If you have not read the first and second parts of this article, please follow the prior links.  By now, you should be getting a quick  glimpse of the trends that are influencing health care companies operations and decisions.  In my first article I discussed how the government’s and FDA’s agendas are affecting the health care industry, and in my second article,  I examined recent M&A activity, generic competition, and trends within the CRO industry. In this article, I will touch over the things that are plaguing Managed Care Organizations (MCO) and Medical Supplies companies and forces that are inspiring growth in Health Care IT.

Decline in Hospital Admissions

The decreasing number of people admitted into hospitals is hindering the managed care industry.  Although the healthcare industry has been typically perceived as recession-proof, due to the increase in unemployment and the decline in the amount of disposable income

In my opinion, health care is the most difficult industry for novice investors to understand.  With so many stakeholders involved in developing and manufacturing any given medical product, it is often hard to obtain a firm grasp of what is shaping the future of this industry.  In this series, I will be analyzing the health care industry using a top-down approach to help you understand the current and future environment that will determine the success or failure of the efforts of health care companies.

Obama’s Health Care Plan

Probably the most capricious entity is the federal government.  With many political figures working on so many social and political agendas, the topic of health care can often become fad-like within Congress; however, the Obama Administration has made it clear that health care is close to the top of its agenda.  Obama’s plan will provide millions of Americans with stronger health care coverage

With stocks having been beaten down so badly these past few quarters, investors are getting tired of losing money. However, for those of us who are not about to retire, we have to allow some room for patience in our investing strategies. Investing in a company whose stock price appreciates year-over-year is optimal, but if you’ve got some time to spare, invest in companies that you know will be more valuable 10 to 15 years down the road. With heart disease persisting as the number one killer worldwide, you should be looking to prop up your portfolio over the long run with stocks dedicated to fighting heart disease . Combined with the aging world population, these two stocks are poised to capitalize on the declining health of the eldest generation:

Medtronic Inc.

Medtronic Inc. [MDT:

As M&A activity peppers the Healthcare industry, prudent investors are searching for the next big acquisitions. 2008 left I-banks hanging their heads as weak market conditions and restricted lending created a stale environment for M&A activity. However, the dire need for drug companies to protect their future sales brings out the big players in the industry looking to strengthen their pipelines and diversify products to ease investors’ fears over the $160 billion in revenues of drugs coming off patent protection by 2016.  Investors looking for M&A may want to keep their eye on these two attractive companies.

Cephalon, Inc. [CEPH: 66.31, -0.70 (-1.04%)]

Cephalon, Inc is a bio-pharmaceutical company that focuses on developing and selling drugs pertaining to central nervous system disorders, oncology, pain, and addiction.  CEPH’s most bankable drug, Provigil, accumulated about $1 billion in revenue in 2008.  Provigil is approved for the treatment of narcolepsy, shift work