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Trump's New Health Care Frontier

- By Adam Lawrence

A Donald Trump presidency has many more eyes focused on health care and the adjustment in health care reform that has been frequently discussed by the president. For investors, this tumultuous time could actually be opening up much greater opportunities not only in the health care sector but also the medical technology and telemedicine industries.

The secret's out. Trump wants to overhaul the Affordable Care Act. OK so maybe that wasn't so much of a secret, but the truth of the matter is there and while current subscribers to government health care remain skeptical, some providers are looking to heavily employ telemedicine and other mHealth options and are taking a different look at preventative as well as follow-up care. To this end, many speculate that even with a health care shake-up, a Trump presidency could also mean a friendly relationship with telemedicine and mHealth organizations.

Also consider that in a recent survey of C-suite individuals, it was found that a resounding 70% of overall health care investment and capital expenditure is dominated by health care IT and telecommunications.

But where many companies like those involved in insurance and interim health care processing are just beginning to enter into the market more deeply, there are other telemedicine- and mHealth-related companies that have been on the path to a much more directly exposed setting within the market.

Just recently mHealth and telemedicine company TeleHealthCare Inc. (TLLT) announced that it signed an annual agreement with Mission Treatment and Recovery in California to use the CarePanda platform on a full-time basis for its entire staff and facility.

The company is working to make it easier for medical groups and health care service providers to adopt and implement telehealth solutions. TeleHealthCare's core technology is CarePanda, a HIPAA compliant platform that includes billing, scheduling, secure messaging, secure forms and e-prescriptions.

Recent developments from the Department of Health and Human Services have management holding high expectations for the future of its platform. The HHS' new rule outlines certain changes to the "confidentiality of alcohol and drug abuse patient records regulations," which states that the department is updating and modernizing the way it regulates and facilitates information. Since the end of last week, shares of TeleHealthCare have increased by as much as 24.5%.

In a statement from Derek Cahill, CEO of TeleHealthCare, "We are very encouraged by this ruling and its anticipated impact for our CarePanda secured messaging application. With the implementation of these rulings, we believe CarePanda will be the go-to application for substance abuse centers who will need to use a HIPAA compliant secure messaging solution."

As a relatively new, emerging level company, a recent press release outlines the plan of operations for the next six months. According to management, the goal in the next six months is to "continue to build a recurring revenue base, expand out the ecosystem and develop sales with resellers and customers in key target markets."

Similarly Humana (HUM) has also joined in on the excitement by teaming up with MDLIVE to boost its Medicare Advantage plans in Georgia. Essentially this will allow certain members of Humana full access to a suite of doctors. These doctors will then have full and confidential access to each patient's personal information while also being able to update it for that patient's primary care physician.

Cigna (CI) is also looking to grab a piece of the telemedicine niche by actually setting the stage for companies like Excellus and Humana. The company gained the spotlight in late September when it announced that Cigna would be adding American Well's AMWell service to its existing MDLive options to enable doctors to treat patients with minor medical conditions remotely. MDLIVE has been something that Cigna has utilized since 2013.

"Since Cigna began offering telehealth to customers 10 years ago, we've learned a few things about how we can help people benefit from their plans in the ways that matter most: increased access and convenience, choice, care quality and affordability," Wijnhoven said. "We also know about the difficulty some Americans have accessing a behavioral health professional, especially in rural areas."

Since early November, similar to other stocks in the industry, shares of Cigna have seen a much more significant recovery. The stock originally was pushed down to lows of $115.03 per share. Since then, however, the market has recovered by as much as 34%.

In comparison to other, more in depth and detailed types of mHealth and telemedicine like that of TeleHealthCare mentioned above, this kind of one-on-one consultation based engagement could allow a more broad assessment of certain nonlife-threatening ailments. This is where companies that can analyze data sets as well as deploy proper actionable responses may be better suited for the long term, especially with the growth of artificial intelligence in business.

Medidata Solutions Inc. (MDSO) is one of these additional companies whose Clinical Cloud Platform has been chosen by many health-related companies to enhance research and analyze results-driven data. France-based Erytech Pharma (ERYP.PA) selected the company's Medidata Clinical Cloud Platform for its own research. The company focuses on developing treatment options that can "starve tumors" for those suffering from things like leukemia. Erytech will use the solution to handle data capture and simplify it into its Phase I-III clinical trials.

Medidata also announced that it will officially launch its eConnect Partner Program. This will essentially allow health care information from multiple sources to become fully integrated into and with the Medidata Clinical Cloud. The company topped street estimates for its fourth quarter. Revenue for the fourth quarter of 2016 was $124.5 million, an increase of $25.6 million, or 26%. This compares with $98.9 million in the fourth quarter of 2015. According to the company, GAAP net income for the full-year 2016 was $29.0 million, up 120% in comparison to $13.2 million, or 23 cents per diluted share, in 2015.

Since suffering a blow in share price from mid-November to early February, shares of Medidata have recovered. The stock saw lows of $47.77 per share, and it has since rallied by as much as 23%.

According to a report from Transparency Market Research, the global mHealth services market is expected to see a 23.90% CAGR during the forecast period from 2014 to 2020. In fact, according to the report, by 2020, the market is projected to be worth over $23.3 billion. But more specifically to telemedicine, the report also shows that the segment of remote monitoring, collaboration and consultancy is anticipating an expansion at a rate of 28.0% CAGR during the forecasting time frame.

The growing population of aging adults poses a near-term growth opportunity for companies operating in this market. The medical community as well as the aging population and even young adults prefer mHealth services as it allows them access to more efficient ways to monitor their own health and chronic conditions. With the industry headwinds boosted by the Trump presidency, health care (and telemedicine specifically) could get the vitamin boost needed to propel the next generation in medical technology.

Disclosure: The author owns no shares in any companies mentioned within this article.

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This article first appeared on GuruFocus.