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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

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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

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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.

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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

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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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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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