For years, health care has topped every list of recession-proof businesses. The logic is that people continue to get sick, even in bad economic times. But does that automatically translate into profits for the entire health care sector? Let's take a closer look.
From 2008 to 2012, a span that covers the Great Recession and early recovery, health care spending in the U.S. grew at a sluggish 4.2 percent annually. Compare that to the 8.8 percent annual growth experienced from 2001 to 2003 after the early 2000s recession [source: Nordqvist]. Analysts believe there is a direct connection between the stagnant overall economy and lower spending on medical services.
But the industry still managed to grow during a time when many other sectors saw revenues plummet. Total health care spending in the U.S. — by both individuals and government programs like Medicare and Medicaid — represented 16.2 percent of gross domestic product (GDP) in 2007 and increased to 17.6 percent in 2012 [sources: World Bank, PBS]. And this percentage is expected to grow under the Affordable Care Act.
According to Bureau of Labor Statistics, the health care and social assistance sector will add more than 5.7 million jobs from 2010 to 2020, far and away the largest projected job growth of any industry. The fastest-growing profession is registered nurses, but other areas of nursing are also strong. The BLS predicts a 70 percent growth in demand for both home health aides and personal health aides to serve an aging baby boomer population during 2010-2020 [source: BLS].