Investing in companies at the forefront of innovation can be exciting, especially in the healthcare sector. Until we can completely eradicate illnesses, there will always be a market for newer and better ways to offer cutting-edge medical care. And corporations that succeed in providing it can also become financially successful, along with their shareholders.

With that in mind, let's look at two healthcare companies that are innovators in their respective niches and could produce market-beating returns in the next 10 years: Exact Sciences (EXAS -0.61%) and Intuitive Surgical (ISRG -1.98%).

1. Exact Sciences

Exact Sciences' goal is to eradicate cancer. Perhaps that's too optimistic, but the company could play a role in reducing cancer deaths through its diagnostic solutions. It developed a product called Cologuard, a non-invasive test for colorectal cancer that is indicated for those 45 or older with an average risk of contracting the disease.

By the end of the first quarter, Exact Sciences had tested more than 1.2 million patients this year already. Here's why this matters: Colorectal cancer is the second deadliest cancer in the U.S. despite being highly treatable when caught early on.

In other words, a substantial percentage of patients are being diagnosed when the disease has already metastasized, a stage at which the five-year survival rate drops like a rock. Cologuard was first cleared in 2014 and has helped test millions of people since then. Still, the current state of colorectal cancer in the U.S. shows that there is plenty of work to be done here.

Exact Sciences estimates that 60 million U.S. patients are not up to date with their recommended screenings. The company has been aggressively marketing Cologuard of late to raise awareness of the issue. The result could be more screenings and higher revenue. In the first quarter, Exact Sciences total revenue of $602 million increased by 24% year over year.

The market for diagnosing the disease provides plenty of growth opportunities for the company through the next decade, especially because it is developing a second-generation version of Cologuard to improve the test's accuracy.

Exact Sciences is also working on other products, including a multi-cancer screening platform. As the company points out, 70% of cancers have no screening options, so there is a massive opportunity here. Its approach to reducing cancer-related deaths, its track record of success, and the multiple opportunities in its market make it a top stock to hold through the next decade. 

2. Intuitive Surgical 

Intuitive Surgical is a medical device specialist that has helped advance the field of robotic-assisted surgery (RAS) with its da Vinci Surgical System. This device allows physicians to perform minimally invasive operations that rely on small incisions and tiny instruments that can be manipulated with extreme precision to get the job done.

Compared to open surgeries, where doctors more or less cut open a patient to gain access to the organs involved in the procedure, minimally invasive surgeries generally lead to less bleeding, less scarring, faster recoveries, and shorter hospital stays. No one can argue with those results. Intuitive Surgical is the undisputed leader in RAS; as of 2020, it held an impressive 80% market share.

And while competition is heating up from such healthcare companies as Medtronic and Johnson & Johnson, there are excellent reasons Intuitive Surgical can remain the leader. For instance, consider the high switching costs. The da Vinci system costs between $500,000 and $2.5 million, not to mention the countless hours that go into training surgeons on how to use it. After investing that much into a da Vinci system, hospitals are unlikely to jump ship.

Intuitive Surgical ended the first quarter with an installed base of 7,779 da Vinci robots, a 12% increase from a year ago. That number should continue growing, as will the number of procedures associated with it, given the superiority of minimally invasive surgeries and the world's aging population.

In the first quarter, Intuitive Surgical's revenue of $1.7 billion jumped by 14% year over year. The company's earnings per share of $1 remained flat compared to the year-ago period. Intuitive should continue delivering excellent financial results along with market-beating returns, just as it has in the past decade.