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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
12Stocks.com
2 Sep 14 16:02:09
Nasdaq100 #Stocks Trend $SPLS $TSLA $AVGO $REGN $YHOO $DISH $ATVI $NXPI $CERN $VIAB $FFIV $KLAC $AAPL $LMCA @ http://t.co/YdSIjG11yN
Market Updates
2 Sep 14 14:10:50
$CERN: Cerner Corp to Acquire Siemens Health Services in $1.3 Billion Deal http://t.co/w3RC7jkxAB http://t.co/SgbpEoNkgq
12Stocks.com
2 Sep 14 14:01:15
S&P500 #Stocks Trend $PCG $RAI $MHFI $CFN $TSN $CERN $TDC $DTV $PLL $XRX $LLY $KIM $DPS $SE $MMC $OKE $HST $NI @ http://t.co/RPeaHBZz9y
12Stocks.com
2 Sep 14 14:00:42
Nasdaq100 #Stocks Trend $TSLA $AVGO $ATVI $NXPI $CERN $DTV $CHKP $NTAP $AMAT $STX $YHOO $ALTR $WDC $AMGN $SPLS @ http://t.co/YdSIjG11yN
Daily Contracts
2 Sep 14 13:54:02
Real-Time feed of company contracts, original agreements and executive updates from Cerner $CERN http://t.co/YEBl1Iex0m
Stock Rocket
2 Sep 14 13:27:53
$DGLY is up 940.2% in 3 weeks! Our new penny stock alerts are coming soon: http://t.co/G4xan5kQD5 $SYMC $CERN $ATVI
Wall Street Watkins
2 Sep 14 10:23:45
RT @1nvestor: $CERN is trying to B/O today http://t.co/tlLWmlPJ8O
Derald Muniz
2 Sep 14 10:14:42
$CERN is trying to B/O today http://t.co/tlLWmlPJ8O
Stock Updates
2 Sep 14 10:10:44
$CERN: Siemens sells hospital IT business to Cerner for $1.3 bln http://t.co/q2Li6M2PDF http://t.co/tEhJn71I5k
suriNotes
2 Sep 14 09:18:48
$CERN in ABC Bullish Pattern & Targets http://t.co/7HK9oR68Lp
12Stocks.com
2 Sep 14 08:52:53
S&P500 #Stocks Trend $RAI $TDC $XRX $MHFI $TSN $PLL $DPS $STX $CFN $GT $NI $QEP $MMC $OKE $KIM $CERN $BMS $NSC @ http://t.co/RPeaHBZz9y
12Stocks.com
2 Sep 14 08:52:19
Nasdaq100 #Stocks Trend $TSLA $AVGO $NXPI $STX $CHKP $CERN $DTV $NTAP $ATVI $AMAT $YHOO $ALTR $WDC $AMGN $SPLS @ http://t.co/YdSIjG11yN
James Mark
2 Sep 14 08:11:49
$CERN breaking out
Stephens Inc
2 Sep 14 06:25:06
Morning Brief: Stephens releases research reports on $CERN $FLIR $FRED http://t.co/BTpMubiFs0 #SIResearch
Financial Headlines
2 Sep 14 05:10:41
$CERN: Trending On The Street: Staples, Inc. (NASDAQ:SPLS), Cerner Corporation ... http://t.co/aqtHXOxhA9 http://t.co/GCUW4tvlRF
finsents
2 Sep 14 04:15:50
$CERN:US 2Sep Negative News #Sentiment http://t.co/cPAtGi6wpK #SP500
finsents
2 Sep 14 04:14:06
$CERN:US 2Sep Negative News #Sentiment http://t.co/4HgfWX124u #NASDAQ
12Stocks.com
2 Sep 14 03:02:11
Weekly Nasdaq100 #Stocks Trend $AVGO $TSLA $NXPI $CHKP $AMAT $STX $NTAP $DTV $CERN $ATVI $AMGN $WDC $YHOO $ALTR @ http://t.co/YdSIjG11yN
