Today I’m not going to write about our country’s economic crisis; everyone else has done that.  And I’m not going to reiterate my conviction that the worst of the bear market has passed, and that the future for many stocks will be very good from here.  Savvy investors know that the best stocks will lead the way higher long before the man on the street loses his recently-reinforced fear of investing.

So today I’m looking ahead, and focusing on one of our country’s other great challenges, health care, where I see reason for optimism.

Back in an old issue of Cabot Wealth Advisory, discussing the problem of escalating health care costs, I wrote the following:

“The root of the problem, in my opinion, is that we confuse the right to decent health care for everyone–which we as a country can afford, with the right to the very best health care–which we as a country absolutely cannot afford.  And with the consumer insulated from the actual costs of health care, the mechanism that regulates demand in other industries is lacking.  So we continually use more health care than we can afford, and then fail to recognize that our insatiable demand is the reason for the ever-increasing costs.”

In response, one of my readers, J. R. from Illinois, wrote this:

“To achieve maximum health, emphasis on different approaches is needed.  The medical-pharma system we have is a wasteful failure in every respect.  Most of all it overlooks the simple fact that a healthier lifestyle is by far the most cost-efficient and successful approach.  The AMA convinced a generation of fools that all they had to do was rely on the M.D. and his pills and hospitals.   The second problem is that natural substances that work cannot be patented and therefore turned into great profit, so they are ignored.  This is where the market approach really fails.  We are being sold a bill of goods, one that is often deadly.  A new paradigm is desperately needed.”

He’s right, of course.

If we were all truly sensible about our health, we’d eat more fruits, nuts and vegetables.  We’d eat less sugars, fats and refined flours.  We’d eat smaller portions as well.  We’d exercise.  We’d walk more and drive less.  And we’d take the stairs instead of the elevator.

But as country, we don’t.  The majority of Americans are overweight; 32% are technically obese.  And there is no direct economic penalty for the bad decisions we make!  Instead of taking responsibility, we’ve ceded responsibility to the “experts,” ignoring the fact that those experts often have a conflict of interest.  As a result, our health care costs continue to climb faster than any other major segment of the economy.

Yet I’m optimistic about the future of health care, for two big reasons.  The first, ironically, lies in the recent collapse of our nation’s financial institutions.

Less than a year ago, when my second daughter was a senior in college majoring in journalism and international relations and looking for guidance on the real-world employment situation, she remarked that visiting the college career office was a waste of time.  “All they’ve got are jobs in investment banking.”

Less than a year ago, there was plenty of money flying around in that industry, money that was drawing the best and brightest into a career that produced … um… well, you know.

Today, I’m glad my daughter stuck to her own interests and wasn’t seduced into a job in investment banking.  Today she has a job that challenges and satisfies her, while many of her classmates who went into investment banking are no doubt hauling out those resumes again and looking for industries that are not imploding.  And where might they end up?

I’m guessing some of them will end up in the health care industry, which continues to grow every year.  And I expect that some of them will use their brains to make some important changes there, like rewarding people for staying healthy!

The second reason for optimism on health care lies in the marriage of information technology and genetic technology.

We all know how the computer and the Internet have changed the world in recent decades, creating millions of jobs while enabling increased productivity in most sectors of the economy.  Information technology has already made substantial improvements in the health care industry as well … but I think the best is yet to come.  I see great potential for genetic medicine to unravel the roots of illness.  I think the insights gained through genetic studies will help us learn better how we can stay well.  And I think that applying information technology to the challenges of the industry will actually lead to improved productivity for America!

In fact, I ran across something interesting recently in Technology Review, the magazine of Massachusetts Institute of Technology.  In it, University of Chicago economics professor Austan Goolsbee recounted that if a time-traveler went back to 1910 and told people how many phone lines would exist today in the U.S., they would say it would be impossible, because every American would need to be a telephone exchange operator!  Americans in 1910 couldn’t see, of course, that telephone operators would be put out of work by technology.  And they couldn’t imagine that such job-destroying technology would be a good thing!  But here we are, and does anybody want to go back to 1910?   Job destruction and job creation are healthy byproducts of an always-improving society, and we should welcome them.

Today, according to Goolsbee, “There’s a joke within economics that 40 years from now, every economist will be a health-care economist, because if you simply extrapolate from the current trend, the whole economy will be health care.”  We know, of course, that that won’t happen.  But we can’t yet see the details of how we will improve our health without consuming an increasing part of our budget.  Yet it will happen!  And the upside, according to Goolsbee, is that improved health will add tremendously to productivity.

He says, “I could easily see some emerging combination of medical science, biotechnology, and computing as the foundation for much of our economic growth going forward.”

Admittedly, there will be challenges along the way, not least of which will be the ethical questions that arise when technology leaps ahead of cultural norms.

But when I look at the advances made in unraveling the genetic mysteries of our bodies, most made just in the past decade, I can see the foundation of a great wave of progress focused on keeping people healthy rather than fixing people who are sick.

That’s one reason my favorite investments today are in biotechnology and genetic technology.  The other reason is that these stocks are strong!

And now a tip, which was passed on by a kind reader.  If you’re wondering whether there might be a better plan for your Medicare Plan D dollars, check out http://www.medicaresaver.com.  It’s useful and it’s free.