Insights

ASX healthcare shares could be next to be hit by the digital disruption

You might think ASX healthcare shares would be among the most insulated from the digital disruption, but that view doesn’t gel with all experts.
The post ASX healthcare shares could be next to be hit by the digital disruption appeared first on The Motley Fool Australia. –

ASX healthcare digital disruption woman has medical consultation appointment video video call with her doctor.

You might think ASX healthcare shares would be among the most insulated from the digital disruption, but that view doesn’t gel with all experts.

In fact, some are predicting that the healthcare sector could be next to be shaken by the digital and online revolution, reported the Australian Financial Review.

The news may worry many investors holding ASX healthcare shares. They only need to look at the media and retail sectors to see how significant the impact of this may be.

ASX medical shares and the digital disruption

The idea that some medical services could be heading online and away from brick-and-mortar outlets isn’t that preposterous. COVID-19 proved the benefits of telemedicine.

But before you equate the Myer Holdings Ltd (ASX: MYR) share price with the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price, Sonic Healthcare Limited (ASX: SHL) share price or Healius Ltd (ASX: HLS) share price, consider these points.

The experts quoted in the AFR article spoke more about data collection than visits to doctors or hospitals.

More about data than visitation

The idea is that the pooling of non-identifiable patient data could help medical practitioners and patients make more informed decisions.

Such stats might be useful for Monash IVF Group Ltd (ASX: MVF) for instance where statistics could help improve the chances of a successful treatment.

But change never comes easy. This is especially so for the medical fraternity as these professionals are trained to avoid risk and to stick to tried and proven methods.

What’s needed to drive the digital change

The factor that could counteract the resistance for change is cost savings. This is one of the largest expenditure items for federal and state governments.

This provides a big incentive to embrace digital technologies, especially during these times when government budgets have blown out due to the pandemic.

If consumers believe that the digital disruption will also help them cut their bills, including health insurance bills, and speed up treatments, they could also be a powerful push factor.

Needless to say, the Medibank Private Ltd (ASX: MPL) share price and NIB Holdings Limited (ASX: NHF) share price would welcome anything that bolsters their margins.

Real risk to earnings from digital disruption

On the other hand, if digital medicine does lower costs, medical facility owners could feel the squeeze in parts of their operations.

Even if margins stay constant on a percentage of sales basis, profits will drop as the top-line drops.

Further, the digital revolution will provide opportunities for new rivals to challenge and beat the incumbents. We don’t need to list any examples here.

But there’s no need for ASX investors to panic. Even if there is a greater acceptance of telemedicine, changes come slowly. It took years for digital alternatives to dislodge newspapers and brick and mortar retailers.

This gives the sector precious reaction time to pivot and adapt.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Brendon Lau owns shares of Sonic Healthcare Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia has recommended NIB Holdings Limited, Ramsay Health Care Limited, and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX healthcare shares could be next to be hit by the digital disruption appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!