Few aspects of adult life are more unpleasant than preparing for – and getting – a colonoscopy.

In the run-up to the exam, you have to restrict your diet and consume large quantities of a revolting liquid to clean out your colon – just so the doctor can get a clear look at your large intestine. 

Colorectal cancer is beatable up to 90% of the time when it’s caught early enough.1 But the Centers for Disease Control and Prevention reports that only 63% of people between 50- and 75-years old have been screened – and it’s been widely reported that squeamishness over getting ready for the exam is the reason why so many people are avoiding the test.

Fortunately for anyone who loathes the idea of getting a colonoscopy, we’re living in some pretty exciting times when it comes to medical diagnostics. Today, innovative companies like Exact Sciences2 are developing less invasive methods for detecting colon, and other cancers.

The Madison, Wisconsin-based molecular diagnostic firm has developed Cologuard, a non-invasive screening for colorectal cancer that only requires a patient to submit a stool sample. The test is designed to detect all the classic signs of colon cancer, as well as certain DNA mutations.

Not only is this process less stressful and physically taxing— it can potentially lead to an earlier diagnosis— when treatment can do the most good for the patient. The company isn’t stopping there either. Exact Sciences is also partnering with the Mayo Clinic on innovative methods for diagnosing lung, pancreatic and liver cancers.

Medical Diagnostics – An Area of Exponential Growth?

Thanks to innovative companies like Exact Sciences, we believe medical diagnostics is poised to be an area of exponential growth in the coming decade. 

Imagine a world where your doctor can do a full analysis of your genome to gain insights into the diseases you’re most susceptible to. Armed with this knowledge, your doctor can then prescribe preventative treatment plans that are potentially cheaper for you – and your insurer – than treating you for a chronic illness. Or, if you’ve already been diagnosed with an illness, you can get a prescription for medication that’s closely aligned with your genetic makeup – which may dramatically improve your odds of living a normal life following treatment.

Well, companies like Biocartis Group3 are working to make this a reality. Biocartis is best known for its Idylla tests, which produce detailed molecular information on any biological sample in any setting. Today it offers 12 oncology tests, and earlier this month the company announced a partnership with the biotech firm Amgen as it pursues FDA approval for its Idylla test to be used in tandem with Amgen’s cancer drug Vectibix.

The ultimate goal for this partnership is to personalize colorectal cancer treatment and improve patient outcomes for people who are fighting this disease. Biocartis’ two Idylla RAS biomarker tests can allow doctors to simultaneously detect up to 44 different mutations for colorectal cancer. Knowing which mutations a colorectal cancer patient is facing can help doctors choose the appropriate treatment with the highest probability of success.

Why the Cost of Medical Diagnostics May Fall 

These advancements in medical diagnostics don’t only have the potential to lead to better outcomes for patients. They may also go a long way toward reducing the amount of money Americans spend on getting medical diagnoses every year.

Finding out you have cancer isn’t just a personal tragedy.  It’s also the beginning of an arduous financial journey, where thousands of dollars, both from insurance and out-of-pocket, will be spent on tests, medications and other unforeseen expenses. 

According to the American Cancer Society, Americans spent nearly $87.8 billion on cancer-related healthcare in 2014, a significant chunk of which went to medical tests. In fact, roughly 10% of all medical spending in the United States goes towards covering the cost of diagnosing illnesses, with Americans spending an estimated $750 billion on diagnostics alone in 2015, according to estimates from SimulConsult, a medical software company.

But we believe there is good news on the horizon on the medical diagnostics front. Thanks to companies like Exact Sciences and Biocartis, a growing number of doctors are able to conduct highly accurate, rapid response tests that are less costly and less invasive than anything we’ve seen in the past. As a result, we expect the amount of money that’s spent on testing to fall significantly in the coming decade – benefitting both consumers and insurers alike.

Our Investment Approach

As portfolio manager of Oppenheimer Global Opportunities Fund, my team and I don’t try to predict what the market will do six months from now, make guesses about what the Federal Reserve will do on interest rates, or even make predictions about the policies any presidential administration will pursue.

We simply spend our time searching for companies like Exact Sciences or Biocartis, which are leading the way in transformational technologies through patent-protected intellectual property. The companies we seek to invest in are using these resources to build businesses that enjoy a high probability of strong future growth.

The improvement in medical diagnostics is a theme we’re excited about – and we believe it will help us deliver strong returns to our investors in the years ahead.

  1. ^Source: Colorectal Cancer Alliance
  2. ^1.85% of Oppenheimer Global Opportunities Fund is invested in Exact Sciences.
  3. ^0.52% of Oppenheimer Global Opportunities Fund is invested in Biocartis Group.