According to a recent report, US EMR Market Outlook to 2017, the electronic medical records (EMR) market is project to grow 15% annually over 2013-2017. Growth will be driven by both private and public players as they continue to invest in services such as the need to adhere to the Meaningful Use Stage 2 (MU2). EMR hardware accounts for 51% of the market, and EMR services and software account for the remaining share. EMR leader athenahealth recently reported healthy quarterly results although guidance was less rosy.
Athenahealth’s (ATHN) Q3 revenues grew 43% over the year to $151.5 million, still falling short of the Street’s target of $155 million. EPS of $0.21 was significantly ahead of the market’s projections of $0.19 for the quarter.
By segment, revenues from business services grew 38% over the year to $141.3 million, and revenues from implementation and others grew 181% to $10.2 million.
Among operating metrics, the company ended the quarter with 47,195 active medical providers using athenaCollector, compared with 38,145 providers a year ago. athenaClincials’s usage increased from 11,401 to 15,483 for the quarter, and 23,024 active medical providers were using athenaCommunicator at the end of the quarter compared with 12,149 providers a year ago.
For the current year, athenahealth projects revenues of $580 million-$615 million with adjusted EPS of $1.05-$1.15. Analysts were looking for revenues of $594 million.
Athenahealth’s Product Upgrades
Athenahealth continues to improve its products and recently announced the successful implementation of MU2 criteria across its nationwide, cloud-based network. Starting in October 2013, its clients could start to practice under the MU2 criteria, and eligible professionals would be able to report per Stage 2 rules. The service will provide them with the ability to apply for attestation in the first quarter of 2014 and thus qualify for funding under the Medicare and Medicaid EHR Incentive Programs.
To ensure completeness of medical records, MU2 began identifying when patients fill prescriptions. Using their services, athenahealth can now report the percentage of clients who fill in their prescriptions, a metric that will help both physicians and the patient. The company is also working on integrating its networks so that Coordinator clients on athenaClinicals are now able to exchange patients seamlessly through athenaNet. With this service, physicians can send parts of medical records of their patients to another physician’s medical record table space without needing to send paper copies around. athenahealth is also currently performing a beta test to deliver HIPAA-compliant text messaging, which leverages the earlier acquisition of Epocrates.
Athenahealth’s stock is trading at $126.60 with a market capitalization of $4.71 billion. It touched a 52-week high of $144.42 in November 2013.