) Enterprise Services arm recently announced that the Wisconsin
Department of Health Services has extended the Medicaid contract
for another five years. The contract, settled at $221.0 million,
builds on the 36-year relationship between the two units.
Per the contract terms, H-P will continue to act as a Medicaid
fiscal agent to Wisconsin Department of Health Services. H-P's
services will help the state to improve Medicaid programs,
deliver more critical health information to a larger number of
healthcare providers and keep pace with nationwide healthcare
reforms in a cost effective manner.
H-P acts as the fiscal agent or the IT provider for Medicaid
programs and the immunization program it manages has been shared
with 19 other states. The need for an efficient Medicaid program
arises from the enactment of the U.S. Healthcare Reforms Bill
which aims to make healthcare more affordable for Americans.
We believe that H-P, with its strong position, would be able
to capitalize on these government initiatives. As per the
contract, H-P will also manage call centers and provide support
to the state's drug refund and estate recovery platforms.
Additionally, H-P will also implement a system-wide technology
refresh with Superdome 2 servers, featuring Intel Itanium 9500
processor series with low-voltage 16 GB memory modules, which
help to increase memory capacity and connect the systems to any
network on air.
H-P will implement a Medicaid Management Information System
(MMIS), a claims processing and information retrieval system
within the department. This will help the agency to quickly adapt
to regulatory changes and provide better healthcare to
H-P has to compete with
Computer Sciences Corp.
) in the Medicaid service space. H-P's growing focus on new
business segments, such as electronic medical records, cloud
computing and the recently-added analytics segment will help the
company grow in the ensuing quarters.
The company is still reeling under pressure from the declining
PC business and a sluggish macroeconomic environment. The company
has also hinted at muted revenue growth in 2014. Moreover,
competition from other technology bellwethers such as
) makes it even more difficult for the company to gain market
share in the cloud and security space.
Currently, H-P has a Zacks Rank #3 (Hold).
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