Quality Systems’ (QSII) wholly-owned subsidiary NextGen Healthcare has been reportedly selected as the preferred electronic health record (EHR) vendor by Ohio Health Information Partnership (OHIP), a non-profit state-designated entity for health information exchange development in Ohio.
OHIP, one of two federally designated regional extension centers (RECs) in Ohio, is responsible for the adoption and implementation of EHR systems across all healthcare provider settings in the state. It has been awarded federal stimulus funding of $28.5 million to help primary care providers migrate to the EHR platform. OHIP targets having brought 6,000 physicians to EHR by February 2012.
Under the collaboration, OHIP will recommend a select group of NextGen products including the NextGen Ambulatory EHR version 5.6, to physician practices, community health centers and critical access hospitals, helping them to attain the “Meaningful Use” criteria and secure incentive under the American Recovery and Reinvestment Act (ARRA). Physicians and hospitals must use EHR meaningfully to be eligible for incentives under the ARRA.
NextGen’s integrated Ambulatory Practice Management and EHR products enable coordination of patient care with formalized clinical and administrative workflows in any health care facility. Moreover, the company’s inpatient products such as NextGen Financials and NextGen Clinicals have extended its services to community and rural hospitals.
NextGen was recently chosen as the preferred vendor for EHR by the Massachusetts e-Health Institute (MeHI), the designated REC in Massachusetts. Also, in June 2010, NextGen was selected by the designated RECs in New York State and New York City. NextGen continues to work closely with other RECs across the U.S. to identify the potential users of its EHR solutions.
Quality Systems develops and markets healthcare information systems that automate certain aspects of medical and dental practices. More than 90% of its annual revenues come from the NextGen division. Quality Systems competes in a fragmented market with larger competitors such as Allscripts Healthcare Solutions (MDRX) and Cerner Corp. (CERN).
We are pleased with Quality Systems’ wide range of products, particularly those of its NextGen business, contributing to a diversified and growing revenue-base. Moreover, we expect the company to benefit from the migration of small physician practices to EHR under the federal Stimulus program.
Quality Systems’ (especially NextGen’s) pipeline remains strong. The company continues to sign on large customers, which bodes well for future growth. However, we remain apprehensive about the fierce competition. Currently, we have a Neutral rating on Quality Systems.
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