CMS study predicts healthcare spending may double by 2019

Emerging Healthcare Solutions, Inc. (Pinksheets: EHSI). Unlike other industries, spending on healthcare showed no signs of slowing down and the sector made its biggest one-year jump ever according to a new study by The Centers for Medicare and Medicaid Services (CMS). The CMS study, released this month, estimates that health care spending rose 5.7% in 2009 to a phenomenal 17.3% share of GDP equaling $2.5 trillion – a pace much higher than most previous estimates.

The results of the study also estimate healthcare spending is expected to grow by 6.1% a year on average this decade. By 2019, health-care spending is estimated to double to $4.5 trillion, and it should comprise 19.3% of GDP, nearly one-fifth of the economy. The study is seen as great news for investors in an industry that has been in the forefront of recent American politics.

With the Democratic Senate falling under a filibuster-proof majority and mid-term Congressional elections approaching, many feel that any meaningful health care cost controlling legislation is unrealistic – especially in light of a proposed Republican strategy to filibuster all initiatives leading up to the mid-term elections. In light of this, healthcare investment is seen by many to be a place for potentially high gains as opposed to other lackluster opportunities.

Accordingly, the ongoing healthcare industry boon could be beneficial to many sector players such as Johnson & Johnson (NYSE: JNJ), Pfizer (NYSE: PFE), Gilead Sciences (NASDAQ: GILD) and Pharmaceutical Product Development, Inc. (NASDAQ: PPDI).