According to a recent IDC report, electronic health record (EHR) penetration is projected to grow to 80% by 2016. Growth will be driven by continued government incentives, expansion in cloud computing, and advances in mobility technology. In 2009, EHR market adoption stood at 25%. Healthcare IT players are benefiting from this strong growth.
Athenahealth’s (NASDAQ:ATHN) Q2 revenues grew 33% over the year to $103.5 million, marginally shy of the market’s estimate of $103.8 million. EPS of $0.24 was ahead of the Street’s target of $0.23 for the quarter.
During the quarter, the company reported collections of $2.3 billion to client accounts, compared with $1.8 billion reported a year ago. It ended the quarter with 35,409 active medical providers for athenaCollector, of whom nearly 25,000 were physicians. A year ago, it had less than 29,500 providers with 20,824 physicians. Adoption of athenaClinical is also growing. The company ended the quarter with close to 8,560 active medical providers with 6,151 physicians, compared with 4,848 providers and 3,444 physicians a year ago. athenaCommunicator saw medical providers growing from 1,936 providers and 1,198 physicians to 8,642 active medical providers and 6,306 physicians.
Athenahealth expects to end the current year with revenues of $425 million-$430 million with EPS of $0.90-$1.00. The Street was expecting revenues of $428.7 million with EPS of $0.98.
Recently athenahealth announced plans to acquire Boston-based Healthcare Data Services. HDS is a provider of web-based offerings for population health management and analysis of healthcare information. It also provides comprehensive analysis of healthcare data. Athenahealth will leverage the acquisition for its own web-based services and Software-as-a-Service (SaaS) products to provide a more flexible delivery mechanism to customers.
Athenahealth is also looking forward to being able to offer value-based payment models through the acquisition. Value-based payment models are based on risk and reward models and include features such as performance-based payment, global budgets for patient care, and bundled payment strategies. Athenahealth is hopeful that with HDS it will be able to reduce costs and improve care coordination so as to meet the requirements of these new payment models.
Athena’s Growing Customer Relationships
Athenahealth also continued to build strategic relationships during the quarter. It deepened an existing relationship with Cogent HMG, a leader in hospital medicine and critical care. Through the partnership, Cogent HMG will extend the use of athenaCollector to support Cogent’s national growth and care quality goals by enabling its more than 1,000 hospitalists and intensivists across more than 100 hospitals. It also announced a partnership with Health Management Associates to deploy athenahealth’s solutions for HMA’s employed physician network of more than 1,200 providers operating in fifteen states in more than 300 locations.
Athenahealth’s stock is trading at $91.93, with a market capitalization of $3.31 billion. It touched a 52-week high of $97.37 last month.