Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Allscripts Healthcare Solutions Inc (MDRX), General Electric Company (GE): Understanding the Massive Market Potential of EHRs

Page 1 of 2

Over the past five years, electronic health records, or EHRs, have become the modern backbone of many medical facilities. EHRs store patients’ health records digitally to be accessed over internal and external networks, dramatically improving the efficiency and accuracy of patient care.

Room to grow
According to a technology survey conducted by Physicians Practice, 57% of physicians stated that EHRs improved the overall workflow of their practices, and 57% reported a return on investment from their purchase of an EHR service.

General Electric Company (NYSE:GE)

63% of physicians currently use a fully implemented EHR system, which suggests that there is still room for companies in this field to grow. Therefore, the federal government has set up a “meaningful use” financial incentive program to expedite the adoption of EHR technology. To date, the government has paid practices $35 billion in EHR subsidies.

Of the top five EHR vendors in America, only two — Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) and General Electric Company (NYSE:GE) — are publicly traded. Privately owned Epic Systems currently holds patient records for 40% of the U.S. population, leaving second-place Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) trailing in a distant second. However, industry critics have warned that Epic’s dominance of EHRs could stifle innovation and technology improvements in the field.

Struggling in second place
Over the past decade, Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) grew into a $2.7 billion company through a series of mergers, acquiring Misys, Eclipsys, dbMotion, and Jardogs LLC. Acquiring these health care IT companies enabled Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) to develop a range of EHR products that could be used by single physician practices as well as large hospitals.

Although shares of Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) have risen 46% over the past 12 months, its second quarter earnings disappointed Wall Street. The company reported an adjusted loss of $0.05 per share, down from the $0.16 it reported in the prior-year quarter. Analysts had expected Allscripts to earn $0.10 per share. That big drop was attributed to its crumbling operating margin, which declined from 11.2% in the prior year to 2.5% in the second quarter.

Revenue rose 6.8% to $344.8 million, but also missed the consensus estimate of $357 million. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX)’ bookings (executed contracts), however, rose to $214.1 million, a 10% year-on-year gain and the company’s highest quarterly level since the fourth quarter of 2011, and its contract revenue backlog increased 12.7%. This means that even though the company is struggling toreturn to profitability, demand for its EHR services remains high.

Page 1 of 2
Loading Comments...