Well it's happening.
It appears that Washington is about to enact sweeping legislation that will be the greatest shift in public policy in decades.
Yes, we can bemoan the lack of a completely private enterprise driven system but the reality is Big Brother is here and he's not going away.
Without a doubt there will be implications for investors that need to be considered; and it's not all bad news from an investment perspective.
This is a social policy change that will result in many more Americans being covered by healthcare. This increases the pool of medical consumers significantly and will be a positive for well-run, cost-conscious medical companies. Efficient diagnostic firms such as Quest Diagnosticand Lab Corp of Americawill likely see higher service utilization rates.
Pharmaceutical companies have the potential to benefit from increased prescription volume (though cost controls may be significant).Abbott is poised to capture share market despite the new healthcare landscape.
And let's not forget that increased government involvement will mean higher levels of government bureaucracy. Look for medical records companies that will benefit as paper disappears and electronic data becomes reality.
The jury is out with regards to the impact on economic growth in the United States. It appears as if taxes will be rising for those making over certain income thresholds and history has shown that tax increases don't stimulate the economy but mute it.
While it is possible that the negative of higher taxes will be offset by the increased economic churn from increased healthcare utilization, a safer assumption is that economic growth will be negatively impacted.
So invest in cash flow strong companies that can prosper in a slower growth environment. Johnson and Johnsonand Proctor and Gambleare companies that sell products less discretionary in nature and generate earnings that are less sensitive to economic cycles.