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Health IT Stocks: A Good Long-Term Bet?

By  +Follow June 26, 2013 10:55AM
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Efforts to encourage the use of electronic medical records, or EMR, have existed since at least 1996 when the Health Insurance Portability and Accountability Act was passed with the intention of more effectively combatting insurance fraud. Along with the Affordable Care Act (ACA) this previous legislation has been bolstered by the Physician Quality Reporting Initiative that seeks to incentivize physicians and hospitals around the country to adopt a modernized medical records system.

Bloomberg recently reported that the U.S. ranks only 7th among industrialized nations in terms of its adoption of EMR, with 69 percent of physicians claiming to have used the electronic system in 2012. But one can only imagine that the number will increase, and that it will do so in the short-term; according to Accenture research, the $24 billion dollars in revenue generated globally by the industry in 2012 is set to increase some 10 percent a year through 2015.

Even a precursory look at some of the publicly traded companies that have become involved in the IT side of the health industry would seem to corroborate this. McKesson Corporation (MCK), is one such example. The $25.7 billion market-cap company is trading at $114.82, up 22 percent over the last 12 months.

The same can be said for Cerner Corp. (CERN), a $16.33 billion market cap company with shares at $96.35, up nearly 20 percent on the year, as well as Allscripts Healthcare solutions (MDRX), a $2.2 billion market cap company trading at $12.75 per share and up over 25 percent in the past year.

EMR seems to be the inevitable way of the future for how medical records are kept, and a host of other developed countries are way ahead of the U.S. in effectively utilizing them. But there have been a number of controversies that have arisen along with the increasing adoption of digitized records in the U.S. since the ACA was first approved in 2010.

Reports have surfaced that harmful and at times lethal doses of drugs have been administered to patients due to human error in the process of data entry and network delays in updating medical information. A December study from the Pennsylvania Patient Safety Authority found that over an 8-year period, 3,099 incidents of medical errors due to difficulties with electronic records were reported. 1,142 of those incidents were reported in 2011 alone, more than twice the number that were reported in the previous year.

Furthermore, companies that design EMR software are not beholden to any form of government oversight in the way that, say, medical equipment makers are forced to report injuries and deaths resulting from the use of their products. There have also been privacy concerns with regard to how a patient’s medical information may be sold for marketing purposes.

