Investment Answers
The following answers below are based on the following case study: My brother-in-law, Representative Howard Hughes, lost his bid for re-election. However, thanks to my efforts, he established himself while in Congress as an astute analyst of the health field and as a consequence, has taken a position as Partner at the prestigious Atlanta investment firm of Keller, Keller, Keller, Keller & Disher. I have decided to take him up on his offer to join him as a Manager in the healthcare division. The other partners have little insight into healthcare other than receiving care. My brother-in-law has been asked to give a presentation on the current status of the health sector and opportunities for investment. My job is to provide him with information on the healthcare industry. Key interest items are in the below questions. To be effective, detail needs to be specific, complete with sufficient depth and detail.
Question #1:
What opportunities would make for wise investments (e.g., hospitals, home health, mental health, rehabilitation services, managed care, physician group practice management, etc.)?
Hospitals are good investments, however according to van der Zwart, van der Voordt & de Jonge, H. (2010) uses the Dutch system in Europe as a model and compares three different healthcare systems to determine the effectiveness of investing in the real estate associated with hospitals. The results that were found from this research is that hospitals are a high maintenance property investment in order to avoid the risks of lawsuits from consumers/patients, they also require large staffing measures, doctors need to be ethical and qualified as well as nurses and other medical staff and the insurance investments associated with hospital investments is excessively high due to the risks that are involved with private investments in hospitals. What would be a better option for Keller, Keller, Keller, Keller & Disher in regards to investing in a hospital would be to invest in an existing hospital that has a strong reputation in the healthcare field in order to minimize the risks that are associated with a start-up hospital effort.
Home health is a much safer investment. According to Tice (May 27, 2014) in Forbes Magazine a very good investment in America to make is in home healthcare. There are many people who cannot even afford to go to a hospital in America and home healthcare accommodates the wealthy class for the convenience of a physician and medical staff being in their home to attend to their needs. Home healthcare also accommodates the middle class who can usually afford home healthcare. Home healthcare also accommodates the low-income bracket which could better afford home healthcare to going to a hospital. In this regard, home healthcare widens the market of potential consumers/patients that would use the home healthcare business investment and increase profits of the investment exponentially. As well, the investment that is required for a home healthcare business is minimal in comparison to investing and/or owning a hospital.
Mental healthcare investment according to Kliff (December 17, 2012) has been spurred on by the violent shootings that occur throughout the United States are constantly driving the need for a stronger system. The United States spends 5.6% of their healthcare budget on the mental healthcare system (Kliff, December 17, 2012). Many of the people that are initially plagued by a mental health problem tend to be about the age of 23 years old at the age of onset and their path through the mental healthcare system is lifelong for many (Kliff, December 17, 2012). The particular investment in the mental healthcare system is a growth industry and a good investment to make. Again according to Kliff (December 17, 2012), the government already spends a large part of their healthcare budget on mental health and government funding could be a great possibility in this area.
Rehabilitation Services
According to the Workforce Investment Act of 1998 set down by the Congressional Budget Office, there is a solid funding stream that is being funnelled into rehabilitating injured workers in order to retrain them to enter the workforce. According to the Bureau of Labor Statistics (2016) 17.5% of persons with a disability were employed and received that disability through an employment-related matter. This opens up a large pool of consumers/patients for an investment in rehabilitation services.
Question #2:
Is technology a good investment risk? If yes, what sort or types of technologies are likely to be in great demand, assuming a national shift to integrated delivery system model and a focus on prevention along with treatment?
Technology is a good investment risk. One of the best technologies to invest in is robotic surgery as it relates to the healthcare field (Curzio Research, 2016). This technology is a $500 billion industry that is excessively lucrative (Curzio Research, 2016).
References
Bureau of Labor Statistics. (2016). Economic News Release. Retrieved from:
http://www.bls.gov/news.release/disabl.nr0.htm
Congressional Budget Office. (2014). Workforce Investment Act of 1998.
Curzio Research. (2016). How to Make Money Investing in the $500 billion Robotics Industry.
Retrieved from: http://www.frankcurzio.com/how-to-make-money-investing-in-the-500-billion-robotics-industry/
Kliff, S. (December 17, 2012). Seven Facts About America’s Mental Healthcare System, the
Washington Post. Retrieved from: https://www.washingtonpost.com/news/wonk/wp/2012/12/17/seven-facts-about-americas-mental-health-care-system/
Tice, C. (May 27, 2014). Best Franchises to Own: Why Home Healthcare is Hot, Forbes.
Retrieved from: http://www.forbes.com/sites/caroltice/2014/05/27/best-franchises-home-healthcare-is-hot/#1e012eea1b26
van der Zwart, J., van der Voordt, T., & de Jonge, H. (2010). Private investment in hospitals: a
comparison of three healthcare systems and possible implications for real estate strategies. HERD: Health Environments Research & Design Journal, 3(3), 70-86.