E-health solutions have the potential to revolutionise health delivery in Australia and internationally. For Australians, some of the real benefits lie in overcoming long distances via online consultations and easing the burden of an ageing population on the health system thanks to a lower cost to serve.
With the cost of healthcare and health insurance on the rise, individuals are also staying on top of their own health status with a variety of technologies. The federal government is doing its bit, having spent $1 billion on the national myHealth electronic records system. This revolution, however, has not yet reached maturity, which means there is time for investors to benefit and these three ASX listed stocks should be top of your list.
With the resources of a top 10 ASX listed company, Telstra Corporation Ltd (ASX: TLS) could be the behemoth of Australian e-health. Although many people would be unfamiliar with Telstra’s e-health offering at this point, the company has thus far invested over $140 million in health technologies and is aiming to generate $1 billion in annual revenue from health by 2020.
Telstra is currently deploying ReadyCare, a service where patients can connect to GPs via telephone or video call and get diagnosis, prescriptions and treatment without leaving their home. It’s conceivable that this could become a large market for Telstra as the model has already proved popular overseas. In the US, more than 800,000 online patient consultations will be provided this year, according to the American Telemedicine Association (ATA). Telstra’s partner in this offering, Swiss company Medgate, already conducts approximately 4,300 consultations every day in its home market.
Telstra also has a significant stake in Australia’s number one health appointment booking system, Health Engine. The service has over 50,000 registered practices and derives revenue both from advertising and a fee charged for each booking. There is also likely to be flow on benefits for Telstra’s larger telecommunications and network applications divisions as the e-health industry utilises its products and services.
ResMed Inc. (CHESS) (ASX: RMD) is another business that is adapting to take advantage of the digital age. ResMed’s core operating business is in developing and selling machines to assist with breathing and sleeping disorders such as sleep apnoea. Two announcements late last year demonstrate how ResMed will move with the times.
The first was a tie-up with Nintendo, who the company will work with to create a new product which will likely utilise the gaming giant’s software design and user experience skills to present relevant and personalised information regarding the user’s health.
The second announcement was arguably more important, if only because it involved the world’s largest company – Apple. ResMed announced that it’s latest S+ sleep monitoring product will be compatible with the Apple HealthKit, allowing the product’s owners to see their sleep information alongside other health information from their iPhone and other connected devices. Significantly, ResMed also announced that the S+ would be sold by Apple in its stores and online. These announcements show that ResMed has embraced the future, leaving the company poised to grow its product market and market share.
A relative minnow with a market cap of just $11 million, Global Health Limited (ASX:GLH) is a riskier proposition than Telstra and ResMed, but has plenty of room to grow. Global Health sell a range of proprietary electronic patient management and health administration systems. Its customers include hospitals and health practices. The share price of the company took a battering when it lost the contract with SA Health to provide the patient management system for 64 hospitals. However, the company has been involved in the government’s e-health transition and provides access to patients’ personally controlled e-health records through its systems. This is a potential differentiator in the near term and may allow the company to grow its market share.
Motley Fool contributor Joshua Anderson owns shares of ResMed Inc. and Telstra Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.