12Stocks.com
1 Sep 14 16:02:09
Nasdaq100 #Stocks Trend $AVGO $NXPI $TSLA $AMAT $CHKP $CERN $STX $ATVI $DTV $NTAP $WDC $ALTR $YHOO $AMGN $MSFT @ http://t.co/YdSIjG11yN
12Stocks.com
1 Sep 14 16:01:53
Nasdaq100 #Stocks Performance $AVGO $NXPI $TSLA $AMAT $FB $CHKP $MSFT $XLNX $CERN $REGN $EQIX $MYL $ISRG more@ http://t.co/YdSIjG11yN
Dan
1 Sep 14 15:35:11
3 nasdaq 100 members coiled up and ready to go if mkt cooperated $CERN $NVDA $MSFT
Biz News Pioneer
1 Sep 14 14:10:35
$CERN: Cerner to buy assets of Siemens' health business for $1.3 bln http://t.co/e4WOR6BiH6 http://t.co/hoiW8NNfff
FinancialTrader
1 Sep 14 13:56:26
$CERN look to buy above Friday's high as trigger. this looks ready
12Stocks.com
1 Sep 14 12:59:48
Nasdaq100 #Stocks Trend $AVGO $NXPI $TSLA $AMAT $CHKP $CERN $STX $ATVI $DTV $NTAP $WDC $ALTR $YHOO $AMGN $MSFT @ http://t.co/YdSIjG11yN
12Stocks.com
1 Sep 14 12:59:31
Nasdaq100 #Stocks Performance $AVGO $NXPI $TSLA $AMAT $FB $CHKP $MSFT $XLNX $CERN $REGN $EQIX $MYL $ISRG more@ http://t.co/YdSIjG11yN
Scott Thomas
1 Sep 14 12:16:27
http://t.co/ebIBWSPml8 #biotech $CERN
Daily Contracts
1 Sep 14 09:49:01
Real-Time feed of company contracts, original agreements and executive updates from Cerner $CERN http://t.co/YEBl1Iex0m
Stock News Updates
1 Sep 14 09:10:44
$CERN: Siemens sells hospital IT business to Cerner for $1.3 billion http://t.co/USK95ipOOV http://t.co/3ZAIBQ828F
12Stocks.com
1 Sep 14 08:51:56
Nasdaq100 #Stocks Trend $AVGO $NXPI $TSLA $AMAT $CHKP $CERN $STX $ATVI $DTV $NTAP $WDC $ALTR $YHOO $AMGN $MSFT @ http://t.co/YdSIjG11yN
12Stocks.com
1 Sep 14 08:51:39
Nasdaq100 #Stocks Performance $AVGO $NXPI $TSLA $AMAT $FB $CHKP $MSFT $XLNX $CERN $REGN $EQIX $MYL $ISRG more@ http://t.co/YdSIjG11yN
12Stocks.com
1 Sep 14 03:02:14
Weekly Nasdaq100 #Stocks Trend $AVGO $TSLA $NXPI $CHKP $AMAT $STX $NTAP $DTV $CERN $ATVI $AMGN $WDC $YHOO $ALTR @ http://t.co/YdSIjG11yN
TrendTrader4u
30 Aug 14 08:15:16
You can plot the index chart on your stock chart, this way you know how strong your stock is versus the index. ex: compare $QQQ with $CERN
12Stocks.com
30 Aug 14 03:02:31
Weekly Nasdaq100 #Stocks Trend $AVGO $TSLA $NXPI $CHKP $AMAT $STX $NTAP $DTV $CERN $ATVI $AMGN $WDC $YHOO $ALTR @ http://t.co/YdSIjG11yN
Business Headlines
29 Aug 14 16:10:42
$CERN: Cerner to buy Siemens Health Services for $1.3B http://t.co/5Y7Xq2jzdV http://t.co/aapnHwjE8G
12Stocks.com
29 Aug 14 16:02:32
