by winston » Sat Jun 13, 2015 9:55 pm
The ongoing boom in health care continues…
Our colleague Dr. David "Doc" Eifrig has written at length about how Obamacare and the aging "Baby Boomer" generation have created a huge opportunity in health care for investors.
Shares of health-insurance firms have skyrocketed since the launch of Obamacare in 2010. Last week, health-insurance firms Aetna (AET), Cigna (CI), and Humana (HUM) hit fresh all-time highs.
And it's not just insurance companies that are soaring… Pharmaceutical giant Eli Lilly (LLY) hit a new 13-year high this week… while the Health Care Select Sector SPDR Fund (XLV) and iShares U.S. Health Care Fund (IYH) are up more than 100% in the last three years.
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Doc has been all over this trend from the beginning. He has led his subscribers to triple-digit gains in medical-equipment giant Medtronic (MDT), drugstore chain CVS Health (CVS), and the Fidelity Select Medical Equipment and Systems Fund (FSMEX).
As Doc explained in the August 11 Digest Premium…
Back when I was in high school, health care spending accounted for less than 10% of gross domestic product (GDP). Today, it accounts for 18%… In 25 years, estimates project that number will rise to 24%.
One of the reasons for that increase is the aging Baby Boomer generation, which will lead to a 45% increase in the elderly population. That means more money will be spent on prescription drugs and on doctor visits.
Doc noted that elderly people take three to four times more prescription drugs than people younger than 50… and pointed out that 90% of seniors take at least one drug per month…
Add to that the average nursing home stay is nearly 2.3 years and costs more than $200,000. According to financial-services firm Fidelity, the average retiring couple will need $220,000 to pay for health care costs if both partners live into their 80s.
Drugstore chains will fill more prescriptions. Health care technology is a growing sector, and certain firms are ideally positioned. And of course, pharmacy benefit managers that help manage the prescription process are a great way to invest in this long-term trend.
Please Enable Images to See this All of this has led to a boom in health care-related job openings, as the industry tries to find new workers to keep up with demand…
In an article this week, Bloomberg noted that job listings in the health care sector have soared while hiring has failed to keep pace. That suggests that the U.S. workforce may not be able to meet the demand for health care workers. From the article…
The 910,000 listings in the health care industry almost doubled the 513,000 who were added to payrolls, meaning there were about 1.8 jobs available for every person who was hired. Across all private employers, that ratio tilted in the job seeker's favor for the first time ever in April.
Wages in the industry grew by 2.2% in the year through April after a 2.3% increase the prior month that was the strongest since the end of 2012, separate Labor Department
figures showed last week.
This trend is likely just getting started.
Source: Growth Stock Wire
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