Healthcare is undergoing a structural transformation. For decades, care has been episodic: diagnose, treat, discharge and repeat when symptoms return.

That reactive model is steadily giving way to something fundamentally different: continuous, predictive, data-driven care.
Instead of waiting for deterioration, health systems are moving toward real-time monitoring, algorithmic triage, precision therapies, and AI-enabled workflows that anticipate risk before it becomes a crisis. This is not just incremental innovation; it is an architectural rewrite of how care is delivered. And it is being powered by the convergence of artificial intelligence, advanced diagnostics, robotics, wearables, and genomics.

As these technologies move from research environments into real clinical deployment, a new generation of healthcare companies is emerging at the intersection of medicine and machine intelligence. AI-driven healthcare companies are already delivering measurable clinical and research outcomes: faster diagnoses, more targeted therapies, reduced error rates, and accelerating regulatory approvals.
These companies are also generating real-world revenue growth. Yet many still trade at valuations shaped by traditional healthcare sector assumptions rather than the AI-enabled growth profiles their businesses increasingly resemble.

As the line between “healthcare company” and “AI company” continues to blur, the frameworks investors use to evaluate these businesses may evolve as well.

The Demographic Imperative

The catalyst is as much demographic as technological.

By 2030, 1 in 6 people globally will be over age 60, according to the World Health Organization. [1] Recent U.S. Census Bureau projections indicate that by around 2035, adults age 65 and older will outnumber children for the first time in U.S. history, a shift already evident in many states and counties. [2] Meanwhile, the global healthcare workforce shortage is projected to reach 10 million workers by 2030. [3] The math does not work under today’s care model.

As Wyatt Newman, PhD, Professor of Humanoid Robotics & AI, notes:

“The intersection of humanoid robotics and healthcare addresses a critical demographic challenge: providing dignified, consistent care for an aging population.”

Rising longevity, chronic disease prevalence, clinician burnout, and cost inflation are creating  structural strain. The solutions emerging are equally structural.

Four Pillars Reshaping Care Delivery

1. Agentic AI*: From Insight to Execution

Healthcare AI is evolving beyond prediction into action.

Early systems simply flagged risk. Next-generation “agentic AI” systems initiate workflows autonomously: drafting referrals, scheduling follow-ups, ordering labs, summarizing patient histories, and flagging abnormalities in real-time imaging. Digital twin models are emerging that simulate potential patient outcomes before treatments are prescribed enabling scenario modeling rather than reactive intervention.

The potential financial implications are substantial:

• An estimated 795,000 Americans die or are permanently disabled by diagnostic errors each year across all clinical settings. [4]
• AI applications could generate $150–$360 billion in annual healthcare savings in the U.S., according to McKinsey. [5][6]
• Generative AI adoption in healthcare is accelerating, with enterprise deployments expected to double year-over-year in early adoption phases (ROBO 2026 Outlook & Trends Report).

AI is not replacing clinicians, it’s reducing cognitive overload and administrative burden which are the two main drivers of burnout.

2. Smarter Wearables & the Rise of the Virtual Hospital

Wearables are evolving beyond just step counters into clinical-grade diagnostic tools.

The next phase is Edge AI, which is artificial intelligence embedded directly in medical devices and wearables that processes data locally, enabling real-time clinical alerts for events such as arrhythmias or stroke indicators before seamlessly syncing insights with hospital systems, reducing reliance on cloud-based infrastructure.

This enables a “Virtual Hospital” model with key benefits like continuous patient monitoring, automated risk escalation, and care plan adjustments without requiring in-person visits.

We believe the scale of opportunity is potentially significant:

• The global “IoT* in Healthcare” market was valued at $221.08 billion in 2025 and is projected to grow from $278.87 billion in 2026 to $946.09 billion in 2034. [7]
• Remote patient monitoring programs have demonstrated up to 50% reductions in hospital readmissions for chronic care populations in certain implementations. [8]
• Cardiovascular AI-enabled wearables have already identified previously undiagnosed atrial fibrillation in large-scale trials.

This shifts care from hospital-centered to home-centered without sacrificing clinical oversight.

3. Robotic Assisted & Remote Surgery

Surgical robotics is entering its next phase - one that is more precise, modular, data-integrated, and (eventually) remote. Robotic systems now enable microsurgical procedures on delicate nerves, ocular tissues, and vascular structures that challenge even elite surgeons.
The global surgical robotics market is projected to grow at ~16% CAGR (Compound Annual Growth Rate)* through 2030, driven by demand for minimally invasive procedures. [9] Industry projections suggest that within a decade, the majority of keyhole procedures in developed markets may involve robotic assistance. Meanwhile, 5G-enabled telesurgery has demonstrated the feasibility of real-time remote procedures, potentially expanding access to top-tier specialists beyond major urban centers.

4. Genomics & Precision Therapies

Genomic sequencing has crossed an economic threshold. The cost of sequencing a human genome has fallen from nearly $100 million in 2001 to roughly $200–$600 today, depending on scale and provider.

