Millions of operations, tests and other health care services will happen regardless of world events, economic, political or otherwise.
This article published with permission from InvestmentU.com.
Wes Harris of Charlotte is going to have a heart attack in February. His blocked artery isn’t going to wait to see if Greece or Italy will default on its debt.
John Davidson of Oklahoma City is going into the hospital for a knee replacement next week. The surgery will happen no matter if the S&P 500 is up, down or sideways.
And Carly Nelson, who lives in a suburb of St. Louis, needs a mastectomy after breast cancer was discovered. She will likely start chemo several weeks later. Whether unemployment climbs back over 9% will have no bearing on her decision about treatment.
These procedures and others save lives and improve quality of life. Millions of operations, tests and other health care services will happen regardless of world events, economic, political or otherwise.
When people are sick, they’ll do anything in their power to get better. And it doesn’t matter one iota what else is happening on the planet.
It’s one of the reasons I love the health care sector.
Starting this year until 2030, 10,000 Baby Boomers will turn 65 every single day. And you don’t need a doctorate in demographics to know that older people consume more health care as they age.
That’s why $4 trillion is expected to flood into health care over the next eight years.
Super Bowl of health care
While football players are gearing up for the playoffs, hoping to make it to the big game, I know that I’m already going. But the Super Bowl I’m talking about takes place a month earlier in San Francisco, not Indianapolis.
On Saturday I fly to California for the J.P. Morgan Healthcare Conference. It’s the most important and exclusive health care conference of the year. Typically, you need to manage millions of dollars to get a ticket to sit in on presentations and meet the chief executive officers of some of the largest and most innovative health care companies.
This is my sixth consecutive year attending the conference and it always generates a ton of new ideas.
Presentations are expected from the likes of Pfizer (NYSE: PFE), Celgene (Nasdaq: CELG) and AstraZeneca (NYSE: AZN), as well as some smaller companies like Incyte (Nasdaq: INCY), Illumina (Nasdaq: ILMN) and NuVasive (Nasdaq: NUVA).
I’m looking forward to hearing about the macro picture and how all of these companies plan on capitalizing on the millions of new patients and trillions of new dollars that are on the cusp of entering the system.
As a result, I’m particularly interested in diagnostics and genetic sequencing. We’re already at the point where doctors know that specific cancers will or won’t react to certain treatments based on genetic mutations. But we’re in the very early stages of this type of science. Within the next 10 years, by reading our genetic code, doctors will be able to understand so much more about what keeps us healthy and what makes us sick.
And in order to gather that information, medical professionals will need tools — machines, consumables, tests, etc. — in order to gather and interpret all of that data.
I expect diagnostics and medical technology to be huge winners not only in 2012 but over the next decade or so. The Oxford Club’s Investment Director Alexander Green has been bullish on medical technology for a while now, discussing it at length in The Oxford Club Communique’s 2012 Forecast Issue.
Interestingly, on New Year’s Eve, I had dinner with a health insurance executive, a surgeon and a computer programmer. For half of the evening, we talked about the changes technology is bringing to health care. It further confirmed what Alex and I have been saying for a while now. This sector is going to be huge.