Investing in Technology for Better Health: USA vs UK
The U.S. is a world outlier when it comes to healthcare spending.
With around $14,423 spent per capita in 2023, the USA spends more on healthcare than any country in the world. The UK by comparison spends only £3,085 per capita. But as the UK’s National Health Service (NHS) experiences the ‘worst crisis in its 75-year history’ and the USA has the lowest life expectancy among high-income countries as well as the highest rates of avoidable deaths, how well is that investment being used?
HealthTech generally refers to the implementation of technology to enhance healthcare delivery, improve patient outcomes, and optimise healthcare systems.
Technology in most industries is implemented to drive efficiencies and create savings long term, however for many businesses the initial investment can be a hard pill to swallow, and healthcare is no different. Budgets are already stretched and with a bumper election year in 2024, governments in both the USA and the UK will be hedging their bets on spending priorities. Whilst policy continuity will mostly prevail there will be delays to initiatives and short-term shifts in spending. Similarly in emerging markets, increased debt rollover challenges will result in strained government health budgets.
In the UK, it’s difficult to say where the technology investment trends are as the publicly funded NHS operates across 215 ‘trusts’ that don’t share the same infrastructure; the focus here is often on back-office solutions for administration rather than on health outcomes.
Thanks to the funding models, health technology investment in the USA is much clearer. According to a 2023 survey from Deloitte Insights, investors have shifted away from telemedicine and towards “hands-on care delivery approaches and value-based care solutions”. Similarly to the UK, back-office solutions that show quick return on investment are still appealing, but there are now a wave of start-ups tackling these investment opportunities with a platform-enabled ecosystem approach which will ultimately improve patient experiences.
Of course, healthcare spending can’t be discussed without acknowledgement of COVID-19. The pandemic had a significant impact on global healthcare infrastructure, pushing it to its limits. However even before the pandemic, days off work from sickness cost £18bn in the UK and $225bn in the USA. In addition to stress and musculoskeletal issues, the most common causes for being off sick from work are minor illnesses like cold, flu and other respiratory infections. Respiratory issues are on the rise in both countries with both the CDC and ONS citing decreased immunity as a concern alongside increased exposure to pollutants.
The cost of COVID-19
Air pollution
Climate change activists have long been advocating for the reduction of fossil fuels and other pollutants to mitigate the effects of climate change on our people and planet. But there has been arguably less discussion around the impact of pollution on our nations’ health. In recent years cities worldwide have seen dangerous increases in particulate matter (PM2.5), nitrogen dioxide (NO2), sulphur dioxide (SO2) and ammonia, due to increased traffic, industrial activity and agricultural emissions, with levels set to continue rising.
In the UK, its analysts estimate that around 48,625 adults die prematurely each year due to particulate matter pollution. Exposure to air pollutants like NO2 and PM2.5 is associated with various health problems, including respiratory and cardiovascular diseases. Ground-level ozone, another pollutant formed by reactions between VOCs and NOx, also pose health risks, particularly affecting respiratory health.
The rise in airborne threat awareness has now brought the quality of indoor, as well as outdoor, air under intense scrutiny. People spend roughly 80% to 90% of their time in buildings where the average human gets roughly 50% of their exposure to external pollutants (via building air handling systems); and where pollutant concentrations are often two to five times higher than those outdoors. Therefore, improving indoor air quality (IAQ) is imperative to reducing the risk of respiratory conditions, allergies and other health problems.
Governments are now focusing on regulating IAQ with a focus on human health, but the challenge of managing air quality is also linked to the energy transition. A majority of the common forms of air pollution are associated with fossil fuel combustion, and around 13% of the world’s carbon footprint is attributable to such energy consumption by buildings’ air handling systems conditioning ‘fresh’ air to be comfortable for human occupancy.
Economic Impact
Poor air quality has a significant economic impact, costing the UK economy billions of pounds annually in healthcare expenses and lost productivity. For instance, the NHS and social care system are expected to incur costs of approximately £1.69 billion between 2017 and 2025 specifically due to PM2.5 and NO2 pollution.
