Increased Health Care Regulations and Hospital Administration Upgrade Cycle Are Dual Demand Curves for Software Systems: A Wall Street Transcript Interview with David H. Windley, Managing Director in the Equity Research Group of Jefferies & Company, Inc.

Wall Street Transcript

67 WALL STREET, New York - October 30, 2013 - The Wall Street Transcript has just published its Health Care IT Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: HIT Consolidation Activity - Electronic Health Records Implementation - Affordable Care Act - Healthcare IT Consolidation Trends

Companies include: HMS Holdings Corp. (HMSY), Cerner Corp. (CERN), Allscripts-Misys Healthcare So (MDRX), Unitedhealth Group, Inc. (UNH), Aetna Inc. (AET) and many others.

In the following excerpt from the Health Care IT Report, a leading industry expert analyst discusses the outlook for the sector for investors:

TWST: You cover a wide range of health care stocks. How does health care IT fit into the overall picture for you right now?

Mr. Windley: It's an attractive space for a couple of reasons. The government incentives to hospitals and doctors to purchase and implement health care IT systems has been and continues to be a catalyst for health care IT vendors. On top of that, though, the secular shifts in health care delivery are driving demand for healthcare IT systems as well. To be more specific, as hospitals and doctors consolidate, as delivery systems integrate, they need to have better business management information systems, on the revenue cycle side and on the patient care side. That's driving them to implement more sophisticated systems. While perhaps government artificiality is a driver, the free market change and evolution in the way we are delivering health care is driving demand as well.

TWST: Within that IT space, where are you focusing your attention right now?

Mr. Windley: We cover half a dozen or so companies, and we're applying our energies fairly evenly. Within that group of companies, there are firms that focus more on selling software and services into the hospitals, as well as some that focus more on the physician office. We also have a couple of nontraditional companies in that space. One, HMSY (HMSY), is focused on fraud, waste and abuse. As government spending for health care is poised to escalate pretty dramatically, the need for an auditor, if I may use the term loosely, to identify areas of inappropriate spending and recoup those monies is of increasing importance as well. The other one-off is a health care IT cloud player for the pharmaceutical development process, Medidata Solutions (MDSO), and they're having quite a successful run.

TWST: What's the latest that you're hearing on utilization and how that could or does impact health care IT stocks?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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