Week 5: Investment Potential in Healthcare

Introduction

Healthcare is an industry that touches the lives of nearly everyone in the United States at some point (Healthcare, 2009). Whether it was during birth, picking out your insurance through your employer, or spending your last years at an assisted living facility, you have dealt with the health care system in some way. With that being said, it should come as no shock that the Americans health care industry is one of the nation’s largest and most profitable industries (Healthcare, 2011). Not only is employment growth expected to account for about 3.6 million new wage and salary jobs (EDA, 2010). Wage and salary employment in the health care industry is project to increase 27 percent through 2014, compared with 14 percent for all industries combined (EDA, 2010). This is a very broad industry ranging from clinics to hospitals, to private insurance coverage or government. This paper will provide more information pertaining to the health sector and present some opportunities for investments in the industry.

Government Involvement in Healthcare

Should the government be involved in any part of the healthcare industry? This is a question that has raised many debates over time. However, the government is greatly involved, and has been for quite some time, when it comes to healthcare. As stated, before, healthcare is one of the most profitable industries. “Hardly any economic activity is free of government intervention” (Folland, 2010). Of course you can be sure that the government is intervenes in this industry more than many seem to realize.

The government is not only involved in producing and financing healthcare services, but they are responsible for intervening mainly through provision of goods and services, redistribution, and regulation (Folland, 2010). A sector of the healthcare industry that the government is responsible for is Food and Drug Administration. Their involvement dates back to 1906 with the Food and Drug Act of 1906. Afterwards...