That cost collapse unlocks population-scale precision medicine:

• Early identification of cancer markers
• Targeted oncology therapies
• Pharmacogenomics-guided drug selection
• Rare disease detection

Targeted specialty medicines are projected to account for 43% of global drug spending by 2028 and over 55% in developed markets. [10] The shift is profound: from generalized treatment protocols to molecular-level intervention.

Technology Augments, It Does Not Replace

Despite rapid innovation, healthcare remains deeply human.

As Illah Nourbakhsh, PhD, Professor of Robotics and Director of CREATE Lab at Carnegie Mellon (and ROBO Global Strategic Advisor) observes:

“High-touch healthcare fields such as nursing, elder care, physical therapy won't disappear regardless of AI advances. These professions depend on continuous, refined human interaction that technology augments rather than replaces.”

The most successful AI deployments are emerging as force multipliers:

• Automating documentation
• Enhancing imaging accuracy
• Reducing diagnostic errors
• Allowing clinicians to focus on patient interaction

The goal is not fewer clinicians; it is more effective clinicians.

Companies Driving the Shift

We believe several companies within the ROBO Global Healthcare Technology & Innovation ETF (HTEC) illustrate this transformation.

• Guardant Health – Liquid biopsy tests that detect cancer via non-invasive blood sampling, enabling earlier intervention.
• Tempus – AI-driven clinical data analytics advancing personalized oncology and research applications.
• Illumina – A leader in next-generation sequencing technology driving the economics of population-scale genomics.
• Siemens Healthineers – Advanced MRI and imaging systems supporting preventive and precision medicine initiatives.

These companies span diagnostics, AI infrastructure, genomic sequencing, and medical devices, the enabling layers of the new care model.

Investment Implications

Healthcare is undergoing a technological transformation driven by advances in artificial intelligence, robotics, genomics, and connected medical devices. Rapid improvements in computing power, declining genomic sequencing costs, and expanding healthcare data ecosystems are accelerating the real-world deployment of these technologies across diagnostics, treatment development, and surgical care. Increasingly, these innovations are not evolving independently but converging into integrated platforms capable of reshaping how healthcare is delivered and scaled.

This convergence is creating multiple layers of opportunity across the healthcare technology ecosystem:

• Infrastructure enablers supporting healthcare data and compute
• Diagnostic innovators applying AI to earlier and more accurate detection
• Precision therapy developers leveraging genomic insights
• Surgical robotics leaders expanding automation in the operating room
• Data and AI platforms enabling scalable healthcare intelligence

Many of the companies enabling this transformation span multiple industries and may be underrepresented in traditional healthcare allocations.

The ROBO Global Healthcare Technology & Innovation ETF (HTEC) seeks to provide exposure to the companies enabling this transformation, from diagnostic innovators and genomic leaders to surgical robotics and AI-driven platforms, positioning investors to participate in the emerging healthcare technology ecosystem.

For current holdings click HERE. Holdings subject to change.

Definitions: 
* Agentic AI refers to artificial intelligence systems capable of autonomously planning and executing multi-step actions to achieve defined goals, moving beyond prediction to real-world workflow execution.
* The Internet of Things (IoT) refers to connected medical devices and wearables that continuously collect and transmit patient data, enabling real-time monitoring and more proactive care delivery.
*CAGR (Compounding Annual Growth Rate) is the steady annual growth rate that would take a starting value to an ending value over a given time period, assuming reinvestment and compounding.

Sources:
[1] World Health Organization, Ageing and Health (Geneva: World Health Organization, 2025).
[2] U.S. Census Bureau, Older Adults Outnumber Children in 11 States and Nearly Half of U.S. Counties, news release, 2025.
[3] World Health Organization, Health Workforce Support and Safeguards List 2023 (Geneva: World Health Organization, 2023).
[4] Johns Hopkins Medicine. Report Highlights Public Health Impact of Serious Harms from Diagnostic Error in U.S. July 17, 2023.
[5] McKinsey & Company, The Economic Potential of Generative AI: The Next Productivity Frontier (New York: McKinsey & Company, 2023).
[6] McKinsey & Company, The Future of AI in Healthcare: Generative AI and Beyond (New York: McKinsey Health Institute, 2023).
[7] Fortune Business Insights, Internet of Things (IoT) in Healthcare Market Size, Share & Industry Analysis… Regional Forecast, 2026–2034, last updated February 23, 2026.
[8] Vozo Health, “Can Remote Patient Monitoring Cut Readmissions by 50%?” company case study, 2023.
[9] MarketsandMarkets, Surgical Robots Market – Global Forecast to 2030 (Northbrook, IL: MarketsandMarkets Research Private Ltd., 2023).
[10] IQVIA Institute for Human Data Science, The Global Use of Medicines 2024: Outlook to 2028 (Parsippany, NJ: IQVIA Institute, 2024).