After the health care stimulus engenders widespread use of electronic medical records, health care IT companies will have to look past domestic markets for growth, Managing Director Gene Mannheimer of Auriga USA LLC says.
“The good news is you have the stimulus, which is the biggest catalyst for health care IT in recent memory,” Mannheimer said. “Once this stimulus is played out, once those EMRs are purchased — 90% of hospitals have them and 80% of physician offices have them — once that takes place, then there really isn’t much more growth that remains, at least domestically.”
Companies that already receive revenues from abroad include Cerner (CERN), which has about 20% of its revenues from international sources, and Eclipsys, which was recently acquired by Allscripts (MDRX) and also has an international presence, Mannheimer says.
Although Mannheimer is cautious on the health care IT sector’s future growth trends, he says a domestic lull will be more of a longer-term concern, adding that for now there is plenty of business for most of the companies in this space.