NEW YORK ( TheStreet) -- The Medicare Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) reports that health spending will grow by an average 5.8% a year through 2020, compared to 5.7% devoid of the sweeping health care overhaul. The U.S. is expected to spend $4.6 trillion on health care in 2020, doubling from $2.6 trillion spent last year.

Based on average estimates of analysts polled by Bloomberg, these seven stocks have potential upsides ranging from 5% to 12%, buy recommendations of 69% and hold ratings of 28%.

The stocks are sorted in ascending order of upside potential.
7. Cerner Corporation ( CERN) is a supplier of health care information technology solutions, health care devices and related services. Its solutions are licensed by about 9,000 facilities worldwide, including more than 2,600 hospitals, 3,500 physician practices covering more than 30,000 physicians, and 500 ambulatory facilities.

For the third quarter of 2011, Cerner reported revenue of $571.6 million, up 24% compared to $462.7 million in the year-ago period. Net earnings for the quarter were $78.8 million and diluted earnings per share stood at 45 cents, vs. $60.9 million, or 36 cents in the same quarter previous year.

For the fourth quarter 2011, Cerner forecasts revenue between $575 million and $595 million, and adjusted earnings per share before share-based compensation expense to range from 51 cents to 53 cents. Bookings for the quarter are seen between $630 million and $670 million.

Cerner signed a value added reseller agreement with Cellcura ASA last month, related to sales of the novel CellCura ART Lab Solution.

Of the 23 analysts covering the stock, 57% recommend a buy and 39% suggest a hold. The stock's average 12-month price target is $70.50, or 13% above the current price, according to a Bloomberg consensus.

6. UnitedHealth Group ( UNH) is a diversified health and well-being company offering a broad spectrum of products and services through two distinct platforms: United Health Care and Optum. It serves more than 75 million people worldwide.

Revenue generated during the third quarter 2011 was $25.2 billion, up 6.8% from $23.6 billion same in the 2010 quarter. Diluted net earnings per share increased to $1.17 from $1.14 per common share. Optum generated 22% higher revenue, year-over-year. During the quarter, the company served an additional 220,000 customers and 1.4 million people year-to-date. The company recently paid a quarterly dividend of 16.25 cents per share.

Recently, UNH agreed to acquire XL Health, a sponsor of Medicare Advantage health plans, with a focus on Medicare recipients with special needs. The company has announced that it will invest $8.6 million in Antelope Valley Healthcare District to help deliver quality health care services to residents in the Los Angeles County.

Of the 25 analysts covering the stock, 84% recommend a buy and rest suggest a hold. The stock's average 12-month price target is $59.56, or 16% above the current price, according a Bloomberg consensus.

5. Universal Health Services ( UHS) owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers.

For fiscal 2011, UHS reported revenue of $1.85 billion, up 40% from 2010. Net income was $85.1 million, or 86 cents per diluted share, up 53.1%.

In November, UHS entered into a definitive agreement to acquire certain assets of Knapp Medical Center ("KMC") located in Weslaco, Texas, including a 226-bed acute-care hospital.

The company recently paid a cash dividend of 5 cents.

Of the 21 analysts covering the stock, 81% recommend a buy and the rest suggest a hold. The stock's average 12-month price target is $51.72, or 32.8% above the current price, according a Bloomberg consensus.

4. Masimo ( MASI) develops, manufactures, and markets non-invasive patient monitoring products to improve patient care. Its Masimo Signal Extraction Technology (Masimo SET) provides the capabilities of Measure-Through Motion and Low Perfusion pulse oximetry.

For the third quarter 2011, revenue, including royalties, rose 3% to $104.0 million, vs. 2010 quarter. Product revenue rose 10% to $97.6 million, whereas worldwide end-user business grew 18%. The company shipped 33,400 Masimo SET and Masimo rainbow SET units, expanding worldwide installed base by 16%.

For fiscal 2011, MASI estimates total revenue in the range of $436 million to $439 million, including product revenue between $404 million and $407 million, and royalty revenue between $31.5 million and $32.5 million.

MASI has received the American Association of Respiratory Care (AARC) prestigious Zenith award for the fourth straight year.

Of the 15 analysts covering the stock, 53% recommend a buy and 40% suggest a hold. The stock's average 12-month price target is $25.05, or 37.7% above the current price, according a Bloomberg consensus.

3. HCA Holdings ( HCA) is a provider of health care services. It is comprised of locally managed facilities that include about 164 hospitals and 106 free-standing surgery centers in 20 states and the U.K.

For the third quarter 2011, HCA reported revenue of $7.310 billion, up 5.5% in the 2010 period. Adjusted EBITDA increased 4.0% to $1.412 billion, whereas same-facility equivalent admissions increased 3.8% and same-facility admissions rose 3.2%.

For fiscal year 2011, the company estimates 3% to 5% growth in adjusted EBITDA.

Earlier this month, the company sold the Palmyra Medical Center in Albany, Ga. to the hospital authority of Albany-Dougherty County for approximately $198 million.

Of the 25 analysts covering the stock, 76% recommend a buy and the rest suggest a hold. The stock's average 12-month price target is $30.38, or 42.1% above the current price, according a Bloomberg consensus.

2. HealthSouth ( HLS) owns and operates inpatient rehabilitation hospitals. It operates in 27 states and in Puerto Rico, through its network of inpatient rehabilitation hospitals, outpatient rehabilitation satellite clinics and home health agencies.

For the third quarter of 2011, HLS reported net operating revenue of $497.7, up 8% from the same period in 2010. Adjusted EBITDA stood at $110.5 million, increasing 15.2% and discharge growth at 5.1%.

For fiscal year 2011, HLS estimates EBITDA in the range of $450 million to $455 million. Earnings per share are pegged between $1.18 and $1.23 per share.

The company has declared regular quarterly dividend of $16.25 per share on its 6.5% Series A Convertible Perpetual Preferred Stock, payable Jan. 17, 2012.

Of the 19 analysts covering the stock, 74% recommend a buy and the rest suggest a hold. The stock's average 12-month price target is $25.23, or 42.8% above the current price, according to a Bloomberg consensus.

1. Health Management Associates ( HMA) operates general acute care hospitals in non-urban communities. It currently operates 66 hospitals in 15 states with approximately 10,300 licensed beds and more than 40,500 dedicated associates.

For the third quarter of 2011, HMA reported revenue of $1,400.2 million, up 12% compared to the year-ago quarter. Adjusted EBITDA increased 14.9% to $195.5 million. Diluted earnings per share increased 21.4% to 17 cents. Income from continuing operations was up 24.2% to $49.7 million.

For fiscal 2011, HMA anticipates earnings per share (EPS) in the range of 76 cents to 80 cents.

In November, the company announced that it has been chosen by Integris Health to negotiate exclusively a definitive agreement to joint venture five Oklahoma hospitals.

Of the 24 analysts covering the stock, 63% recommend a buy and 33% suggest a hold. The stock's average 12-month price target is $11.00, or 51.9% above the current price, according a Bloomberg consensus.

>>To see these stocks in action, visit the 7 Health Care Stocks for 2012 portfolio on Stockpickr.