Week 5 Case Study: Investment Potential in the Healthcare
Week 5 Case Study
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
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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 as a result of their health problems is an increasingly important driver 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