Healthcare Industry
The American health care industry is one of the nation's largest and most profitable industries (Healthcare, 2011). The American healthcare industry "has consistently increased its share of GDP from only 7.2% in 1970 to more than 16.0% in 2008" and that figure is still growing (Van Horn, 2010).It is also one of the few American industries that is expected to grow in the next few decades. In fact, the healthcare industry in America is expected to generate 3.2 million new jobs through the year 2018, which is more than any other American industry (Healthcare, 2011). This industry includes everything "from small-town private practices of physicians who employ only one medical assistant to busy inner-city hospitals that provide thousands of diverse jobs" (Healthcare, 2011). It includes things such as doctors' offices, phlebotomy laboratories, research laboratories, outpatient care centers, nursing homes, residential care facilities, clinics of all sizes, and large hospitals (Healthcare, 2011). It is not only a large industry, but a very broad one with many potential investment opportunities and many potential risks.
Government and Healthcare
The role of government in the healthcare industry is a topic that leads to very active and divisive debate. People are either of greater government involvement or deeply opposed to any government involvement. Currently, healthcare remains an industry with a high degree of regulation, in terms of state and federal law as well as in payment terms, but it is also an industry where private ownership and private arrangements for obtaining and paying for care are significant. "Federal and state governments ... together ... account for 46 percent of national health care expenditures; nearly three-quarters of this is attributable to Medicare and Medicaid" (Morrisey, 2008). The remaining 49% of health care costs are paid by "private health insurance [which] pays for more than 35 percent of spending ... and out-of-pocket consumer expenditures account for another 14 percent" (Morrisey, 2008). The remaining 5% is unpaid for, due to factors such as poverty, loss of work and insurance coverage, death, or bankruptcy.
The debate regarding government involvement in the health care industry often centers on issues such as quality and cost of care versus the lack of care for the millions who fail to qualify for government assistance, are turned away by private insurance due to chronic illness or other factors, or who work for employers who do not provide health insurance and cannot afford to purchase it alone. To help with this President Obama signed the Affordable Care Act (ACA) in March 2010 to help ensure that all Americans were able to obtain some form of health care insurance (The Affordable, n.d.). The ACA requires private businesses to offer health insurance to employees or to pay a tax that will then be used by the government to create a pool for Americans who are uninsured to be able to purchase health insurance at an affordable rate (The Affordable, n.d.). Because ACA also requires individuals to purchase many states have filed cases asking courts to declare the ACA unconstitutional. While this issue has not yet been decided, the role of government in the health care industry is likely to change in the coming decades.
Two of the key reasons for this change are that Americans are aging rapidly and that Americans' are increasingly becoming poor. Both of these things mean Americans will start to demand greater health care services as well as increased government support to afford such care and increased government protection if or when health care fails to properly care for patients. By the year 2029 nearly 20% of the American population will be over the age of 65 (Van Horn, 2010). The fact that in the United States, unlike in many developed nations where the health industry is a public industry, has linked employment with health insurance means that anytime a person loses a job he or she is likely to easily lose any kind of health insurance coverage. Further, "the fact that people in poor health often have low incomes asa result of their health problems is an increasingly importantdriver of efforts to expand eligibility for public insurance" (Swartz, 2009). These two factors will likely bring greater pressure on Congress to increase government programs in the healthcare industry, to offer some form of cost control in the industry, and to offer some form of health care for those not so poor or so old that Medicare or Medicaid can be useful to them (Swartz, 2009). These actions will likely lead the healthcare industry to alter its current, and easy, price increases, which will reduce profitability yet, some of the demand for health care services and programs in certain health care sectors will lead to great investment opportunities (Newport, 2009).
Experts have warned that longer life expectancies and the large number of aging Americans will mean a high demand for geriatric care, experts in the chronic illnesses the aged are subject to (today this includes Type II diabetes, obesity, heart disease, Alzheimers, and dementia for example) (Baby, 2008). Therefore health care facilities such as clinics, doctor's offices, nursing homes, recovery homes, and all locations where those receiving treatment for these conditions would use, stay in, or live in are likely to represent an increasing share of profit in the healthcare industry. Likewise, technology related to such patients or to the provision of care to these patients, such as that designed to coordinate care from multiple centers or doctors or that designed to improve the quality of life for these patients, would also be good investments. Technology able to predict health concerns, such as osteoporosis, heart disease, or arthritis would also be good investments.
References
The Affordable Care Act: How it helps you. (n.d.). U.S. Department of Health & Human Services. Retrieved February 2, 2012 from
Baby boomer health care crisis looms. (2008). Science Daily. Retrieved February 2, 2012 from
Healthcare. (2011). Career Guide to Industries, 2010-11 Edition. Bureau of Labor Statistics, U.S. Department of Labor. Retrieved February 2, 2012 from
Morrisey, M. A. (2008).Is health care different? The concise encyclopedia of economics: Health care. Retrieved February 2, 2012 from
Newport, F. (2009). Costs, Gov't involvement top healthcare reform concerns. Retrieved February 2, 2012 from
Swartz, K. (2009). Health care for the poor: For whom, what care, andwhose responsibility?Focus, 26(2). Retrieved February 2, 2012 from
Van Horn, G. (2010). Aging boomers likely to boost health care sector. IBISWorld. Retrieved February 2, 2012 from
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