Leading vendor of cloud-based services for medical facilities Athenahealth, Inc. (ATHN) recently revealed that Cerner Corporation (CERN) certified athenaNet, which is Athenahealth’s bundle of cloud-based offerings, as interoperable with its network. The Cerner Interoperability Certification Program is intended to lead to composite platforms that will change delivery of health care.
The review process of Cerner awarded athenaNet the upper most rating (Gold level). Athenahealth may now exchange administrative, financial and clinical information with other offerings from Cerner.
Athenahealth’s web-based deployment provides a low-cost scalable service while its flexible rules engine leads to higher efficiency in claims settlement. The Software-as-a-Service (SaaS)-based approach allows for a more flexible delivery mechanism that helps Athenahealth win deals. The company has traditionally enjoyed high customer satisfaction rates, which facilitates a larger number of referrals.
Athenahealth’s unique business model makes it a strong provider of RCM services (athenaCollector) designed for small physician practices. Its EHR product (athenaClinicals) is a key player in ambulatory settings.
We believe that sales of athenaClinicals are likely to remain robust. In addition, the company will harness its newer products, namely athenaCommunicator and athenaCoordinator.
Athenahealth should benefit from its extensive athenaCollector client base, as only a minority of its subscriber base also utilizes athenaClinicals. Cross selling represents a real growth opportunity in the near term. In this regard, Athenahealth has made rapid strides in capturing the EHR business of physician practices. However, this segment is shrinking, as hospitals increasingly absorb physician’s medical practices.
Athenahealth is geared to enter the enterprise segment through its strategic alliance with Microsoft (MSFT) and the acquisition of Proxsys, both completed in 2011. The company has recently signed and executed several enterprise-sized deals, which provide it with a credible and referenceable client base. In early 2013, Athenahealth took over Epocrates, a provider of point-of-care digital solutions in the healthcare industry. The acquisition will enable Athenahealth to increase its user network and improve its brand awareness.
Though the federal stimulus is winding down, the replacement market has been growing. Competition is fierce and larger competitors may benefit from the incumbency factor. Industry stalwarts such as Cerner Corporation offer long-standing seamless products, which integrate inpatient and ambulatory-care systems. Allscripts Healthcare Solutions, Inc. (MDRX) is another competitor in a crowded field. Athenahealth carries a Zacks Rank #3 (Hold).
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