Shredder,
If you are looking to invest in health care(which is a very big 17% of GDP universe) you have to define the subsection. If you are interested in investing in for-profit hospitals the most immediate way would be to invest in companies like Tenet Healthcare(stock ticker THC) or its competitors which trade openly on the exchanges. Other plays would include the health insurance subsector like United Health (UNH), Aetna(AET,i think), or Wellpoint(WLP). But as the previous poster stated the universal health care ball rolling around in Washington makes it a gamble to invest in these waters. Although I doubt the hospitals will take much heat, the insurance companies raking in profits most definitely will. The question is whether the heat is just words on TV to get Senator XYZ elected or whether actual reforms with pricing and profit caps or some ill conceived notion of single payer.
As you mentioned already other possible ideas are Big Pharma(Merck/Pfizer/GSK), Small->Large Biotechs (Amgen/Genentech/Celgene/Gilead etc etc), or generic pharma (ie Teva etc). If the system actually undergoes a shakedown in 2008 where society and more importantly congress finally wakes up to the fact biologics costing 50K per year per patient arent worth the 3 extra months of life that they provide, then I think generic pharmaceuticals will probably be the only one to benefit from the changing landscape. Of course this is all an assumption. Realistically, I want to see some change "on the ground" before believing that our society will actually attempt to reign in and/or reduce our entitlement costs and largesse.
