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Gene Ray06/09/13
HSM 544 Case Study 2
The Health Sector:Status and its Investment Opportunities
The healthcare industry of America is the nation's largest and most profitable industry
and it continues to grow. The American healthcare industry "has consistently increased its
Gene Ray06/09/13
HSM 544 Case Study 2
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). Many jobs will be created through the healthcare system within the
a few decades based on the current trend. Healthcare, 2011 et. al. states that over 3 million
jobs are expected to generate through the year 2018. Besides the enormity of this industry, its
broadness houses many investment opportunities and developmental risks which should be
questioned and studied. Possible changes may be made throughout these decades and the
promise jobs may remain just that- promises. Therefore we should seek out the governmental
roles and its involvement in a possible increasing or decreasing healthcare industry. Also, we
should seek the innovation of this industry from a technological stand point and understand if
it is a worthy component for the future of our healthcare in the fields of prevention and
delivery systems.
The topic concerning the role of government in healthcare will always be an issue,
whether people are against it or for it, and will be a debate. As of now the current state of
healthcare remains with high regulations under the hold of the federal and state government
but a proportion is privately owned by the social insurance corporations. The federal and state
government 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 5% is due to the bankruptcy or loss of work. With
this nation having almost 50 million poor people and the individuals who cannot simply afford
social insurance, make the 46% of the government owned healthcare insurance more
Gene Ray06/09/13
HSM 544 Case Study 2
powerful despite its 3% shortage as compared to social insurances. Therefore the more
powerful government involvement is often questioned in regards to the the health care
industry cost and quality. With the quality of healthcare services deteriorating in low income
areas makes even more difficult to help change America, which is already rapidly changing for
the worst. Americans are increasingly become poorer. More poor people will create a higher
demand for government assisted healthcare programs but the physicians that may be on
these program plans may provided less than desirable service due to the demographic areas.
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 issues lack the appropriate response since millions of people 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. In March of 2010 the Affordable Care Act (ACA) was signed. The
Affordable Care Act is the nation’s health reform law enacted in March 2010. It contains
numerous provisions that will expand health coverage to 30 million Americans, increase
benefits and lower costs for consumers, provide new funding for public health and prevention,
bolster our health care and public health workforce and infrastructure, foster innovation and
quality in our system, and more. The law consists of two pieces of legislation: the Patient
Protection and Affordable Care Act (PPACA), enacted on March 23, 2010, and the Health
Care and Education Reconciliation Act (HCERA), enacted on March 30, 2010. Jointly they are
referred to as the Affordable Care Act or ACA. (The Affordable Care Act: How it helps you.
Gene Ray06/09/13
HSM 544 Case Study 2
(n.d.)) Also in this new act is the requirement for businesses to provide their employees with
health care coverage if they have 50 or more employees. If they do not provide insurance
they will have to pay a tax which will be used by the government to provide those individuals
whom cannot healthcare with healthcare. Many states have retaliated against this new act
and considering it unconstitutional and with this situation alone, one may be able to determine
the role of this government and its need to change due various ridicule approve
arrangements. Increasing government programs in the healthcare industry may offer some
sort of cost control, this may help the people that do not qualify of Medicare or Medicaid, the
not so old or poor and can be useful for them. Actions such as these may alter the current
price increases and create opportunities for investments.
In the concern with the growth of the healthcare sector, there still needs to be more
jobs provided even though the industry has created more than 200,000 jobs in January 2012
but there are still more than 12 million Americans without a job. The potential growth of this
sector is unimaginable since it can create various opportunities. With demand for health care
growing at a rate twice that of the national economy, the industry is on track to create 5.6
million new jobs by 2020, according to a new study from Georgetown University’s Center on
Education and Workforce (Berman 2012). The continuation of the innovation of technology,
the abundance of jobs may be not to farfetched. There are still numerous diseases and new
illness that have evolve and have become resistance to many drugs and these issues
continue to plague our nation and only advance technology came amount to this new age of
viruses and diseases.
Diseases such as type II diabetes, obesity, heart disease, Alzheimers, and dementia
Gene Ray06/09/13
HSM 544 Case Study 2
continue to plague our country especially for the elderly. With many of the baby boomers
entering the age were they will need geriatric care is increasing and many Americans will be
in high demand for health services. Therefore investment in renovating clinics, nursing homes
and any other health care facilities that houses the elderly for health services need to be
made in order to keep up with generation of technology advances. New technology would be
able improve the lives of senior citizens and also keep the current status their well being.
Today, as the incidence of chronic illness explodes, chronic care management remains
expensive, labor intensive, and plagued by wide variations in the effectiveness of care. By
2015, we believe chronic patients will be empowered to take control of their diseases through
IT-enabled disease management programs that improve outcomes and lower costs (IBM
Institute for Business Value. (2006)).
References:
The Affordable Care Act: How it helps you. (n.d.). U.S. Department of Health & Human Services.
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HSM 544 Case Study 2
Retrieved June 9, 2013 from http://www.healthreform.gov/index1.html
Baby boomer health care crisis looms. (2008). Science Daily. Retrieved June 9, 2013 from
http://www.sciencedaily.com/releases/2008/04/080417111300.htm
Healthcare. (2011). Career Guide to Industries, 2010-11 Edition. Bureau of Labor Statistics, U.S.
Department of Labor. Retrieved June 9, 2013 from http://www.bls.gov/oco/cg/cgs035.htm
Morrisey, M. A. (2008). Is health care different? The concise encyclopedia of economics: Health care.
Retrieved June 9, 2013 from http://www.econlib.org/library/Enc/HealthCare.html
Newport, F. (2009). Costs, Gov't involvement top healthcare reform concerns. Retrieved June 9, 2013
from http://www.gallup.com/poll/124331/Costs-Gov%27t-Involvement-Top-Healthcare-
Reform-Concerns.aspx
Swartz, K. (2009). Health care for the poor: For whom, what care, and whose responsibility? Focus,
26(2). Retrieved June 9, 2013 from http://www.irp.wisc.edu/publications/focus/pdfs/foc262l.pdf
Van Horn, G. (2010). Aging boomers likely to boost health care sector. IBISWorld. Retrieved June 9,
2013 from http://www.ibisworld.com/Common/MediaCenter/healthcare%20special
%20report.pdf
Berman, J. (2012) Health Care Industry Will Create 5.6 Million More Jobs By 2020: Study. Huffington
Post Retrieved June 9, 2013 from http://www.huffingtonpost.com/2012/06/21/health-care-job-
creation_n_1613479.html
IBM Institute for Business Value. (2006). Healthcare 20#5: Win-win or lose-lose? Retrieved June 9,
2013 from http://www-935.ibm.com/services/us/gbs/bus/pdf/healthcare2015-win-win_or_lose-
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HSM 544 Case Study 2
lose.pdf
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