Healthcare Sector of US | Assignment

Running head: HEALTHCARE SECTOR OF U.S
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Healthcare Sector of U.S
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HEALTHCARE SECTOR OF U.S
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Introduction
Economic cycles impact all the sectors of the economy inclusive of the health care.
During periods of economic progress, the healthcare industry improves significantly. On the
other hand, economic downturn often results in service reductions and budget cuts in the
healthcare sector and hence hiring freezes and layoffs. Moreover, significant segments of
healthcare industry such as nursing labor market are destabilized leading to adverse outcomes
like severe shortages which often extend beyond the recessionary period. Health insurance is also
another segment of the healthcare industry that is affected by an economy of the country. In the
United States, for example, many Americans receive health coverage from their employers.
Therefore, when unemployment is high, many individuals go without health coverage, and the
amount of money spent on health products reduces considerably (Ameritrade, 2017). This
paper explores the performance of healthcare industry in the United States in 2016 and 2017. The
article culminates by providing a performance forecast for this sector in 2018.
The 2016 -2017 Performance
In 2016, the healthcare industry in the United States performed poorly compared to the
previous years. It was the year when the drug patents began to roll off, and scrutiny on drug
prices increased. As a result, many pharmaceutical firms struggled, and there was a drop in
earnings and revenues. The overall sector is said to have declined by 7.1% (Ameritrade,
2017).
Despite the dreary results in 2016, the healthcare industry seems to be making a return in
2017. The balance sheets of the healthcare companies are solid, their respective stocks are