Mitigation Efforts
WHO guidelines state that annual average concentrations of PM2.5 should not exceed 5 µg/m3, while 24-hour average exposures should not exceed 15 µg/m3 more than 3 - 4 days per year.
Whilst the UK government has implemented some regulations (Air Quality Standards Regulations 2010) to curb emissions, more stringent measures, particularly in the agricultural sector, are needed to achieve substantial reductions in air pollution.
In the USA, the Clean Air Act was established in 1970, and the reductions in air pollution directly attributable to it are a major success story in the realm of air pollution policymaking. In terms of cost-benefit analysis, the Clean Air Act has saved the USA’s economy over $2 trillion and has only cost around $65 billion. Outside of economic benefits, the Clean Air Act Amendments prevented an estimated 230,000 premature deaths in 2020.
Enter, Pathogen Reduction Solutions Ltd
Pathogen Reduction Solutions Ltd (PRS) was established in 2020, in the midst of the pandemic, by a group of scientists and engineers in the UK and US who felt it was their duty to come up with a solution to eliminate pathogens from buildings. The business has done just that, with a proprietary, multi-patented optical cavity technology using high-intensity UVC light.
Tested on live viruses such as flu, measles, and SARS-CoV-2, as well as bacteria and moulds, the technology addresses the quality of internal and external air and kills pathogens in a single pass. The system can be easily retrofitted into an existing air handling system or incorporated in a new build, in both cases for the effective life of the building.
CEO and Founder, Ian Sinclair says, “we have the best technology in the world for removing airborne pathogens from buildings”. Ian states that much of the air in public spaces and hospitals is not fresh air. In most major metropolitan areas, it is carcinogenic air being introduced in from outside.
“Not only does our solution reduce the risk of occupant cross contamination from airborne pathogens, it also conserves energy. Because our system enables safe recirculation of air in the building, it reduces the need for air conditioning – heating, cooling, dehumidifying, etc. – which significantly reduces the building’s energy requirements and supports energy conservation on a global scale.”
We asked why PRS’s solution was different from standard air handling systems. “Usually, air handling systems push the air through a physical filter, you have to use a huge amount of energy, and because those filters are so fine, you collect about 70% of the pathogens. But then to remove the filter, you have to be fully kitted up with a bunny suit, which is then disposed of. The filter goes into landfill, and so on... you’re not solving the problem, you’re just shifting it. The solution we have created applies UVC light and an intense bombardment of photons to destroy viruses, bacteria and moulds in a single pass through the cavity, when the residence time is 0.1 to 0.2 seconds.”
It's understandable that many organisations focus on health technology in the form of medical devices or back-office solutions. Stripping the problem back to the building itself seems too simple. The old adage looks to be true; the simplest solution is often the best. With the ever-present pressure of budgets and return on investment questions, a PRS solution is an easy win: the results are immediate – healthier people, less strain on staff, and a huge reduction in airborne-related infections.
Energy cost savings, when combined with other likely economic benefits such as reduced absenteeism and higher productivity, produce ROIs typically in the 50%+ range. Operators can expect installation costs to be recouped within two years, with such savings continuing for the life of the building.
From an energy conservation perspective, the cost saving is impressive. An average office building could see a 10-30% decrease in energy costs for their heating and cooling whilst also improving indoor air quality. The wider impact on global warming could be even greater, PRS’s Ian Sinclair predicts a possible 2% reduction in global fossil fuels if PRS, or similarly performing technologies, were in place.
Impact of removing airborne disease from public buildings
Clearly the removal of such diseases from public buildings would have a transformative effect on a nation’s health.
In hospitals, there would be a drastic reduction in hospital-acquired infections (HAIs) such as tuberculosis and influenza, and patients with compromised immune systems would likely experience better outcomes and faster recovery times. Lowering the risk of infection for healthcare workers would also be a considerable bonus, while physical capacity constraints (e.g., related to hospital bed spacing to manage cross-contamination during the pandemic) could be eased and more people timely treated.
