Health Care Next to Get Revamped By Software

Sep 18, 2011
J. Webster
Comments Off on Health Care Next to Get Revamped By Software

At some point in the near future, health care will get the Borders, Circuit City, and Blockbuster treatment, meaning health care will be streamlined like Netflix has done for movies, Amazon had done for books, Apple is doing for music with iTunes and movies, and Salesforce is doing for communication management systems for businesses. At some point, certain parts of a system become obsolete and rendered useless, health care is up next. Get ready.

You’re not going to be showing a mole on Skype to your doctor and getting a diagnosis just like that. No, not yet. Most of the changes will take place behind the scenes, in how hospitals and doctors communicate and how they manager patients. Electronic medical records. Efficiency in general. Improvements that will save money and lives – tracking a patients medical records overtime will benefit not only the patient but everyone – preventative actions that will save money, too.

Marc Andreessen, the creator of the first web browser, Netscape, wrote an article in the Wall Street Journal called, ‘Why Software Is Eating The World‘, and he talked about how health care would be one of next sectors to see the software based transformation:

Health care and education, in my view, are next up for fundamental software-based transformation. My venture capital firm is backing aggressive start-ups in both of these gigantic and critical industries. We believe both of these industries, which historically have been highly resistant to entrepreneurial change, are primed for tipping by great new software-centric entrepreneurs.

The question though is what companies will provide the new technology and succeed? And what companies stocks should you buy based on this software transformation?

These are companies like Allscripts, Cerner, AthenaHealth, CareFusion, CVS Caremark, Omnicare and Accelrys.

As the Allscripts CEO Glen Tullman told Jim Cramer on Mad Money, his company is also in tune with the changing landscape. Their software is fully compatible with Apple’s iPad, as the device continues to “capture the imaginations of physicians”.

Furthermore, with health care costs rising, the government is looking for ways to streamline the system as well. They are going to try to help these companies doing the streamlining. Doctors are being paid to implement new software programs to save costs. This only bodes well for companies in the health care sector who want to change the way things are done.

Allscripts CEO also said the company is still taking advantage of the federal stimulus, which is paying doctors and hospitals to use Allscripts’ software. Tullman also noted that stimulus money has already been earmarked for payment and is not part of “Obamacare” which is coming under fire.

Tullman also said that Allscripts is benefitting from its size. With over 180,000 physicians, 1500 hospitals and 10,000 other facilities already using the company’s products, mergers in the healthcare industry only make the company more entrenched and more valuable.

What’s really interesting though is how Apple’s playing a part in both the health care and education spaces with the iPad. Again, Apple looks to disrupt a whole sector and act as a game changer. What if all hospitals and doctors starting using iPads? They’d probably then start using Apple computers in other areas, too. Perhaps you should just buy more Apple shares.

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