Wealth Management: Investment Views – The Silver Economy: Understanding healthcare

William Therlin, William Haggard and Amaya Gutiérrez, Wealth Management

“The size and scale of ophthalmic and audiology markets should not be underestimated.” 

- Dominic Hollamby | Rothschild & Co's Global Advisory Head of Healthcare

Understanding healthcare

As discussed in our accompanying Investment Views podcast, Rothschild & Co's Global Advisory Head of Healthcare, Dominic Hollamby is quick to point out the distinction between discretionary healthcare services sold on the self-pay market and staple healthcare services often provided on public markets.

Silver Economy NEW - Figure 3    

Source: Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 2017.

Click the image to enlarge

Businesses offering services to public markets, such as oncology treatment for life-threatening illnesses, tend to be operating in highly regulated environments where services are provided to state entities. This market has and always will be harder for investors to navigate. By contrast, the self-pay market aimed at discretionary products such as cosmetics, is where we see the greatest potential for companies, and therefore investors seeking returns from the Silver Economy. 

As people age, two sectors in particular to mention are the ophthalmic (eyes) and audiology (hearing) markets. The size and scale of these markets should not be underestimated. With increasingly deep pockets, we see these two sub-sectors as key discretionary areas of spending for Silver Economy consumers looking to improve their quality of life.

Nevertheless, the human body has many weaknesses and companies which are positioned to help hold back the effects of ageing and improve quality of life more generally, will also prove popular with Silver Economy consumers. 

Silver Economy Podcast 

To listen to the full-length interview with Dominic Hollamby, Rothschild & Co's Global Advisory Head of Healthcare, our podcast which accompanies this publication can be accessed here

Click here to continue: Investment Views - The Silver Economy


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