The CDC states that HAIs cost US hospitals at least $28.4bn a year. The installation of a system like PRS will significantly reduce the costs associated with infection control, and subsequent treatment and extended stays, allowing savings to be redirected to other areas of improvement such as facility upgrades, training or research.
We can’t know for certain what the impact of a PRS solution would have been had a hospital had it installed during the COVID-19 pandemic, but we do know that the burden on hospitals was huge. With a PRS solution, the precautions of PPE and isolation wards would not be necessary in an airborne disease outbreak, and therefore the usual services and capacity may have been able to run uninterrupted.
In office spaces there is a duty of care for owners to take reasonable measures to prevent harm, and with recent shifts towards hybrid working, companies are feeling the need to make office spaces appealing. PRS has documented cases of hay fever and asthma sufferers in London who have seen near immediate relief working in an environment with their solution was installed – a potential game changer for anyone with chronic respiratory issues and allergies.
Some still debate the risk of cross-contamination through airborne pathogens. The WHO, CDC, and other such health expert organizations charged with understanding this risk, have clearly recognised and documented this risk based upon data collected from around the world. One prominent case in point involved the last person to die of smallpox, Janet Evans. In 1978 Ms. Evans was working two floors above the lab at Birmingham Medical Institute where the virus was stored, but it became airborne and got into the air handling system, ultimately killing her.
From an energy conservation perspective, the cost saving is impressive. An average office building could see a 10-30% decrease in energy costs for their heating and cooling whilst also improving indoor air quality and reducing occupants’ exposure to often harmful external gases. The wider impact on global warming could be even greater, PRS’s Ian Sinclair predicts a possible 2% reduction in global fossil fuels if PRS, or similarly performing technologies, were in place.
Legislating for change
Whilst ultimately the reduction of fossil fuel use, our encroachment on natural habitats, and the reversal of climate change, are the keys to cleaning up our air, installation of systems like PRS in public buildings and offices could go a long way in improving health and safety, and legislating to include these systems would have a huge impact.
Whilst the London Market doesn’t tend to include warranties in policy language, underwriters could begin to stipulate the PRS system’s usage as a basis for favourable terms and pricing due to the asset being a ‘better risk’, similar to having telematics in a car to monitor driving with it ensuing favourable impact on accidents and claims reductions.
But the insurance industry can support in more ways than simply incentivising through premiums. Risk assessments and risk engineering are a core function of London Market brokers, generating vast amounts of data on building performance globally. This data, along with claims trends, could be shared with policymakers to help create more effective building regulations that can reduce risk and losses.
By endorsing and supporting buildings that meet higher environmental and safety standards, insurers can influence the market and encourage legislative changes.
Investing in healthcare is more than just allocating funds - it's about ensuring those investments lead to meaningful improvements in public health outcomes, safety, and long-term environmental sustainability. Whether it’s the USA’s high expenditure or the UK’s struggle with an overstretched system, the key takeaway is clear: smart investment in technology and infrastructure is essential. Solutions like PRS illustrate how targeted investments can significantly enhance human health outcomes while also addressing broader issues like energy conservation, environmental sustainability and air quality. As we look to the future, it’s vital that both governments and industries, including insurance, prioritise and support these innovative solutions. Only by aligning financial investment with forward-thinking strategies and proven innovation can we truly elevate global healthcare standards and build a healthier, more resilient society.
Gallagher Specialty is highlighting Pathogen Reduction Solutions in this article based on its relevance and potential benefits to our clients. We do not receive any payment or commission for this promotion, and at time of writing there is no formal agreement or partnership between Gallagher Specialty and Pathogen Reduction Solutions. This article is for informational purposes only, and we encourage readers to conduct their own research before making any decisions. Gallagher Specialty make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of the publication and accepts no liability for reliance upon opinions and or information.
Arthur J. Gallagher (UK) Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 119013.