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How Public And Private Investment Will Affect American Healthcare Industry?

In a recent survey conducted by Merritt Hawkins, a physician recruitment firm, it was found that 56% of doctors have begun to warm up to the idea of a ‘single-payer healthcare system.’ Though the idea is fairly new in US, it will ensure that the government (Medicare/Medicaid) would pay for the healthcare bills of a great number of people (being voiced for ‘all’) rather than private insurance companies. This is being welcomed by doctors also because they are getting tired of dealing with the stringent billing and coding regulations of insurance payers, and would primarily prefer to focus on patient care. Further, 60% of Americans also believe that it is the federal government’s responsibility to guarantee healthcare for all its citizens. And a Medicare-for-all system would eliminate profits and keep health above all else.

While the average spending of US’ peers stands to be 11% of its annual GDP, for America it is 17% amounting to $3.06 trillion. US spend around $8,508 per person for healthcare while for other countries it remains $3,322. Further, in America, around 10,000 people turn 65 every day accounting for 18% of the total population by 2030 and 24% by 2060. The responsibility of their healthcare undeniably lies with the government.

With The Expansion Of Medicare And Medicaid, What Is Presumed To Happen To The Other Private Organizations?

They will begin to adjust themselves in order to not get wiped out; as now the prices of drugs, pacemakers, artificial joints, and other devices will be determined by the government. A merger is another aspect which will probably be looked at by the private insurance companies.

Losers:

Companies like Johnson & Johnson, Bristol-Myers Squibb may lose a bit as drug prices would be controlled in the ‘Medicare for all’ option. Same goes for Mylan Labs and Teva Pharmaceutical. Medtronic and again J&J will be affected with curbs in the pricing regulation of medical devices. Insurance companies may see a merger with CVS Aetna being the leader. Athena health would probably merge with Walgreen Boots Alliance.

Winners:

With the concept of in-store clinics, CVS a Walgreens would emerge the clear winners. Equipment makers such as General Electric and Siemens AG would also benefit. Physicians wishing to invest could benefit from investments in Biotech Spider ETF. Again, due to technology moving faster than anything else, investing in companies offering software and cloud services such as Microsoft, Cisco Systems, IBM, Oracle, Hewlett Packard and CA Technologies would work great.

Investments:

Other Places Where Physicians Can Invest In Are:

– Global X Longevity Thematic ETF which “seeks to invest in companies positioned to serve the world’s growing senior population.” (Holdings include Novo Nordisk, Regeneron Pharmaceuticals Inc., McCarthy & Stone);

– iShares US Healthcare Providers ETF (covers insurance and pharmacy benefits giants Express Scripts Holding Co. and HCA Healthcare Inc.), and UnitedHealth Group Inc., Humana Inc. and Aetna Inc. (these three cover almost half of the Medicare Advantage marketplace);

– SPDR S&P Biotech ETF (includes biotech funds XBI);

– iShares Medical Devices ETF (top holdings include Medtronic PLC specializing in cardiovascular technologies, lab-equipment provider Thermo Fisher Scientific Inc. and Intuitive Surgical Inc. that makes equipment for robotic-assisted surgery);

– Vanguard Health Care ETF (investments for a wide spectrum and profits from all sectors of healthcare from biotechnology to medical device manufacturers to health care facility operators this holding includes consumer health giant Johnson & Johnson, drug maker Pfizer Inc. and UnitedHealth Group).

The American healthcare system is in doldrums and needs an urgent repair. Many Americans are dying due to the lack of health coverage. With the aging population and healthcare costs escalating, it requires a complete transformation. And that ‘Change’ is inevitable, this time not due to politics; but solely due to economic and demographic reasons.

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