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Leading vendor of cloud-based services for physician practices and inpatient settings, Athenahealth, Inc. (ATHN - Analyst Report) recently revealed that Lowell General Physician Hospital Organization had chosen Athenahealth’s health information management offering, HDS. This selection is expected to lead to better configuration with the Accountable Care Organization model and improved insight into provider performance. 

Lowell General Physician Hospital Organization therefore graduates to an information engagement model that will enable it to manage financial, patient and provider data at the same time. HDS was chosen due to its capability to amalgamate clinical data, claims and routine data into a solitary view deployable across the network.

Athenahealth should benefit from its extensive athenaCollector client base, as only a minority of its subscriber base also utilizes athenaClinicals. Cross selling represents a real growth opportunity in the near term. In this regard, Athenahealth has made rapid strides in capturing the EHR business of physician practices. However, this segment is shrinking, as hospitals increasingly absorb physician’s medical practices.

Athenahealth is geared to enter the enterprise segment through its strategic alliance with Microsoft (MSFT - Analyst Report) and the acquisition of Proxsys, both completed in 2011. The company has recently signed on, and executed several enterprise-sized deals, which provide it with a credible and referenceable client base. In early Jan 2013, Athenahealth signed a definitive agreement to take over Epocrates, a provider of point-of-care digital solutions in the healthcare industry. The acquisition will enable Athenahealth to increase its user network and improve its brand awareness.

Though the federal stimulus will gradually wind down, the replacement market has been growing. Competition is fierce and larger competitors may benefit from the incumbency factor. Industry stalwarts such as Cerner Corporation (CERN - Analyst Report) offer long-standing seamless products which integrate inpatient and ambulatory-care systems. Quality Systems Inc. (QSII - Analyst Report) and Allscripts Healthcare Solutions, Inc. (MDRX - Analyst Report) are two other well-known players in a crowded field.

The stock currently retains a Zacks Rank #5 (Strong Sell) rating.

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