Mixed in among the mandates and Medicare cuts were changes that allow Medicare to move to a new reimbursement approach called bundle payments. This approach would have Medicare issue a single payment for an episode of care (for example, a hip replacement) instead of paying each health-care provider separately. The different providers would, by necessity, need to work very closely with each other to keep costs down and split the payment appropriately.
How does a transition to bundled payments help EHR vendors? The new reimbursement method provides incentive for health-care providers to connect their systems more so than ever before. There’s a lot of data that needs to be shared to effectively coordinate care and determine how much money each provider should get. EHR vendors that provide integrated systems across multiple care settings should be positioned well to attract new customers.
Several vendors offer solutions across multiple care settings already. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) sells systems for physicians, hospitals, community health centers, home health agencies, and hospice providers. Quality Systems, Inc.(NASDAQ:QSII) markets products for physicians and hospitals. Cerner Corporation (NASDAQ:CERN) branches out more that most, with technology to support physicians, hospitals, long term care facilities, pharmacies, home health agencies, and hospice providers.
Cerner Corporation (NASDAQ:CERN) seems to be the most likely publicly traded company to emerge as the biggest winner from both HITECH and Obamacare. That’s because hospitals will probably be the key player in the coming world of bundled payments. Around 10% of hospitals using a complete EHR system to obtain federal incentives reported implementing a system from Cerner Corporation (NASDAQ:CERN). That figure is even higher for hospitals getting incentives by using EHR modules, with nearly 22% reporting that they adopted Cerner Corporation (NASDAQ:CERN)’s technology.
That isn’t to say that companies that don’t offer products across multiple care settings, like athenahealth, Inc (NASDAQ:ATHN), won’t continue to be successful. These companies will need to showcase their interoperability with EHR vendors in other health-care areas. The ones that can connect tightly with other systems should still do well.
Double helpings and more
With HITECH and PPACA, President Obama has treated some of these EHR vendors to a double helping and then some when it comes to stock gains. Shares of Cerner Corporation (NASDAQ:CERN) have quadrupled since Obama’s first inauguration. athenahealth, Inc (NASDAQ:ATHN) has tripled.
How well any of these companies perform in the years ahead will depend largely on how effectively they adapt to changes from new reimbursement approaches. And, of course, future decisions in Washington could make any of them winners or losers.
The article Obama Treats These Companies to a Double Helping originally appeared on Fool.com.
Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends athenahealth and Quality Systems.
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