That said, some 200,000 deaths per year are the result of medical malpractice, with a great number of these resulting from preventable errors, including those involving a patient’s health records. EMR errors appear to be most common when a hospital first changes over to an electronic system, but there is plenty of evidence to suggest that a properly functioning EMR system actually helps to reduce these errors, and along with them, the resulting financial burden on the health care system in general. And this could mean that health IT stocks have a bright future ahead of them indeed.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for CERN
The Legacy News
3 Mar 15 09:57:13
Cerner Downgraded to Hold at Topeka Capital Markets $CERN http://t.co/TAT8sUXkpc
Pensive
3 Mar 15 09:44:42
RT @theflynews: 25 notable stocks were issued analyst downgrades today, including $AXP $BP $CERN $PVH $TIF and $YUM. Our full list: http://…
Stock Rocket
3 Mar 15 09:30:45
Our Penny Stock Pick On $BYSD Gained Another 80% Today! Get Our New Pick Early: http://t.co/E259yKbTSj $SYMC $CERN $ATVI
Market Int Center
3 Mar 15 09:30:32
Cerner $CERN Trading Near $70.69 Support Level ( http://t.co/fzkGpykOH1 )
Jared R. Miller
3 Mar 15 09:22:12
RT @KCBizJournal: .@Cerner is among the final three groups in the running for a monster $10 billion federal contract: http://t.co/qRDGtyDhr…
StockNewsWires
3 Mar 15 09:21:05
$CERN: Insider Selling: Cerner President Zane M. Burke Sells 50000 Shares ...: http://t.co/g3mn4UA07B
Jon Stephens
3 Mar 15 09:17:27
RT @KCBizJournal: .@Cerner is among the final three groups in the running for a monster $10 billion federal contract: http://t.co/qRDGtyDhr…
KC Business Journal
3 Mar 15 09:17:02
.@Cerner is among the final three groups in the running for a monster $10 billion federal contract: http://t.co/qRDGtyDhrj $CERN
The Fly
3 Mar 15 09:01:57
25 notable stocks were issued analyst downgrades today, including $AXP $BP $CERN $PVH $TIF and $YUM. Our full list: http://t.co/ZgTFz0f8Jo
Daily Contracts
3 Mar 15 08:04:01
Real-Time feed of company contracts, original agreements and executive updates from $CERN http://t.co/FsjHnPUZrR
KCBJ Health Care
3 Mar 15 07:38:09
Two of our area's five billionaires made their fortune at @Cerner: http://t.co/MnpmsZboLW #KCbiz $CERN
Breaking News
3 Mar 15 07:26:02
$AKR $CERN: Insider Selling for March, 3rd (AKR, CERN, CHE, ETN, HOME, IHG ...: http://t.co/RnWolGmrYQ
Jeremy Hill
3 Mar 15 07:24:36
RT @cvpayne: #MMWCP Upgrades $PANW $AAPL $GRUB $VSTO $NXPI Downgrades $CERN $X Love that Wall Street jumps on bandwagon after huge moves @F…
US Consumer News
3 Mar 15 07:23:26
Cerner President Zane Burke Sells $3,592,500 in $CERN http://t.co/7bRzFDqvcY
US Banking News
3 Mar 15 07:23:23
Cerner President Zane Burke Sells $3,592,500 in $CERN http://t.co/aJs5TojHLU
The Fly
3 Mar 15 07:01:26
On The Fly: Analyst Downgrade Summary $AKS $AXP $ARUN $BP $CERN $FITB $FSL $HLX $HTGC $KBR $LTC $LPI $MNKD $MV... http://t.co/0B3z30bFeZ
Paul Karatzas
3 Mar 15 06:42:33
RT @cvpayne: #MMWCP Upgrades $PANW $AAPL $GRUB $VSTO $NXPI Downgrades $CERN $X Love that Wall Street jumps on bandwagon after huge moves @F…
david peltier
3 Mar 15 06:21:31
Analysts' Actions: Citigroup, Cerner, Quest Diagnostics, U.S. Steel and More http://t.co/vCgav8B1RV via @TheStreet $C $CERN $DGX $X
Kathy Lust
3 Mar 15 06:09:26
RT @cvpayne: #MMWCP Upgrades $PANW $AAPL $GRUB $VSTO $NXPI Downgrades $CERN $X Love that Wall Street jumps on bandwagon after huge moves @F…
Charles V Payne
3 Mar 15 06:08:34
#MMWCP Upgrades $PANW $AAPL $GRUB $VSTO $NXPI Downgrades $CERN $X Love that Wall Street jumps on bandwagon after huge moves @FoxBusiness RT
