Allscripts Healthcare Solutions (MDRX) recently stated that its Sunrise Enterprise EHR was earlier selected by Springfield Medical Center, an acute care hospital in Mobile, Alabama. It is one of the few Gulf Coast medical facilities to be lately informed it will receive funds from the Medicare program for showing meaningful use of the Electronic Health Record (“EHR”).
Springhill is the first medical facility in the area to be a recipient of an EHR incentive check as per the federal government’s HITECH Act. The hospital achieved stage 1 of the HITECH Act by using the Sunrise Enterprise EHR. Springhill believes that it will benefit to the extent of $2 million in stage 1 incentives besides being eligible for an additional $2 million to $2.5 million by meeting all three stages of meaningful use by 2015.
Springhill exceeded each and every one of the large set of requirements that eligible physicians and medical facilities must satisfy to receive funding under stage 1. According to a spokesperson of Allscripts, the Springhill Medical Center has a distinguished history of using its know-how to implement quality enhancement. For its part, the Medical Center stated that its return on investment from the cutting edge EHR provided by Allscripts can be easily gauged.
Allscripts has widened its user-base, after its mergers with Misys and Eclipsys, and increased cross-selling opportunities. While Allscripts is a market leader, in the ambulatory space, with its software generating about 50% of electronic prescriptions in the U.S., Eclipsys, on the other hand, was a leader in physician utilization of Computerized Physician Order Entry.
The acquisition of Eclipsys provides the company with an acute care product for sale in concert with its ambulatory services. Thus, Allscripts’ new multi-billion dollar addressable market is the market segment seeking a composite solution across both physician and hospital practices.
Allscripts continues to benefit from the financial incentive program for medical providers for complying with federal EHR requirements. The size of the opportunity is large and penetration still relatively low. On the negative side, Allscripts must compete with a large number of competitors such as Athenahealth (ATHN), Cerner (CERN) and Quality Systems (QSII). Our Neutral recommendation on the stock is backed by a short-term Zacks #3 Rank (Hold).
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