NextGen Healthcare Information Systems, a full subsidiary of
Quality Systems Inc.
) and a player in the health care information technology market,
recently revealed its intention to accept the Electronic Health
Record (EHR) Association's EHR Developer Code of Conduct to
enhance medical safety, care, outcomes and efficiency. NextGen
Healthcare will concentrate its efforts on protocols such as
safety of the patient, privacy and clinical documentation.
The EHR Association, which created the code in conjunction
with different stakeholders, will check and alter the code as and
when necessary. It welcomes that all EHR players, irrespective of
membership, should accept the code. The Association provides a
road map for EHR developers regarding how to implement the
The Electronic Health Record (EHR) Association is a
collaborative trade association of over 40 vendors which provide
a large proportion of EHR to inpatient and outpatient settings in
the U.S. The Association upholds that an early acceptance of EHR
by providers will be in the interest of all concerned parties,
including patients and providers. The EHR Association partners
with the Health Information Systems Management Society
Quality Systems runs a pure-play business model in an industry
with a number of catalysts, which provoke frequent speculation
about mergers and acquisitions. Of late, the condition of its
pipeline metric has mostly not been encouraging.
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
) 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. While fresh projects have
shrunk in number, the replacement market is growing.
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 hospitals.
Currently, the stock retains a Zacks Rank #5 (Strong Sell). We
are more positive about other stocks such as
Merge Healthcare Incorporated
) which carries a Zacks Rank #2 (Buy) and is expected to do
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