluded in JAMA Internal Medicine that further research should be done on whether AI assistants can help doctors in workflow and drafting responses. The biggest limitation on both the patient and clinician side, however, is the risk that inaccurate information could be included in a response.

Medical device sales are expected to grow rapidly over the next decade. The global medtech market was worth over USD 500 billion in revenues in 2022 and is expected to reach USD 719 billion by 2029. As the sector grows, there is increasing emphasis on how medtech companies approach environmental, social and governance (ESG). According to a new Bain survey of procurement decision makers, several factors are “quickly becoming key purchasing criteria for healthcare providers”. Companies that Bain is working with now expect to include material use, waste and circularity, and air quality in their purchasing criteria. Medtech buyers are now considering these factors when looking at a third-party supplier. The pace of change is predicted to be even faster in Europe, particularly in Germany, where providers are increasingly concerned with factors such as, a suppliers’ material waste; fair sourcing; and carbon and other greenhouse gas emissions. Regardless of region, ESG initiatives that provide tangible value—such as implementing circularity practices, boosting energy efficiency, and reducing packaging—have the strongest potential to resonate with customers.

The Scottish government has published its first-ever data strategy for health and social care. This strategy sets out how the government aims to improve the way that people access their own data, which they can use it to improve their health and wellbeing. The strategy is a five-year plan, with the intention that it will adapt and respond to any new data challenges that arise. The focus is on both health and social care data, and the complex challenges with different systems, varying levels of digital maturity and digital skills between organisations. It sets out eight key priority areas, including: ethical approaches of data; protecting and sharing data; information standards and interoperability; and creating insights from data. Combined with Scotland’s Strategy for Care in the Digital Age, this strategy contributes to the government's vision to improve the care and wellbeing of people in Scotland by making best use of digital technologies in the design and delivery of services.

The concept of virtual wards was developed in the early 2000s and is now in place in many parts of England, supporting people with a range of types of care. Virtual wards took off during the Covid pandemic, as many people prefer to receive medical care and advice from the comfort of their own home. Virtual primary and secondary care appointments are now part of the health ecosystem and virtual ward companies are being invested in with new vigour. Companies including Huma, Dignio, Feebris, and Docobo are some of the operators ready to expand at the request of Integrated Care Boards. BT Group has recently announced the launch of its virtual wards programme. This follows research by the company, which found that 74% of NHS staff agree that technology helps to deliver better quality care, while the current standard of technology at work is a source of stress for 49 per cent. BT has partnered with healthcare technology companies including Feebris, who use AI to enable community healthcare professionals and patients to capture reliable health information in real time and assess the risk of conditions worsening quickly. NHS research has cited the benefits of virtual ward care, including a 50 per cent reduction in re-admission rate, £1,047 in estimated savings per patient when using a virtual ward, while 94 per cent of patients felt more confident about being able to manage their condition from home.

The Medicines and Healthcare products Regulatory Agency (MHRA) first published its Patient Involvement Strategy in October 2021. The strategy was informed through extensive consultation with patients on what was important to them. The Independent Medicines and Medical Devices Safety Review also provided clear direction on where the MHRA could improve its engagement with patients. The latest update of its Patient Involvement Strategy discusses the changes that have been made so far. A pilot Patient and Public Reference Group was set up to ensure patient involvement is integral to how the Innovative Licensing and Access Pathway (ILAP) operates. The group provides expertise and insight from the patient perspective and members sit on the ILAP Steering Group. This group reviews the applications from medicine developers to access the ILAP. Between October 2021-September 2022, patients reviewed 57 applications, contributing to the decision as to whether to accept an application onto the pathway. The MHRA has also committed to widening access to medicines for the benefit of public health when it is safe to do so. It seeks input from patients in the reclassification process, through stakeholder meetings and through public consultations. An example of this is when members of the public informed the MHRA's decision to reclassify Gina 10 microgram vaginal tablets. It was previously available only on prescription and is now available from pharmacies. The Patient Involvement Strategy sets out the MHRA's aims over the next three years. A priority is to develop the underlying guidelines and processes to expand patient engagement safely and ethically in its work. It plans to tailor the guidelines to ensure the needs of different parts of the population can be included.

The UK government's Spring Budget 2023 highlighted life sciences as a high growth sector for the government. The government has acknowledged that encouraging investment in this sector will support the UK’s aim to capture a share of the growing global life sciences market. The budget also announced an accelerated MHRA approvals process in 2024 for the most impactful new medicines and technologies. This is hoped to make the UK a ‘go to’ place for clinical research with expedited regulatory submissions. Both measures, when they are implemented will be welcome news to life sciences companies that face costs for multiple submissions for approvals of their innovative products. The budget further noted that the East West Rail line linking Oxford and Cambridge will further support growth in this sector. The government will confirm the route for the Bedford-Cambridge section in May 2023 and provide funding to support local economic growth around new stations. It was also confirmed that an increase in lab space and commercial development is vital to the needs of the sector. The government will provide further details for supporting growth in this area following the recent National Planning Policy Framework consultation. There was also confirmation that the government is launching a refocused Investment Zones programme to stimulate 12 high-potential knowledge-intensive growth clusters across the UK, which will include four high-potential knowledge-intensive growth clusters in Scotland, Wales and Northern Ireland. Each of the clusters will focus on driving growth in one or more of the major future sectors such as green industries, digital technologies, life sciences, creative industries and advanced manufacturing. This programme also aims to attract investment into areas that have underperformed economically.

A recent report from healthcare investor Downing LLP, Emerging Trends in Social Care Investing, highlights how institutions are increasingly recognising the role of private capital in providing care. Research based on interviews with 50 UK pension funds that are collectively responsible for around £102bn in assets under management found 84% expect institutional investors to increase their exposure to the social care sector. It also found that almost nine out of 10 institutional investors believe commitment from local authorities and governments to social care provision assets demonstrates strong defensive attributes. However, according to Downing, institutions entering the market need to develop a comprehensive understanding of the care sector. The main reason for institutional investment in the sector is a shortfall in public funding. This gap is now being increasingly occupied by private capital.

UK healthcare markets have remained strong and continue to draw the attention of both domestic and global capital, according to the latest report from Knight Frank, Healthcare capital markets. Demographics, long-term income and ESG credentials, have continued to play an important role in making the case for healthcare. In 2022, transaction volumes closed at approximately £2.4 billion. This indicates a continued confidence in the sector. Overseas capital accounted for 31% of transaction volume, which is a combination of both European and North American capital. Considering the wider shocks felt by other commercial real estate classes in the last year, the sector’s stability and return potential is even more significant. The overall outlook for the healthcare sector can be considered positive, and Knight Frank predicts an active market for care assets this year.