2024-06-24 12:41:53 ET
Summary
- Healthcare costs in the U.S. are projected to reach $6.8 trillion by 2030, with various factors contributing to the increase.
- Factors include payment for quantity over quality, increasing chronic diseases, expensive healthcare technology, and reduced competition leading to higher prices.
- UnitedHealth Group Incorporated stands out, benefitting from a strong growth outlook, a fantastic dividend growth profile, and M&A/AI opportunities.
Introduction
One of the things I'm worried about is future medical costs.
According to the Centers for Medicare & Medicaid Services("CMS"), in 2022, healthcare costs skyrocketed to $4.4 trillion. Despite decreased health services during the COVID-19 pandemic, CMS expects national health expenditures to reach $6.8 trillion by 2030. - PeopleKeep .
According to PeopleKeep , there are a few reasons for this (I picked a few that stood out):
- Medical providers are paid for quantity, not quality . Doctors, hospitals, and others get paid for each procedure. Simply put, the higher the volume, the higher the pay.
- The U.S. population is becoming more unhealthy . According to the CDC, roughly six out of ten adults in the U.S. have at least one chronic disease.
- Newer healthcare technology is more expensive . As much as I love medical innovation, it's expensive and needs to be paid for.
- Hospitals and providers are well-positioned to demand higher prices . The American healthcare landscape has seen a number of mergers and major deals. While this allowed companies to increase service offerings (which is great!), it also reduced competition, increasing pricing power.
- Inflation's impact on the economy . Higher inflation has increased costs for supplies, administration, facilities, and other items.
- The U.S. population is growing older . Although it's a great accomplishment when people get older, the share of Americans aged 65 or older will be almost 25% of the population by 2060.
Read the full article on Seeking Alpha
For further details see:
I'm Sticking To My Call: UnitedHealth Is Among The Best Dividend Growers