Backed by the Singapore Ministry of Health, technology services and outsourcing company Accenture plc (ACN) recently launched a National Electronic Health Record (NEHR) system. The contract for developing the NEHR system was awarded to Accenture in August 2010. Financial terms of the deal were not disclosed.
The NEHR system has been deployed across Singapore, to integrate the country’s health care structure. This also makes Singapore one of the first countries worldwide to use NEHR.
The system, designed by the Accenture team, will enhance the quality of health care services, as well as lower service costs, helping service providers offer enhanced health care policies. The system also seeks to eliminate duplication, needless medical tests and faulty mediation.
Given the extent and demands of the system, Accenture teamed up with technology majors to successfully set it up. Therefore, tech behemoths like Oracle Corp. (ORCL), Hewlett-Packard Co. (HPQ) and smaller companies like Orion Health and Initiate Systems Inc. were also involved in the Singapore health project.
Electronic Health Records (EHR) help doctors and hospitals to organize medical records of patients. The system makes it easy for medical practitioners and patients to track clinical histories, without the hassle of storing hard copies.
We believe that the successful implementation of EHR in Singapore will create new business opportunities for Accenture.
In the U.S., the system has been recognized by the government as a core component to national health care reform. The federal government has passed a bill, granting around $19.0 billion in incentives to medical practitioners and hospitals for buying and using EHR systems.
We believe that Accenture has the potential to capitalize on emerging health care deals. However, Accenture may have to face stiff competition from Dell Inc. (DELL), the key supplier into the health care sector.
We are encouraged by the healthy growth that Accenture registered in its recently concluded third quarter of 2011. However, the economic turmoil in Europe and competitive pressure from IBM Corp. (IBM) could considerably rationalize the company’s growth prospects.
Accenture has a Zacks #3 Rank, implying a short-term Hold recommendation.
