AI Summary
5 min readThe U.S. spends about $3.4 trillion annually on chronic disease, including lost economic productivity, and roughly $1.4 trillion of that is tied to preventable conditions. That staggering figure is the backdrop for a fundamental shift in healthcare: the patient is becoming self-directed, using lab tests, wearables, and digital tools to spot risks before symptoms appear. Erin Wright, Morgan Stanley's U.S. Healthcare Services Analyst, argues that this move from reactive to proactive care is becoming an investable theme with implications that reach well beyond the healthcare sector.
The Preventative Testing Market Is Doubling
Direct-to-consumer lab testing lets people order tests online without a traditional doctor visit. Wright estimates this is now a roughly $4 billion U.S. market, more than double its size since 2021. The behavior is no longer niche. Morgan Stanley's AlphaWise survey found that about 34% of respondents completed a voluntary wellness lab test in the past three years, and among users, the average was 3.2 tests, suggesting repeat engagement rather than a one-time experiment. The most common test was a general health profile, used by about 45% of recent testers.
Wearables Create a Feedback Loop
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What you'll learn
- 1 (00:06) **The Self-Directed Patient as an Investable Theme** - Erin Wright introduces the shift from reactive to proactive healthcare, where consumers use lab tests, wearables, and digital tools to spot risks earlier.
- 2 (01:17) **Estimated Cost Savings from Preventative Testing** - Wright outlines the potential for expanded testing to avoid $200 billion to $800 billion of US healthcare spend by 2050.
- 3 (01:36) **The Direct-to-Consumer Lab Testing Market** - Description of the $4 billion US market that has more than doubled since 2021.
- 4 (02:19) **Wearable Adoption and the Data Feedback Loop** - Survey data shows 41% of respondents currently use a wearable, and users are acting on the data.
- 5 (03:08) **Sector Implications: Healthcare** - More testing may initially increase utilization from follow-ups, but over time supports lower cost of care and better chronic disease management.
- 6 (03:37) **Sector Implications: Consumer and Fitness** - Better health tracking could reshape food choices and gym offerings.
- 7 (04:04) **Sector Implications: Imaging** - Screening shifts from reactive diagnostics towards earlier disease detection.
+ Full timestamped outline available in the app
Show Notes
Our U.S. Healthcare Analyst Erin Wright discusses how health tracking and preventive diagnostics could influence healthcare costs and different industries, from fitness to retail.
Read more insights from Morgan Stanley.
----- Transcript -----
Welcome to Thoughts on the Market. I’m Erin Wright, Morgan Stanley’s U.S. Healthcare Services Analyst.
Today – the emergence of the self-directed patient and its implications.
It’s Tuesday, May 12th at 10am in New York.
A blood test ordered from your phone. A wearable that tracks your sleep or nudges you to move, recover, hydrate, or rethink last night’s dinner. Preventive health is moving out of the clinic and into everyday life. And that shift is becoming an investable theme.
In essence, healthcare is moving from reactive to proactive. Instead of waiting for symptoms, more consumers are using lab tests, wearables, imaging, and digital tools to spot some these risks earlier. And this shift reaches well beyond healthcare.
On our estimates, the U.S. spends about [$]3.4 trillion annually on chronic diseases, including lost economic productivity. About [$]1.4 trillion of 2024 spend was tied to preventable disease. So the big investment question is: can earlier detection and behavior change bend the cost curve?
We think expanded preventive testing, screening, and monitoring can help avoid roughly [$]200 billion to [$]800 billion of U.S. healthcare spend by 2050. That assumes preventive testing reduces preventable disease costs by about 10% to 30% based on our analysis.
Direct-to-consumer lab testing lets people order lab tests directly, often online, without starting with a traditional doctor visit. We see this as a roughly $4 billion U.S. market, which has more than doubled since 2021. And it’s no longer niche. Our AlphaWise survey found that about 34% of respondents completed a voluntary wellness lab test in the past three years. Among users, the average was 3.2 tests, suggesting this is not just a one-time behavior. The most common test was a general health profile, used by about 45 percent of recent testers.
Wearables are the other part of the story. Our survey found that 41 percent of respondents currently use a wearable or fitness device, while another 22 percent are interested in getting one. More importantly, people are acting on the data. 34 percent of wearable users today regularly change behaviors or decisions based on their device, and 52 percent even sometimes do so, based on our survey.
That creates a feedback loop. A wearable might flag poor sleep. A lab test might show elevated glucose. A digital health tool might suggest changes to diet or exercise, or follow-up care. Over time, prevention starts to feel less like an annual event and more like a daily
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