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ROBO Global says artificial intelligence is shaping the future of health care

Health care names account for 10% of the ROBO Global Index, with a focus on robotics guidance and surgery, lab automation, genomics, and AI health care applications

A generic depiction of how AI is shaping healthcare
ROBO Global says the healthcare system is becoming 'smarter with the help of AI,' and the result will be higher quality care, lower costs, and better value

ROBO Global has released a report saying advancements in machine learning, sensing, vision, computing power and artificial intelligence are transforming health care.

ROBO Global created the ROBO Global Robotics & Automation Index, the world’s first benchmark index to track companies that focus on robotics, automation and artificial intelligence.

Senior Research Analyst Lisa Chai said that even as robot-assisted surgery was making headlines, the rest of the health care supply chain seemed stuck in a pre-AI world, but all that is finally changing.

READ: ROBO Global sees US-China trade war as rare market opportunity to invest in robotics and AI stocks

“In recent years, radiologists have begun using CT and MRI scans as early screening methods, but both tests are less than perfect, delivering both too many false positives and too many false negatives, which can delay the proper treatment of the disease,” wrote Chai.

“Advancements in AI-enabled medical imaging are changing that scenario. High-speed computer processing has driven a massive leap forward in the capabilities and quality of medical imaging,” she added.

Recent research shows that when AI and pathologists reviewed images of lymph node cells in tandem, error rates dropped from 3.5% to just 0.5%.

Battling cancer

Machine learning is used to identify patterns within high-volume data sets of genetic information. The analyst said AI tools are used to “translate these patterns into computer models” that may help predict a person’s probability of developing certain diseases, as well as “identify which targeted therapies are likely to deliver the best outcome.”

“Machine learning solutions by companies like Illumina Inc (NASDAQ:ILMN) promise to address that challenge by significantly reducing the time, cost, and effort necessary to identify an appropriate target sequence,” wrote Chai.  

“The hope is that this capability will ultimately lead to the discovery of a breakthrough treatment for various types of cancer.”

At least nine health care companies including Illumina, Intuitive Surgical (NASDAQ:ISRG), Globus Medical Inc (NYSE:GMED) and Nuance Communications Inc (NASDAQ:NUAN) with headquarters in four different countries are components of the ROBO benchmark index.

Intuitive Surgical sets gold standard

ROBO Global director of research Jeremie Capron wrote in a separate report that Intuitive Surgical was setting the “gold standard” in robotic surgery.

“As the bona fide market gorilla, the company has already garnered the lion’s share of the current market, and its track record of delivering consistent quality has created a high level of customer loyalty,” wrote Capron.

The analyst expects the total addressable market to “expand dramatically” for spinal, orthopedic, and bariatric surgeries, leaving Intuitive Surgical with plenty of room to grow.  

“We anticipate continued high-teens growth in 2019 and beyond,’ wrote Capron.

In terms of the ROBO Global Robotics & Automation Index, Intuitive Surgical is considered a “pure-play” or bellwether company in the industry. In the ROBO world pure-play stocks — companies such as Intuitive Surgical and iRobot Corp (NASDAQ:IRBT)  — have an approximate 2% weighting in the nearly 87-strong ROBO index. The hybrids are individually at about 1%.

Smarter health care system

ROBO Global says the healthcare system is "becoming smarter" with the help of AI, and the net result will be "higher quality care, lower costs, and better value."

“Veeva Systems Inc (NYSE:VEEV) is designing an advanced data analytic platform that integrates AI capabilities into the clinical workflow process,” wrote Chai.

“Elekta (OTCMKTS:EKTAY) has a solution that enables oncologists to offer remote cancer monitoring treatment and patient care. Teladoc Health Inc (NYSE:TDOC) makes it possible for patients to enjoy a “virtual doctor’s visit” via a mobile phone app. Cyrcadia Health provides AI-enabled bras for early detection of breast cancer,” she added.

Nuance also empowers physicians with computer-assisted documentation software that uses AI to provide real-time patient information and documentation details."These solutions ensure proper reimbursement processes, support compliance with regulatory requirements, and help improve quality outcomes," said ROBO Global.

Chai noted that “wearable monitoring devices” were melding telemedicine with AI and predictive analytics to “connect patients and doctors from anywhere.”

Investors can buy directly into the popular ROBO ETF based on the benchmark index comprised of around 87 top robotics, automation and AI companies.

The ROBO Global Robotics & Automation Index ETF (NYSEARCA:ROBO) traded 2% higher Tuesday at $36.72.

Contact Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter@UttaraProactive 

Quick facts: ROBO Global

Price: 48.315 USD

Market: NYSE
Market Cap: $2.69 billion

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