NextGen Healthcare Information Systems, a full subsidiary of
), recently revealed that it has partnered with Microsoft
Corporation (MSFT) to create and commercialize the NextGen
MedicineCabinet application. This is the first client-focused
portable healthcare IT offering intended for the Windows 8 set
up, from Microsoft and NextGen Healthcare partnership. With the
NextGen MedicineCabinet application, clients can develop,
maintain, monitor and compare their medical records.
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The NextGen MedicineCabinet application is free. It may be
acquired at the Microsoft app store. Customers can add a drug to
their list along with the dosage and then run the application.
The customer receives notices for each dose and can indicate
his/her response. Medical records aid patients and doctors can
thereby avoid accidental irregularities in care.
Quality Systems runs a pure-play business model in an attractive
industry with a large number of catalysts, which provoke frequent
speculation about mergers and acquisitions. On the positive side,
we observe the high proportion of recurring revenues. Of late,
however, growth of its pipeline metric has seen a falling trend
along with progressively fewer signed deals on a quarterly basis.
The company has made multiple acquisitions to bolster organic
growth. Its acquisitions are expected to facilitate its entry in
the small hospital segment. We are concerned about execution risk
emanating from Quality Systems' entry into the rural inpatient
Moreover, competition is intense from well regarded players such
Allscripts Healthcare Solutions
) and others. Price discounting is frequent, particularly at the
lower end, and Software as a Service (SaaS) based model appears
to have exacerbated pricing pressure.
Quality Systems has traditionally focused on providing solutions
for physician practices. However, core ambulatory EHR providers
such as Quality Systems will see opportunities for product sales
shrink, as physician groups are increasingly absorbed into
We have a long-term Neutral recommendation on the stock which
carries a short-term Zacks #3 Rank (Hold).