Hi, it’s Raphael from Kieger,
In June, CMS reviewed and updated its National Health Expenditure projections for the coming decade.
CMS now expects US healthcare spending to grow at a compound annual growth rate of 5.4% in this decade, soaring from 4.3 trillion USD in 2021 to a staggering 7.2 trillion USD by 2031 or nearly 20% of US GDP. This is over 2.6 times the costs of 2011.
The underlying driver for the faster growth of healthcare costs compared to the overall economy is mainly aging and is therefore well predictable.
This begs the question: How long can the US sustain such high healthcare costs growth? This is why we at Kieger have a strong investment focus on companies that offer affordable and cost-effective solutions. We believe these areas will become increasingly important as healthcare costs continue to rise.
Interested? Don’t hesitate to reach out and learn more about our approach.
This chart shows that in the US, the share of patients living to ages above 50 has increased from less than 15% to more than 50% between 1990 to 2019.
In part, this is due to more efficacious drugs which have a better safety profile. But this improvement also owes to the reduction of number of pills to take, which in turn improves compliance.
This illustrates how improving outcomes not only requires more efficacious drugs, but must also take patient behaviour into account.
What mattered this month in healthcare? The readout of the SELECT study was the single biggest healthcare event of the month. The results may open the door to wide reimbursement for GLP-1 weight-loss drugs. This led to an overreaction with significant price movements amongst many companies as markets just made blanket assumptions of a healthier, thinner world. Find out more in our monthly healthcare newsletter.
Remarkable Strides in Breast Cancer Survival: A Look at the Last Few Decades 🎗️📈 Intersted in knowing more? Check out Maria Specogna’s latest chart of the month video!
What mattered this month in healthcare? Second quarter earnings season kicked off to a strong start, with earnings overall better than estimates. However, positioning matters, and strong numbers were not always enough if expectations were high. Find out more in our monthly healthcare newsletter.