Additional comments from the WSJ:TWST: What about the physician space?
Mr. Mannheimer: On the physician side, the side of the business that I find slightly more attractive is that you only have 20% to 25% penetration of electronic medical records in doctors' offices. Even if we back out the stimulus entirely, it's a market that's underpenetrated and prime for growth. And then factoring in the stimulus, now the government is all of a sudden providing incentives to upgrade these physician offices by 2015. That really accelerates the growth curve. So companies like Allscripts (MDRX) and Quality Systems (QSII) in particular that are pure-plays in physician EMR are poised to benefit. They are seeing, if not record bookings, then certainly double-digit growth in bookings over the prior year.
TWST: Are there any companies with particularly innovative products that give them an edge in the market?
Mr. Mannheimer: One comes to mind, and that's athenahealth's (ATHN) approach to the revenue cycle. Let me elaborate on that. Revenue cycle, which is really nothing more than billing and managing collections of the physician office, that's an old business. Those systems have been in place for 20 or more years.
Now athenahealth comes along with a disruptive approach to the revenue cycle, and their approach is one of pay nothing upfront and pay as a percent of collections on the back end. And not only that, but there is nothing to install or maintain; athenahealth outsources the whole billing and collection functions on behalf of the physicians. That's an innovative way to approach an old problem, and I think that judging by the growth in their physician subscribers and their revenue growth, it certainly is catching on and they've got something very unique in the market.