On the Hunt for... Robots!
We're delving into another pain point tied to our Aging of the Population strategy.
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As you know, one of the key tenets of our Aging of the Population strategy is the coming “Silver Tsunami” and the ensuing pain points brought on by that demographic shift. Indeed, those are at the heart of our owning shares of LabCorp (LH) and Welltower (WELL) in the Pro Portfolio. But there are other pain points outside of increased medical testing and the senior housing shortage. One of them is the shortage of physicians, nurses, and surgeons.
Per the Association of American Medical Colleges (AAMC), there's expected to be a shortage of 13,500 to 86,000 physicians by 2036. Even worse, 10,000 to 19,900 individuals, or as much as 74% of the total shortfall, would be surgeons. As the AAMC also noted, “an aging population facing a growing burden of chronic diseases, such as cardiovascular disease, cancer, obesity, and diabetes — diseases that often require surgical treatment — has increased the demand for physicians, and especially surgeons.”
To that, we can add the following from the United Nations — people aged 65 years and above will grow from 10% of the global population in 2022 to 16% by 2050, expanding the pool of patients requiring joint replacement surgeries. What are the most affected joints, you ask? Knees followed by hips.
Rising demand for surgeries as the aging demographic shift unfolds, and an expected shortage of surgeons, is a combination that has us looking for potential solutions.
One avenue we are starting to examine is robotics.
Why?
For starters, the American Academy of Orthopaedic Surgeons sees that about 50% of Total Knee Arthroplasty (TKA) will be performed robotically by 2030. And so we are on the same page here, TKA is a surgical procedure where the damaged cartilage and bone in the knee joint are replaced with artificial components (prosthetics). This procedure is typically performed to relieve pain and improve mobility in patients with severe knee arthritis.
Second, the global surgical robotics market is forecasted to grow at a compound annual rate of 12.4% from 2025 to 2030, driven by the increasing adoption of minimally invasive procedures.
Major orthopedic robot companies include Stryker (SYK) , Medtronic (MDT) , and Zimmer Biomet (ZBH) , which are known for their systems used in joint replacement and spine surgeries. But there are others in the mix, including Johnson & Johnson (JNJ) , Smith & Nephew (SNN), and Intuitive Surgical (ISRG) . Not all these companies, like Johnson & Johnson, generate a meaningful percentage of their revenue and profits from surgical robotics, and that means we will have to pore through those listed above and others to isolate the ones that do. That will be step one in identifying potential contenders for the Bullpen.
As we make progress on this front, we’ll be sharing that progress with you and eventually a short list of contenders for the Bullpen.
More to come.
At the time of publication, TheStreet Pro Portfolio was long LH and WELL.
