Healthcare spending is on the rise. The amount Americans spend on healthcare will grow by 5.5% annually over the next decade, according to government estimates. Of course, healthcare spending growth could slow down if, as some politicians have proposed, we establish a new healthcare system altogether. Still, the healthcare industry isn't going away anytime soon, and many companies will continue to profit from it -- especially market leaders. 

Taking a buy and hold approach when investing in stocks is proven to be rewarding, with the likes of Warren Buffet -- the greatest contemporary investor -- making much of his fortune by employing this strategy. And arguably the most important factor when looking for stocks to buy and hold for a long time is whether the company in question has a strong competitive advantage. Here are two companies in the healthcare sector that are excellent stocks to buy for those with a long-term investing focus: Intuitive Surgical (NASDAQ:ISRG) and Johnson & Johnson (NYSE:JNJ)

Wooden cubes with letters on them spelling health, and the first H is turning over to show a W.

Image Source: Getty Images.

The leader in robotic surgery

A mere look at Intuitive Surgical's return in recent years would make any investor's mouth water. Over the past five years, the company's shares have increased by 243%, vastly outpacing the 57% return of the S&P 500 over the same period. Intuitive Surgical has achieved this feat thanks to its da Vinci Surgical system, which assists medical personnel when performing surgeries. There are 5,406 of the company's pioneering robotic surgical systems installed worldwide -- an industry-leading figure.

Further, the majority of these systems (a little more than 3,000) are installed in the U.S., with Europe and Asia coming in second and third place, respectively. This means that although they are costly, the da Vinci systems could find their way into many more hospitals as time goes by. During the third quarter, the company grew the number of installed da Vinci systems by 12% year over year. However, Intuitive Surgical isn't relying solely on the sale of its da Vinci systems to drive its revenue growth. Once they are installed, they give way to many more opportunities for the company to grow its top line.

For instance, Intuitive Surgical sells instruments and accessories that go along with these systems. Sales of instruments and accessories is tied to the number of procedures performed with its da Vinci systems, and that number keeps growing. During the third quarter, the number of procedures grew by about 20%, while revenue from instruments and accessories increased by 25% compared to the year-ago period. Further, the company's services revenue -- which includes system maintenance, repair, and other services -- is growing as well.

During the third quarter, Intuitive Surgical's service revenue grew by 15%. Overall, about 71% of the company's revenue now comes from recurring sources. Of course, Intuitive Surgical faces some competition. Medtronic recently announced its own robotic surgical system and is looking to challenge Intuitive Surgical in this area.

Still, Intuitive Surgical has a strong lead in this market, and its competitive advantage keeps growing as more of its da Vinci systems are installed, with the number of installed systems reaching a new high during the company's last quarter. Further, the company recently started selling its Ion Endoluminal System, which assists doctors when performing "minimally invasive biopsy in the peripheral lung." Lung cancer is the leading cause of cancer deaths around the world, and this device, as Intuitive Surgical CEO Gary Guthart said: "extends our focus beyond surgery."  

And given that only 2% of surgical procedures are performed using robotic assistance worldwide,  there's significant room for Intuitive Surgical to grow. The company will likely continue to be a winner in the foreseeable future, making it a good stock to buy and hold for a long time. 

The largest pharmaceutical company in the world

Johnson & Johnson is the largest pharmaceutical company in the world by market cap, but despite its standing in the industry, some might scoff at the idea that the pharma giant is a good investment. After all, Johnson & Johnson has encountered headwinds of late. Most notably, the company is facing a litany of lawsuits, some of which are costing it money. In October, Johnson & Johnson entered into a $10 million settlement agreement with two Ohio counties (Cuyahoga and Summit) that removed the company from the first federal lawsuit against opioid manufacturers; the settlement was not an admission of guilt on the company's part. Johnson & Johnson also paid $37.2 million to four plaintiffs who claimed the company's talcum powder products contained asbestos and led to them getting cancer. These are not the only product liability litigation issues the medical giant faces.

Despite its recent troubles, it would be a mistake to ignore Johnson and Johnson; here are two reasons why. First, the company is well diversified across several pharmaceutical fields, including oncology and immunology. In the immunology segment, the company's key growth drivers are Stelara and Tremfya, sales of which for the third quarter increased by 30% and 69% year over year, respectively. The company's top-selling drug in its oncology segment -- Imbruvica -- saw a 31% increase compared to the year-ago period in the third quarter.

Second, beyond its pharmaceutical products, Johnson & Johnson operates in other fields in the broad medical sector, including its medical devices segment -- where the company offers surgical systems, among other products and services -- and its consumer segment, which includes sales of popular over-the-counter products such as Neutrogena.

Johnson & Johnson isn't likely to produce dazzling top-line growth. During the third quarter, the company's sales increased by a mediocre 1.9%, while its net earnings decreased by 55.4%. However, for investors with a long-term focus, the company is still a buy. Johnson & Johnson's diversification across several segments within the healthcare sectors gives the company a strong competitive advantage: About 70% of the company's sales come from products that are among the top two in terms of global market share in their respective segments.

On top of that, Johnson & Johnson has grown its operational earnings for 35 years straight. Its long-standing dividend streak -- currently standing at 57 consecutive years of dividend increases -- speaks volumes about its ability to perform relatively well regardless of economic downturns, which is a quality investors with a buy and hold philosophy will appreciate.

Lastly, Johnson & Johnson currently trades at a reasonable 15.55 times future earnings. For all those reasons, and despite the inevitable ups and downs Johnson & Johnson will encounter, the pharma giant looks like an attractive stock to buy and forget.