As global healthcare systems look for ways to cope with the Covid-19 pandemic, one place they are turning to for help is robots.
These robots are far simpler and infinitely more helpful than the machines that threaten us in science fiction movies. But their simplicity is their virtue. They perform repetitive tasks flawlessly and perfectly, doing such things as cleaning a patient room in 10 minutes. They can also gather basic patient information, reducing high risk contact between medical staff and patients.
For investors, it’s an area to watch. As the pandemic washes over us, the need to contain infection, safeguard doctors and nurses and do more with less is acute. This is why many well known public companies are exploring robot technologies. Though robots are in their early stages, as their use in medical situations spread, their costs will fall. As their costs fall, the rate of adoption will rise, leading to new, better and cheaper machines.
At Italian hospitals in Lombardy, robots are taking patient temperature and recording pulse rates. They relay that information to a nursing station. Robots are using cameras to move around rooms, operating theatres and public hospital spaces, using ultra violet light to clean. They are doing a better job of it than traditional chemical cleaners. In some Chinese cities, robots are using an infrared thermometer to take the temperature of children before they enter the school.
Robots also present a broader opportunity. Advanced economies are facing age-related trends which means there will be fewer people to care for an older demographic. By 2031, when all the baby boomers will have reached 65, seniors will represent almost 25% of the total population, Statistics Canada says.
During the 2015 Ebola outbreak, the White House Office of Science and Technology Policy identified three broad areas where robotics can make a difference in healthcare. One was telemedicine and decontamination, where we now are seeing big advances Another was logistics, including the delivery of goods where companies like UPS, Google and Fedex (discussed below) are involved. A third was monitoring compliance with voluntary quarantines.
Cleaning and disinfecting
Hospitals are germ incubators and it is a challenge keeping them clean. The Canadian Patient Safety Institute, (CPSI) a Health Canada agency, notes that 8,000 Canadians die every year from hospital-acquired infections. Another 220,000 are infected. That’s under normal circumstances.
A Danish company called UVD Robots, shipped 2,000 hospital disinfection robots to China in February for use in Wuhan. The robot uses a pulsed light beam and cameras to detect the distance between objects and so move around them. It bathes surfaces with UV light which kills the germs and can shine UV light into areas that would normally go untreated. One example is the space behind a toilet.
Texas-based Xenex Robots founded by two Johns Hopkins-educated epidemiologists, has a similar system that costs US $125,000 per unit and is installed in more than 500 hospitals globally.
Orion Star, a subsidiary of Cheetah Mobile Inc., (NYSE: CMCM) one of China’s large mobile internet companies, is selling robots that can go into homes in quarantine. Once inside a house it can take temperatures and pulses and transmit the information to doctors who use it to make a diagnosis and remotely deliver medicines. This technology is similar to the Italian robots which have a touch-screen face which allows patients to relay messages.
The Chinese school robots can detect temperature with 99 per cent accuracy from up to 3.5 metres away using infrared technology.
Monitoring public safety:
A police robot is being been deployed in Tunisia’s capital of Tunis, to ensure residents are observing a lockdown. As reported by BBC News, if the robots see people out walking they approach and with police connected via audio and video ask for ID and why they are out.
A Chinese robot has been working at highway toll gates to monitor mask use and body temperatures with infrared thermometers. It also has an audio video link to police.
Logistics and delivering drugs and food
UPS (NYSE:UPS) has been testing unmanned robot drones for years. Its first efforts were delivering time-sensitive drugs in remote parts of Ghana and Rwanda with patchy road and air links. Its partner was Zipline, a privately-held California automated logistics company. Zipline is backed by Google Ventures, Microsoft co-founder Paul Allen and Yahoo co-founder Jerry Yang.
Early last year, UPS began testing drone delivery of blood and tissue samples between hospitals in Raleigh, North Carolina. In the fall, it received wider approval for a drone airline. The certification lets UPS fly as many drones as it wants, day and night with cargo that weighs more than 25 kg (55 lbs.)
UPS rival FedEx (NYSE: FDX) joined Alphabet (NDQ:GOOGL) spinoff Wing Aviation in a partnership with the Walgreens Boots Alliance pharmacy chain (NYSE:WBA). In October, FedEx made a residential delivery to a home in Christiansburg, Virginia.
As a response to COVID, Wing has expanded the number of items it will deliver to include bread from a local bakery and hot drinks from a local coffee shop. The range of Walgreens products has increased to include such things as toilet paper, diapers, medicines, toothpaste and baby food.
Wing is part of Alphabet’s “Other Bets” portfolio and received approval last year for the delivery of small packages. That came after 70,000 test flights and 3,000 deliveries in Australia.
UPS has a similar partnership with CVS Health Corp. (NYSE: CVS) The first flight was a drone delivery to homes near a CVS store in Cary, North Carolina. The prescriptions were lowered via a cable to a customer with limited mobility. In March, UPS said it is working with German startup Wingcopter to develop an electric drone with a range of 120 km (75 miles) and with a maximum speed of 250 kmh (150 mph).
These examples are the early days. For now the direct investable options are limited. Horizon Funds launched a Robotics and Automation Index ETF (TSX: RBT) in 2017 which has not performed well. The units peaked at $26.55 in Jan. 2018 and fell steadily thereafter. They are down 29% from that high in the $19 range at the time of writing.
Logistics companies like FedEx, UPS, and tech companies like Google, Amazon and Apple all on the IWB recommended list, offer a safe way to participate in the trend as the world gets back to work. Engineering companies like ABB Ltd., (NYSE:ABB) also stand to gain.
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(This is article appeared in the April 20, 2020 edition of the Internet Wealth Builder.)