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Wayne, Pa.-based Renaissance Health Network has chosen physician-directed population health solution Well-Being Direct from Healthways Inc. (HWAY - Analyst Report) to improve the quality of its population health management solutions. Renaissance Health Network provides Population Health Management services to 150,000 people, including about 32,000 Medicare Beneficiaries.

HWAY’s Well-Being Direct will help Renaissance Health Network – a group of roughly 250 independent primary care physicians – to monitor their patients closely and efficiently manage their overall well-being.

Well-Being Direct makes forecasting models to detect patients who are susceptible to high-cost utilization or poor outcomes. As soon as these patients are identified, physicians can improve their well being by several interventions.

Presently, interventional treatment procedure is highly recommended by physicians as they have better patient outcomes. According to Healthways, patients undergoing regular counseling have 35% to 55% more chance to quit smoking and making changes to their diet and lifestyle than those who only sit back and read about how to improve well-being.

Headquartered in Nashville, Tenn., Healthways makes available targeted and tailored intervention for each person, regardless of the individual’s health condition, age or health care payor. Its fact-based prevention and well-being services providing specific and personalized intervention are presented to consumers in a variety of formats, such as phone, mail, and Internet.

In the second quarter of the year, Healthways reported second-quarter 2013 loss per share of 3 cents in sharp contrast to the year-ago earnings of 15 cents per share. However, the loss was narrower than the Zacks Consensus Estimate and the company’s expectations of a loss of 5 cents per share.

Revenues declined 4.7% year over year to $162.3 million in the quarter, trailing the Zacks Consensus Estimate of $171 million. However, upon exclusion of the two terminal contracts, revenues improved 11.7% from the prior-year quarter.
   
HWAY affirmed its sales guidance for 2013. The company continues to expect sales in a band of $710 million–$750 million, reflecting a rise of 5%–11% year over year. It expects higher revenues for 2013 despite a drop of $80 million on account of the termination of two contracts. Healthways expects higher sales in the second half of 2013 as fresh contracts inked in 2012 take off in the upcoming quarters.

Healthways tweaked its outlook for bottom line to reflect the effect of its cash convertible senior notes due 2018. The company expects earnings per share of about 18 cents–28 cents compared with the prior outlook of 25 cents–35 cents for 2013.

We are disappointed about HWAY’s continued losses and lower year-over-year revenues since the beginning of the year as well as its tapered guidance. Currently, Healthways carries a Zacks Rank #4 (Sell). The company expects to release its third quarter results tomorrow after the closing bell.

While we prefer to avoid this stock, other scrips that are worth a look in the medical services industry include Omnicare Inc. (OCR - Snapshot Report) with a Zacks Rank #2 (Buy). We also consider Bio-Rad Laboratories, Inc. (BIO - Snapshot Report) and INSYS Therapeutics, Inc. (INSY - Snapshot Report), both with a Zacks Rank #1 (Strong Buy), from the medical products industry as worth considering at present.

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