Health Care companies are a larger part of the American investment market than many people realize. Generally speaking, any company that generates revenue by treating physical ailments can be considered a health care company. That translates into literally trillions of dollars.
In the 2007 the US spent $2.26 trillion on health care, that comes out to $7,439 per person for the year. This amount equaled 16% of the US GDP. These figures show that we are the world’s greatest spenders when it comes to health care. This trend is only expected to rise, primarily due to increasing obesity and an aging population.
By the end of this year (2015), obesity figures are expected to reach 41%. Add to this an aging population due to baby boomers and it seems as though the health care boom will never end. The aging population is expected to reach 107.6 million by the year 2030.
The health care field has outperformed the S&P 500 despite losing money due to a weak economy. In response the health care industry has come to play a large part in how Americans spend and invest their money. They are the single largest industry in the US based on the GDP, and no one expects it to slow down.
Generally health care facilities include hospitals, and REITS (real estate investment trusts). The REITS own their own real estate in one of four types of centers, senior housing, hospitals, skilled nursing facilities and medical office buildings.
An example of an REITS would be Nobilis Health, a publicly traded company that is listed on both the NYSE (HLTH) and TSX (NHC). They are a full service healthcare development and management company. Nobilis has both developed and managed over 100 surgical centers. They are known as both an innovative company and an industry leader.
In connection with their physician partners they own, develop and manage a significant number of outpatients in the Houston and Dallas areas. Nobilis Health Corporation has a reputation for high organic growth. Among their specialties are pain management, orthopedic surgeries, Spinal surgeries and podiatry. Nobilis continues to grow as in September of 2014 they were able to acquire the First Nobilis Hospital for $7.5 million which they paid in cash. On September 23, they acquired a 60% stake and management control of the Freedom Pain Hospital in Scottsdale, AZ for $3.2 million.
As our population’s health continues to grow, companies such as Nobilis will be needed. The health care industry will continue to grow and the investment opportunities will also continue to grow despite lagging Medicare payments and the uninsured. It’s to be expected that other companies will join in to create and manage the facilities needed to care for US citizens.