Regardless of whether or not health care reform comes to pass in the U.S., or the form it takes should it pass, adoption of electronic health records will accelerate along with increased product demand for health care IT vendors.

“There is a little bit of perception out there that no health care reform is bad for hospitals and it’s bad for the health care IT vendors,” said Steve Halper, associate head of U.S. research at Thomas Weisel Partners. “This is an incorrect view, in our opinion. The reason why it’s not going to happen is because the ARRA incentives are in place, and they are independent of health care reform.”

While Halper predicts a rising-tide-lifts-all-boats scenario for the health care IT space, he believes those companies with the best product suites will benefit the most.

“We think that Cerner (CERN) and Epic are the top two companies in the space,” Halper said. “After that it would be Eclipsys (ECLP) and McKesson (MCK). And I think their product suites are competitive, but Cerner and Epic are probably growing faster.”

The analyst also emphasizes that much in the same way not all health care IT vendors are created equal, not all physicians are on the same path of EHR adoption.

“We are a little more cautious towards physician office software vendors,” Halper said. “The large groups will make these investments, but the smaller physician groups will probably drag their feet a little bit more and we might not see the acceleration in demand from that segment right away.”

This entry was posted on Friday, March 12th, 2010 at 12:17 pm and is filed under General Investing. You can follow any responses to this entry through the RSS 2.0 feed.