One of the biggest challenges in U.S. healthcare today is in the treatment of serious chronic conditions. In fact, the sickest 10% of citizens, those suffering from multiple chronic diseases, account for over 40% of healthcare costs and contribute to poor healthcare outcomes in our society.

Today we are seeing the potential for technology, biology and policy advancements to transform healthcare delivery in the U.S. and improve outcomes. We are in an unprecedented era of healthcare innovation. Over the last few years, I have seen dramatic examples of care improvement in areas such as mental health, at-home care for the elderly, autism care, cardiac care and cancer.

The range of treatments and technology available today is far superior to anything I’ve seen throughout my career, which has spanned over twenty years as a medical doctor and investor. Healthcare technology and the life sciences are converging, creating a breakthrough moment for expanding access to quality care and enabling the right care at the right time.

Rapid and simultaneous advances in our understanding of life sciences and information technologies for healthcare are driving this transformation. The industry has a much more advanced understanding of the human genome than it did just 10 years ago, as well as a better understanding of human behavior, allowing us to identify narrow patient populations at risk of certain conditions and provide care that fits their needs.

At the same time, we can treat previously untreatable conditions and can do so with increasing efficiency.  We now have technologies that radically improve information transparency, workflow efficiency, and patient communications. This means more effective treatments and the ability to target patients who would benefit most from them. This also allows us to personalise care to meet each patient's individual needs. For example, in cancer care, readily accessible data can identify people who carry a hereditary risk for certain cancer types and target them for early genetic screening, while some cancers can be treated with medicines tailored to the tumor’s specific genetic mutation. One example in our portfolio is Cohere Health, which leverages AI to transform the interface between payers, physician and patients from transaction management into care journey management, integrating patient data, practice guidelines, and reimbursement policy, improving outcomes and costs in parallel.

We can be confident that continued innovation will bring about many more improvements in care over the next decade.

Aligning for Optimal Outcomes

Healthcare, however, is a complex ecosystem whose stakeholders – payers, providers, patients, and policymakers – may not always be aligned to achieve optimal outcomes.

It is therefore crucial that healthcare investors and innovators identify technologies and business models that meet the needs of these disparate interests. Where we find these windows of opportunity, such as in telemedicine for mental health, we can maximise the impact of our capital. To identify these opportunities, we need to examine the intersection of care quality and cost-effective solutions that deliver win-wins for all stakeholders.

The healthcare sector is often closely scrutinised, and we welcome this accountability. That’s why we’re involved with the Duke Margolis Capital Impact Council. The Council’s aim is to develop strategies, tools, and frameworks to enable the private investment community to demonstrate and deliver measurable benefits for health outcomes, access, affordability, and community resilience. By working with the Council, Temasek is able to advance the use of evidence and best practices through measurable health value improvements which are driven by private investment in health care. This approach ensures the alignment of investor and societal interests and improves the standard of patient care.

Through the Health Value Return on Investment framework, we have already identified several areas for win-win investments, including the areas of kidney care, elderly care, and oncology care. WelbeHealth is a case in point. This company takes full responsibility for the care of elders as they continue to live in their own communities, making WelbeHealth both payer and provider. The arrangement incentivises the company to take a particularly proactive and holistic approach to care, preventing and treating issues early to improve well-being and avoid unnecessary hospitalisations.

We are confident that this is the right direction for healthcare in the future.

Grounds for optimism

Getting value-based healthcare right is a pressing prerogative in a country with an aging population who will increasingly need support. By 2040, over 78 million Americans – or one in five people - will be aged 65 or older. At Temasek, longer lifespans is one of four key trends guiding our portfolio management. We understand the challenges and opportunities associated with living longer, including an increased demand for healthcare and wellbeing – and use our capital to help develop solutions to meet this demand.

We are committed to long-term investment in companies as they innovate in the healthcare sector, and especially as they implement value-based care at scale.

Shared values and the power of innovation: these are compelling grounds for optimism as we work together to improve healthcare outcomes. I feel privileged to play a role in addressing one of the defining challenges of the 21^st century, at a pivotal moment for progress.