Healthcare Industry Business Brief Analysis: Performance and Outlook

This business brief provides an overview of the healthcare industry, focusing on the United States. It highlights the industry's significant economic impact, with annual spending of $3 trillion and its contribution to the GDP. The report discusses the relationship between economic conditions and the healthcare sector, noting the impact of unemployment on health coverage and the challenges faced in 2016, such as revenue declines. It also examines the positive developments in 2017, including increased share values and improved P/E ratios, driven by factors like an aging population and strong employment. The brief anticipates continued growth in the healthcare sector due to increased demand for services and the prevalence of medical conditions like obesity, while acknowledging potential fluctuations due to factors like drug pricing and affordable care alterations. The report emphasizes the importance of healthcare services and its dependence on the country's economic conditions.

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Business Brief
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BUSINESS BRIEF
Summary
Health care
The healthcare is known to provide services to the individuals of the community who
suffer from preventive, curative or rehabilitative diseases. As compared to other countries of
the globe, the United States has the achievement of having the biggest healthcare industry
with an annual spending of $3 trillion. It is expected that by 2018, the industry would be
about 18% f the GDP of the country (Stoakes, 2015).
While economic progress leads to improvement of the healthcare industry, economic
turndown leads to a reduction of services and downsizing in budgets. As a result of
destabilisation of the nursing labour market, there are shortages beyond the recessionary time
frame. Health insurance is a part of the healthcare industry where the country’s economy
makes a mark. Increased unemployment leads to reduced health coverage for individuals. The
performance of the country in 2016 was not up to the mark, characterised by rolling off of
drug patents and drop in revenues and earnings. The decline in the sector was 7.1%
(Ameritrade, 2017).
2017 promises to be better than the previous year as the economic planning is solid. For
example, the 61 shares in the category of Standard & Poor's 500 healthcare industries have
increased by 8.9% in 2017 (Shell, 2017). In addition, there is an increased demand for
advanced healthcare services, due to increase in ageing population and strong employment.
The improvement is also due to improvement in the P/E ratio at 43.71 this year (Financial
Times, 2017).
Researchers expect that the recent growth in the healthcare sector would continue in
the next year. The rationale can be attributed to enhanced demand for services, ageing
population and increasing prevalence of medical conditions such as obesity (Ameritrade,

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BUSINESS BRIEF
2017). Employment creation and strong financial conditions would change dividend
payments, mergers, and acquisitions. Nevertheless, fluctuations might be possible due to
various factors.
Paraphrased summary
The United States of America is prominent on the global scale for having the biggest
healthcare industry. The country’s industry treats people with diverse forms of medical
complications such as preventive and curative diseases. The annual spending is $3 trillion and
18% of the GDP of the country would come from this industry in 2018 (Stoakes, 2015).
There is a direct positive relationship between economic progress and improvement if this
industry, while economic downturn reduces the services. Sever shortage of nursing staff
beyond the recessionary period is a result of destabilisation of the same. Health insurance is
dependent on the country’s economy, and thus employment deters health coverage of many
individuals (Ameritrade, 2017).
The year 2016 saw a very poor performance of the health sector of the country when
compared to the last few years. The pharmaceutical companies struggled to combat revenue
and earning decrease due to increased scrutiny of drug prices. The present year has robust
balance sheets and better cost structures that would promote the economic scenario. An
example is the increase of 61 shares in the category of Standard & Poor's 500 healthcare
industries by 8.95 in the present year (Shell, 2017). It is to be mentioned in here that the
demand for healthcare services is increasing with each passing day. This is a result fo the
improvement in the P/E ratio, standing at 43.71 in the present year (Financial Times, 2017).
The growth experienced recently would drag till the next year. The reasons for this
assumption include demand for services, the high prevalence of obesity and ageing

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population. Employement would also amplify services such as the dividend payments. Drug
pricing and affordable care alteration would lead to changes in stocks (Ameritrade, 2017).