Health Care Reform U.S. Audience: A Potential

¶ … health care reform U.S. Audience: A potential English-Speaking Asian investor U.S. health insurance corporations (Student Sample section companies). Purpose: To assess current status reform evaluates investment decisions.

Investment prospects in the healthcare industry

Mr. X

Until recently, America was rather unique amongst the major industrialized nations in the fact that it could not necessarily be assumed that every American would have health insurance. Americans largely receive their healthcare through their employers or have the option of purchasing coverage privately. Thanks to the Affordable Care Act now all Americans are required to have healthcare coverage. This will likely dramatically expand the number of persons receiving healthcare in the future. The aging of U.S. population likewise will stimulate demand for healthcare.

Because of the current volatility of the American healthcare industry, many foreign investors are understandably leery about making the commitment to purchase shares in this sector. Being risk-adverse is a noble attribute: however, one does not want to miss out on a potentially lucrative opportunity. One company which has drawn a great deal of interest in recent years is HCP, Inc. A healthcare real estate investment company which specifically invests in health-related properties. Some of these facilities include senior housing, nursing facilities, physician's offices, as well as more traditional hospital-like structures.

The diversification of HCP's portfolio reflects how care in the United States is increasingly being provided via less traditional venues, partially as a way of cutting healthcare costs. Nurses are assuming some of the traditional duties of physicians in outpatient settings. "To date, approximately 19 million people receive care at community health centers. It is predicted that by 2019, 50 million people -- many of them with low incomes -- will be served by these centers" ("Affordable care act implementation," RWJF). Seniors are no longer remaining at home and being cared for by their families (which was always less prevalent in the United States than in other nations, anyway) but are instead being cared for in assisted living settings. HCP's offerings reflect this fact and thus are likely to be a good investment in the future, regardless of the stability of the overall industry. No matter what the final state of the implementation of the ACA, changing demographic trends are unlikely to alter and the need for the types of facilities invested in by HCP will rise.

Because of the increased concerns about the escalation of healthcare costs, there is also greater demand for preventative services to screen for conditions before they become acute and more costly to treat. Regarding this demand, the services offered by the company Myriad Genetics seem pertinent. Myriad is a "molecular diagnostic company dedicated to making a difference in patient's lives through the discovery and commercialization of transformative tests to assess a person's risk of developing disease, guide treatment decisions and assess risk of disease progression and recurrence" (Myriad Genetics and Laboratories, Official Website). For example, Myriad screens for the genetic markers which place women at markedly increased risk of developing breast cancer, enabling women to obtain a precautionary mastectomy to avoid developing this condition.