NextGen Healthcare Information Systems, a fully owned subsidiary
of
Quality Systems
(
QSII
) and a leading provider of Electronic Health Record ("EHR") and
healthcare IT offerings, recently disclosed that it has inked a
deal with IASIS Healthcare LLC for the installation of NextGen
Practice Management and its revenue cycle management product,
NextGen Practice Solutions. Under the terms of the deal, IASIS will
utilize services provided by NextGen at its 19 hospitals located in
7 states.
IASIS, based in Franklin, Tennessee, owns and operates
medium-sized acute care facilities in suburban and urban areas. It
leases or owns 1 behavioral health hospital and 18 acute care
hospitals with about 4,365 licensed beds. IASIS also owns and runs
a Medicare and Medicaid managed health plan in Phoenix, which
caters to over 195,000 members.
NextGen Healthcare was chosen by IASIS as it desired a fresh
practice management product to improve operational and financial
workflows. Furthermore, IASIS sought proper fitment with the
NextGen Ambulatory EHR as it is presently implementing this
know-how for its associate physicians.
IASIS added that it has chosen NextGen Practice Management on
account of its data base capability. The know-how also grants
better functionality in such areas as aging management, denial
management and tracking of work flow. The organization intends to
improve its cash collections with better accounts receivables
management. In addition, NextGen Healthcare solutions provide solid
support and the company's products are well integrated and
periodically updated.
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 acquisition. In recent times, the
company has not only well managed its ambulatory clinical deals
but, in addition, has nicely executed several enterprise contracts.
Also, on the positive side, we derive comfort from the high
proportion of recurring revenues and steady growth in its NextGen
pipeline.
However, competition is intense from well regarded players such
as
Athenahealth
(
ATHN
),
Allscripts Healthcare Solutions
(
MDRX
),
Cerner Corporation
(
CERN
) and others. Price discounting is frequent, particularly on 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 shrinking for
selling their products as physician groups are increasingly getting
absorbed into hospitals.
In the end, we believe that Quality Systems provides only a
moderate upside to investor expectations. The company's performance
does not sustain its valuation momentum at present, which has
boosted its earnings multiple. We believe that Quality Systems is
one of the more expensive names in the healthcare IT universe. We
currently have an Outperform rating on Quality Systems.
ATHENAHEALTH IN (
ATHN
): Free Stock Analysis Report
CERNER CORP (
CERN
): Free Stock Analysis Report
ALLSCRIPTS HLTH (
MDRX
): Free Stock Analysis Report
QUALITY SYS (
QSII
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research