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New technologies allow the health care industry to become more efficient in fundamental monitoring, medical consultation, and reporting. The next big innovation will be the development of digital therapies. Defined, standardized procedures in the patient interaction replace or complement the prescription of conventional drugs. Disease-specific, software-based treatments of skin diseases and for psychological conditions are early examples for such a development.

These innovative forms of treatment no doubt have immense potential. But digitization of medicine also raises new questions. Hitherto unknown ethical issues are cause for discussion: who for instance would take responsibility if artificial intelligence produces a wrong diagnosis? But in any case, big data has become commonplace in surgeries and hospitals – and people increasingly are ready to voluntarily share their body data, in real time.

«Digital health is more tightly regulated than other sectors of technology»

The use of such data will become decisive in coming years. Health care companies able to utilize data available in a targeted fashion will make a great step forward. You will only succeed in the market if you manage to use new technology such as big data and artificial intelligence in a responsible manner. In any case, it would be much riskier to maintain the status quo. Technology already is revolutionizing the health care sector – and this will accentuate in the coming years. Scientific progress will accelerate and create opportunities unforeseen – not least for investors.

Digitization is a trend in health care, an industry that is less exposed to the economic cycles. A trend which deserves attention from investors interested in the long term, and prepared to take risks. The field of activity is broad and includes topics such as telemedicine, robotics, sensor technology or software for patient management. Digital health is more tightly regulated than other sectors of technology: safety and clinical benefit have to be proven through complex clinical studies. This raises the bar against potential competitors and makes technology risks more manageable. The future of medicine is digital. It will bring enormous advantages for people. Investors are well advised to look into it.

Stefan Blum is lead portfolio manager at Bellevue Asset Management. He has 15 years of experience in health care. He specializes in medical technology, diagnostics and new disruptive technologies such as big data, robotics, and DNA sequencing. Before joining Bellevue Asset Mana­gement, Blum was the responsible manager for investors at Sonova, the world's largest hearing aid producer. He has a degree in economics from the University of St. Gallen and is a graduate of AZEK, the Swiss Training Center for Investment Professionals.

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