You’ve waited a month. All the paperwork is done. And you’re ready to go.
It’s the day you’ve dreaded, operation day. You skip breakfast (doctor’s orders). Then make your way to the hospital.
After a final check-in and more questions, it’s lights out…
You finally wake up to a nurse shuffling around. The nurse catches your eye. She looks frightened and scurries out of the room. It’s unsettling.
You quickly look down the bed. Then confusion and fear hits. You’re missing your right leg. But you were scheduled to have the left one amputated.
This story sounds extreme but it happens. A doctor removed the wrong leg of a man in Florida. Each year doctors mistakenly operate on the wrong body parts… and life-threatening healthcare mistakes don’t end in the operating room.
Wrong drug prescriptions are common. The Food and Drug Administration (FDA) reported medication errors cause at least one death every day and injure approximately 1.3 million people annually in the United States.
Left unchecked, medical errors will increase with our aging nation. According to Pew Research Center, roughly 10,000 Baby Boomers will turn 65 today. About 10,000 more will cross that threshold every day for the next 19 years. Healthcare is expanding as our population ages.
According to cms.gov, health spending will hit 19.9% of GDP by 2022. It’s a great place for job security if you’re looking to start a new career.
Money is flowing in to deal with the aging population and to prevent medical errors. One way hospitals reduce errors is through new software. Software and machine use is already skyrocketing in healthcare.
Last week I was in a hospital in Sioux Falls with my grandpa. His pacemaker needed to be updated. The hospital had computers and devices everywhere. In the prep room alone, I saw devices made by Epic Software, Stryker (SYK) and Johnson & Johnson (JNJ)… just to name a few. Many of these devices help in safeguarding against human error.
It’s easy to see how a doctor can make such grave mistakes. Multiple workers stopped in to ask questions and prepare my grandpa. The doctor didn’t even see him for an hour. Crucial information passes through multiple people and stages. (Luckily my grandpa’s procedure went smoothly.)
The new technology assists nurses and doctors in preventing errors. For example, some hospitals now use wristbands that store patient information. Each time a nurse interacts with a patient, the wristband needs to be scanned. It’s a way to ensure the right medication goes to the right patient.
Hospitals buy many new devices and licensed software to improve patient safety. As a result, healthcare businesses are finding new ways to profit.
The chart below shows the growth in the healthcare sector.
This healthcare fund jumped 253% from its low in early 2009. From its peak before the crisis, it’s still up 110%. Healthcare has outpaced other sectors.
As a whole, the healthcare sector doesn’t look cheap today. Yet, prudent investors will find ways to profit.
Johnson and Johnson (JNJ) is at the top of my buy list. It’s a bit expensive today, but a steal compared to other businesses in the area.
Johnson and Johnson is almost a $300 billion company today. It has three main segments: Consumer, Pharmaceutical, and Medical Devices. Johnson and Johnson owns more than 265 businesses that operate in 60 countries. And it’s rewarded shareholders for over 50 years by paying and raising its dividend.
Powerful trends, like increasing healthcare, can create fortunes for investors. It’s important to have the research and “buy lists” ready to go. In the next year I hope to add a few healthcare companies to my portfolio. And you should too.