In my opinion, health care is the most difficult industry for novice investors to understand. 

With so many stakeholders involved in developing and manufacturing any given medical product, it is often hard to obtain a firm grasp of what is shaping the future of this industry. 

In this series, I will be analyzing the health care industry using a top-down approach to help you understand the current and future environment that will determine the success or failure of the efforts of health care companies.

Obama’s Health Care Plan

Probably the most capricious entity is the federal government.  With many political figures working on so many social and political agendas, the topic of health care can often become fad-like within Congress; however, the Obama Administration has made it clear that health care is close to the top of its agenda. 

Obama’s plan will provide millions of Americans with stronger health care coverage while lowering the cost of health care per family by as much as $2500.  Oh, and he wants to do all that without raising taxes to pay for the coverage. This plan may prove to be a double edged sword for the health care industry.  Personally, I feel that this is too ambitious of a goal to not have any ramifications on taxes and health care companies.  Many companies will be hurt by the increased competition and lower margins and will be pressured to lower prices, possibly discouraging innovation as well. Obama plans to achieve this $2500 in savings mainly by increasing investment in health care IT and by increasing competition in the insurance industry.  I realize that an increase in the use of health care IT would lower expenses through the elimination or reduction of administrative inefficiencies, but to the tune of $2500 per family? Unrealistic. Regardless of my views, Obama still plans on providing health care insurance to millions of people who are currently lacking coverage.