Imaging and interoperability solutions provider Merge Healthcare Incorporated (MRGE) continues to extend its customer base. The company recently disclosed that its complete iConnect Enterprise Clinical Platform and Merge Honeycomb Archive will be deployed at Graham Hospital in Canton, Illinois.
While iConnect is an interoperability and connectivity platform, Honeycomb is a cloud-based platform which shares, manages and stores diagnostic images. iConnect offers hospitals and imaging centers the ability to create information exchanges within their environments and with other entities. It also provides access to imaging and diagnostic data across disparate sites, geographies, specialties and providers.
The deployment will enable Graham Hospital to improve standards of care. Further, it will improve the workflow of the hospital’s IT resources and decrease costs. The implementation of Merge Healthcare’s offerings will also support the hospital’s effort to meet the Stage 2 criteria of the Meaningful Use incentive program including image-enabling the Electronic Health Record (:EHR). Implementation of the final stage 2 ruling will begin in 2014.
Merge Healthcare is in the midst of a challenging reimbursement environment. Additionally, the macroeconomic woes negatively impacted the market for medical imaging technologies. Notably, general slowdown in hospital spending and low demand for imaging equipment and related technology, a result of the global credit crisis and macroeconomic factors, could result in lower Merge Healthcare product sales.
However, we should not overlook the company’s growth in bookings and recent contract wins. It is commendable that Merge Healthcare continues to ink contracts despite several headwinds. The company is also well placed to benefit from the strong demand for EHR-related software in the foreseeable future on the back of the stimulus bill.
Analysts have been moving earnings estimates higher for the ongoing year over the last 60 days for Merge Healthcare. Accordingly, the stock carries a Zacks Rank #2 (Buy). Other medical stocks such as Cyberonics (CYBX), Given Imaging (GIVN) and Medical Action (MDCI), each carrying a Zacks Rank #1 (Strong Buy) are also expected to do well and warrant a look.
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