While the cost of energy, oil, gas and electricity make headlines everyday, very few people are talking about another big cost issue in the CPI: Healthcare.
We took a look at the BLS stats for inflation in August and found this interesting chart.
There are two worrying trends in the chart. Both medical care commodities and medical care services continue to climb unrelentingly. What is causing this and more importantly how do we invest to reap some rewards from this anomaly?
We think there are three key factors at play. First, labor shortages are the primary driver. There continue to be nursing shortages and now nursing strikes and unionization drives, this is inflationary. Second, there are still supply chain issues and with the potential for energy to skyrocket in the near future it is likely that the commodity portion of costs will continue to be high. Third, while covid is abating there are still people getting sick and ending up in the hospital. Covid is now more like a flu and the flu is a costly illness so we can add one more disease to the list of costs hitting the average person from now on.
So how do we plan to invest? We’re looking at pharmaceutical and medical automation companies given the labor shortages, growth in diseases and supply chain issues. We’ll keep you posted on our findings but in the meantime stay tuned and stay solvent…