Nasdaq100 #Stocks Trend $AVGO $NXPI $TSLA $AMAT $CHKP $CERN $STX $ATVI $DTV $NTAP $WDC $ALTR $YHOO $AMGN $MSFT @ http://t.co/YdSIjG11yN
12Stocks.com
29 Aug 14 16:02:15
Nasdaq100 #Stocks Performance $AVGO $NXPI $TSLA $AMAT $FB $CHKP $MSFT $XLNX $CERN $REGN $EQIX $MYL $ISRG more@ http://t.co/YdSIjG11yN
12Stocks.com
29 Aug 14 13:00:01
Nasdaq100 #Stocks Trend $AVGO $NXPI $TSLA $STX $AMAT $DTV $WDC $CHKP $ALTR $AMGN $NTAP $SPLS $CERN $ROST $AAPL @ http://t.co/YdSIjG11yN
12Stocks.com
29 Aug 14 12:59:43
Nasdaq100 #Stocks Performance $AVGO $NXPI $TSLA $FB $WDC $STX $CERN $EQIX $AMAT $XLNX $MSFT $LINTA $CTXS more@ http://t.co/YdSIjG11yN
Stockaholics
29 Aug 14 12:43:23
RSII shot up over 100% today! Major Update: http://t.co/GMnQioznZp $SYMC $CERN $ATVI
Shelley Wehmeyer
29 Aug 14 09:27:01
Cerner : Two CIOs Talk Meaningful Use Stage 2 $CERN http://t.co/gE2xu8Swrv via @ForTraders
Bulls vs Bears
29 Aug 14 09:10:41
$CERN: Cerner To Buy Siemens Health IT Business For $1.3 Billion http://t.co/y3P3SYFK9B http://t.co/YDTvfdg6MF
12Stocks.com
29 Aug 14 08:53:03
Nasdaq100 #Stocks Trend $AVGO $NXPI $TSLA $AMAT $STX $AMGN $SPLS $CERN $DTV $GILD $SIRI $MNST $YHOO $AAPL $ALTR @ http://t.co/YdSIjG11yN
Fed Porn
29 Aug 14 08:10:47
@kcbill lol looking to get out of $WAG but its going to take forever to get 15%. Liking $CERN but http://t.co/DHlrBwiyXK
Stockaholics
28 Aug 14 15:38:38
$VIIC ran up 720% Today in an explosive move! Our new picks are coming soon: http://t.co/EdxLh9u5Nx $SYMC $CERN $ATVI
Sean L
28 Aug 14 12:15:53
Looking thru watchlist, saw this weekly squeeze I'm checking out $CERN #thinkorswim http://t.co/1M9OsbPXdc
12Stocks.com
28 Aug 14 08:52:25
Nasdaq100 #Stocks Trend $AMGN $MDLZ $CERN $DTV $AMAT $KLAC $VOD $TSCO $AMZN $CHKP $WFM $VIP $GILD $CELG $AAPL @ http://t.co/YdSIjG11yN
12Stocks.com
28 Aug 14 03:02:23
Weekly Nasdaq100 #Stocks Trend $TSCO $WFM $AMGN $VOD $CHKP $AMAT $VIP $KLAC $AMZN $DTV $CERN $MDLZ $GMCR $ROST @ http://t.co/YdSIjG11yN
Market Compass
27 Aug 14 23:10:38
$CERN: Volume Buzzers: Caesarstone Sdot-Yam Ltd (CSTE), Cerner Corp. (CERN ... http://t.co/zzzwfd4tpa http://t.co/HTSnPIa4Tr
Stock Market Monitor
27 Aug 14 22:10:35
$CERN: Cerner to buy Siemens Health Services for $1.3B http://t.co/1f0d8J0yIs http://t.co/Xjv8ny4szV
Nelson Molina
27 Aug 14 21:33:37
$SPY $AAPL $FB $CERN $JPM $KNDI $MU $LNG $LNG $MIC $WMB $ACT $AGN Get ready for tomorrow. Dog Video Update. Trade ON http://t.co/nNFlDEaVIb
				
				
By  +Follow June 26, 2013 10:55AM
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