Shares of leading provider of healthcare information software solutions, Merge Healthcare Incorporated MRGE, climbed 2% to $5.14 on Friday, following management’s declaration of the launch of a new business unit – iConnect Network Services. This new business unit is designed to allow hospitals and imaging centers automate the pre-authorization procedure for imaging.
This business unit will also enable the community of healthcare providers, who are connected to health information exchanges (HIEs) or electronic health records (EHR) networks, such as the Surescripts Clinical Network Services (“CNS”), to seamlessly exchange imaging orders and results electronically.
The iConnect Network Services comprises three core offerings: iCNS Orders – which enables physicians to easily send electronic orders with their own native EHR and reduce the volume of lost orders; iCNS Authorize – which reduces the cost and labor associated with prior-authorization by automating and outsourcing the process and iCNS Results – which allows electronic distribution of imaging results into the ordering physician’s EHR.
Conventionally, physicians and other administrative staff are required to contribute 10–20 hours of their work schedule solely for manual authorization tasks, every week. Moreover, it has been found that almost 50% of imaging referrals never materialize into a patient appointment owing to lost faxes and lack of patient follow-up.
Through the introduction of the iConnect Network Services unit, Merge aims to provide better interoperability services to healthcare enterprises to help them efficiently manage orders for imaging, automate the prior-authorization process, and simplify the delivery of imaging results to the ordering physician while saving time.
We believe the iConnect Network Services unit at Merge provides an unique solution against the major challenges faced by healthcare enterprises on a daily basis, while also enhancing the IT infrastructure of its existing clients and attracting new customers in the process.
Management is optimistic about several key factors that are poised to benefit the healthcare IT industry over the next few years, the most notable being the expected rate of growth in domestic healthcare spending. The Centers for Medicare and Medicaid Services (CMS) estimates U.S. healthcare spending to constitute 19.3% of GDP by 2023.
We believe given this fact and the need for image management and image sharing solutions growing rapidly each year, Merge’s iConnect Network Services stands to bring in substantial revenues, going ahead. This, in turn, is expected to ramp up profits at the company.
Currently, the stock carries a Zacks Rank #2 (Buy). Some other well-placed medical stocks are AmerisourceBergen Corporation ABC, Almost Family Inc. AFAM and Affymetrix Inc. AFFX. All these stocks sport a Zacks Rank #1 (Strong Buy).
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