• The Seville Reporters

In Focus: A Healthcare Transformation

Tech Companies in HealthCare

For the last several years I've been hearing about the biggest tech companies in the world entering the healthcare space. Since the news, I've been patiently waiting for the day when big tech's hobby becomes a legit and big contributor to the top and bottom lines. For now though, healthcare remains a side hustle with big potential for most tech companies.



Surprisingly, a tech retailer is making real headway in the healthcare space, and at the rate that it's headed, I believe its transformation into a legit healthcare provider could make this a very big winner in the long-term.


If you're not aware, Best Buy ($BBY) has entered the healthcare industry on multiple fronts. The company has a healthcare business solutions arm that is helping medical providers purchase and deliver medical equipment. Then there is the care delivery business, which looks to provide high-quality accessible care at home.


Last week Best Buy entered a deal to acquire Current Health, a leader in care-at-home technology. Through Current Health, healthcare organizations can monitor patients with data from biosensors and wearable devices.



Why This Could Be the Next Big Thing

Unfortunately, Father Time is undefeated, he eventually gets us all. If we're lucky enough, and I hope you are, we'll live to see a very ripe old age, but it is likely that in our old age we're going to need some assistance which is where Best Buy comes in.


For the tech savvy who are fortunate enough to age without having any serious medical issues and who prefer to live out their remaining days in their home, Best Buy's healthcare offering will fill a need that was typically covered by an expensive home health aid or by a family member.



Why Healthcare has Become a Battleground Industry

In 2019 Americans spent $3.8 trillion on healthcare. Since 2015 national spending on home health care services has grown by at least 5% annually. Home health spending hit $113.5 billion in 2019 according to the Centers for Medicare & Medicaid Services (CMS). Also, spending on continuing care retirement communities and nursing care facilities reached an estimated $172 billion in 2019. There is a mint of money to be made for the non-traditional healthcare company that can enter the space with tech based solutions.


A Morgan Stanley report suggested that Best Buy could generate between $11 billion and $46 billion in cumulative revenue over the next 10 to 20 years from its commercial health care business. In Best Buy's last fiscal year the company reported $47 billion in revenue, a figure that benefited from stimulus checks and pandemic spending.


I'm in agreement with the timeline from the Morgan Stanley report, the payoff for this transformation is more than a decade away.


The reason for my long term horizon is because I don't believe the current 70 to 90 year old is comfortable being monitored by tech. However, people who have been born into or have become accustomed to smart phones, social media monitoring, Zoom meetings, contactless payment processes, and self driving cars won't have an issue being babysat by technology, if they deem the technology trustworthy. Deborah Di Sanzo, the president of Best Buy Health believes the future of consumer technology is directly connected to the future of healthcare. Game changing business models typically take a while to blossom, and I have no doubt that this is game changing.