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Imaging and interoperability solutions provider Merge Healthcare Incorporated (MRGE - Analyst Report) has extended its customer base as it seeks to provide its complete cardiology solutions suite to Arnot Ogden Medical Center, a member of Arnot Health.

The Merge cardiology suite consists of Merge Cardio and Merge Hemo. While Merge Cardio is an enterprise level image and information system which delivers a patient’s complete cardio record across all cardiac modalities, Merge Hemo automates the cath lab process into an electronic record to enable automated reporting. In Dec 2012, Merge Hemo was selected as Category Leader in the Best in KLAS Awards for 2012 in the realm of Software and Services for Cardiology Hemodynamics. This marked the second year that Merge’s offering has won this award.

The deployment of Merge’s solutions at Arnot Ogden will enable the latter to improve standards of care as it will capture, manage and display multi-modality cardiac images and hemodynamics and ECG data across the enterprise. The implementation of the complete cardiology suite will increase image access and exchange while decreasing healthcare costs at Arnot Ogden.

Management at Arnot Ogden assert that the deployment of Merge Cardio will enhance workflow efficacy and improve time management for physicians. Further, the implementation of Merge Hemo is expected to augment quality control, helped by upgraded organizational environment.

Our Take

It is commendable that Merge has effectively expanded its client base amid a tough reimbursement environment for advanced medical imaging. We are also encouraged by the impressive growth in recent quarters on the back of client wins despite the general slowdown in hospital spending and low demand for imaging equipment and related technology.

Going forward, we are bullish on Merge as it has immense potential in the diagnostic imaging market. As a result, the stock carries a Zacks Rank #2 (Buy). Besides Merge, medical stocks like ResMed (RMD - Analyst Report), Medical Action and MedAssets Inc (MDAS - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy) are expected to do well in the near term.

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