john smith
3 Mar 15 06:07:07
$CERN - Statement of Changes in Beneficial Ownership (4) http://t.co/euPyLLWP2V
$Stocknewsalerts
3 Mar 15 06:01:18
$CERN ALERT: New Cerner Corporation SEC Filing From our Stock News Alerts App
InsiderTradingWire
3 Mar 15 06:00:22
ZANE BURKE M Pres Sells $2,891,177 Worth of $CERN Cerner Corporatio - #Form4 #InsiderTrading - http://t.co/MzmFqrwF3v
InsiderTradingWire
3 Mar 15 06:00:08
NEAL PATTERSON L Chairman and CEO Sells $1,661,980 Worth of $CERN Cerner Corporatio - #Form4 #InsiderTrading - http://t.co/ejvl8j5IcD
john smith
3 Mar 15 05:59:03
$CERN - Statement of Changes in Beneficial Ownership (4) http://t.co/LstmWzhFlh
Breaking News
3 Mar 15 05:59:02
$CERN: New Insider Transaction on CERN by Chairman and CEO: http://t.co/170HDJki9V
Insider Alerts
3 Mar 15 05:58:04
NEW insider transaction on $CERN reported a moment ago: http://t.co/UkabSaLTP9
dailystockplays.com
3 Mar 15 05:57:33
Analyst Downgrades 3/3/15 http://t.co/GOzlO96IXw $ARUN $AXP $BP $CERN $YUM $TIF $PCYC $MDAS $KBR $LPI $PVH $MNKD $OPK $SYT $ESV $FITB $VIVHY
Insider Filings
3 Mar 15 05:57:03
$CERN: BURKE ZANE M sold a net $3,592,500 in CERNER CORP /MO/. http://t.co/mh7uMb1Suh
WKRB News
3 Mar 15 05:06:58
Cerner Co. $CERN Releases Q1 Earnings Guidance http://t.co/cAd1Ne22We
Sleek Money
3 Mar 15 05:04:18
Cerner CEO Sells $3,942,000.00 in Stock $CERN http://t.co/cXEky8JN03
Marlen
3 Mar 15 05:02:54
03/03/15 DOWNGRADES: LTC Properties $LTC Mizuho Buy > Neutral $47 > $46 Cerner $CERN Topeka Capital Markets Buy > Hold $70
InterCooler
3 Mar 15 05:02:46
Cerner Co. $CERN Releases FY15 Earnings Guidance http://t.co/z8GjoAe3r5
BreakingStocksNews
3 Mar 15 05:01:07
$CERN: Cerner CEO Sells $3942000.00 in Stock (CERN): http://t.co/qkzsM8hlYV
ProTradersNews
3 Mar 15 05:01:06
$CERN: Cerner Co. (CERN) Releases Q1 Earnings Guidance: http://t.co/eLiwkfHHrw
Media Sentiment
3 Mar 15 04:19:57
$CERN received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 60
Analyst Ratings
3 Mar 15 04:16:45
Cerner downgraded by Topeka Capital Markets to hold. $70.00 PT. http://t.co/kguvzWvm9I $CERN #CERN
US Consumer News
3 Mar 15 04:15:23
Cerner downgraded by Topeka Capital Markets to hold. $70.00 PT. http://t.co/b881A94MXa $CERN #CERN
BreakingStocksNews
3 Mar 15 03:56:02
$CERN: Topeka Capital Downgrades Cerner (CERN) to Hold: http://t.co/sj0j55hCqJ
Media Sentiment
3 Mar 15 03:45:18
$CERN received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 22
SIAnalystWire
3 Mar 15 03:40:36
Topeka Capital Downgrades Cerner $CERN to Hold http://t.co/wCpplsxy1R
US Stock Ratings
3 Mar 15 03:22:02
Topeka Capital Markets downgrades $CERN from Buy to Hold, target price to $70 http://t.co/ihHDTD6HPU
Briefing.com
3 Mar 15 03:07:00
$CERN: Topeka Capital Markets cuts to Hold
DailyStockPicks
2 Mar 15 22:39:26
This $100M market cap #biotech #stock has gotten 3 orphan drug designations in 3 weeks $CERN $NU $INCY investors read http://t.co/r6XCUvJp21
Stockaholics
2 Mar 15 20:49:53
Our Penny Stock Picks Gained Over 342% In 2 weeks! Get Our Next Alerts Early: http://t.co/y7GlNIs8Gh $SYMC $CERN $ATVI
kevin
2 Mar 15 15:00:58
$cern weekly: is at top of channel though http://t.co/fwwEYu8DMh
kevin
2 Mar 15 14:59:10
$cern daily: http://t.co/WXEei4xUCW
Market Int Center
2 Mar 15 12:29:16
Cerner $CERN Trading Near $73.01 Resistance Level ( http://t.co/PbmlxSaUh6 )
StockNewsWires
2 Mar 15 08:51:01
$CERN: Cerner Co. (CERN) Updates Q1 Earnings Guidance: http://t.co/oo4HZsyRrR
The Legacy News
2 Mar 15 08:41:15
Cerner VP Jeffrey A. Townsend Sells 120,000 Shares $CERN http://t.co/DwsoYKozhu
				
				
By  +Follow June 26, 2013 10:55AM
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