If you are looking for a long-term way to invest money in the stock market, the healthcare industry may be one field that ends up paying out huge dividends.
With an aging population of baby boomers at or nearing retirement age, their needs for increased surgeries, preventative medicine, and prescription drugs is on the rise. On top of that, they are living longer, which helps with long-term care facilities and the development of new drugs geared towards prolonging life.
Healthcare Sectors that Use GPOs
GPOs help many industries in the healthcare sector save billions of dollars annually. Industries such as hospitals, nursing homes, and private medical practices use them to help stretch their budgets. They also generate billions of dollars for Medicare, to help pass along the savings to consumers. Since their purpose is to cut costs on supplies and services, any GPO related investment will likely prove to be a better investment.
Private practices that have been in business for many years have a loyal following of patients, who often bring in referrals via word of mouth. This can make investing in stocks for the private sector a sound investment. In fact, many private practices can be extremely successful for decades if run properly. For example, many private practices offer services or treatments that go beyond the regular scope of insurance which can prove costly and are more profitable for the practice. Patients using online installment loans for beauty procedures or even medical emergencies create revenue spikes for a private practice which goes well for your long term investment.
While the possibility of lawsuits is always in the mind of investors, pharmaceutical companies can still prove themselves to be a smart investment for your money if you invest in well-established companies with long-standing histories of producing high-quality drugs. Drug companies big and small use the same process in the development of new drugs. Each one goes through a preliminary experimental stage, which then advances to preclinical lab testing in animals and then if that testing shows positive results, the drug companies go to the FDA to get their approval to do clinical testing on humans. If a new drug has a breakthrough, it can generate a massive amount of sales which, if you own stock in that company, can turn a large profit for you.
The aging population, combined with people living longer, means that the need for nursing homes and assisted living facilities is on the rise. The sources of income for these facilities comes mostly from government-funded agencies, including reimbursements paid through Medicaid or Medicare, private insurance, and self-payees. There are also other services not covered through the government or insurance companies that generate additional income such as hospices and private home care. Additionally, companies that offer drug dispensing have contracts with nursing homes and, in many cases themselves, the owners of these facilities have other companies that supply resources to the nursing home, making them even more lucrative.
Alternative Care Centers
Hospitals must adhere to government regulations which include taking care of every person that walks through their doors regardless of that person’s ability to pay. As such, they often have trouble receiving payments. On the other hand, private emergency health care and urgent clinics have the ability to pretty much pick and choose what insurance companies they accept and for patients who don’t have insurance, they pay cash after each visit so there’s no bad debt affecting their profits.
Biotech: Is it Worth the Risk
The biotechnology industry focuses on the development of novel drugs. It also does extensive clinical research for treating diseases as well as medical conditions. However, with the long-term process involved in creating a new drug, it can take many years, even a decade or longer to produce one that passes all testing and meets all of the FDA requirements for approval for human use.
The healthcare industry has many sectors that are worthy of your investment. Just make sure to check their prior history ahead of time.