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Cardinal Health's (CAH) Velocare to Enhance at-Home Care
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Cardinal Health, Inc. (CAH - Free Report) recently announced the launch of a supply chain network and last-mile fulfillment solution, Velocare. The solution is capable of reaching patients in a few hours with critical products and services needed for hospital-level care at home.
Cardinal Health at-Home Solutions, via a tie-up with Medically Home, will now be supporting a Medically Home health system customer with Velocare, thereby collectively enabling scaled, high-acuity care at home.
The latest technology offering, launched as a pilot with Medically Home, is expected to significantly strengthen Cardinal Health’s Medical business.
Significance of the Launch
Per a recent study by McKinsey & Company, it is estimated that up to $265 billion worth of care services for Medicare fee-for-service and Medicare Advantage beneficiaries could shift to the home by 2025 without a reduction in quality or access. The research also reveals the way stakeholders — including payers, healthcare facilities and physician groups, home-based care providers, technology companies and investors — could see the substantial value of providing patients with care in the comfortable settings of their homes.
Velocare is expected to bring together Cardinal Health’s capabilities via a combined offering intended for health systems and telehealth providers, among other entities that transport high-acuity care to the home. Legacy Cardinal Health’s capabilities include global logistics and distribution expertise, management of a large network of suppliers and vendors, and access to a wide range of home-based care providers. The pilot will likely test the use of new technology, new order-handling processes, small-format depots and short-haul delivery vehicles to enable safe and consistent hospital-level care at home.
Patients who have been admitted to brick-and-mortar hospitals with issues like severe pneumonia and complicated urinary tract infections, among others, are now likely to receive high-quality, safe, hospital-level care at the comfort of their homes. The Velocare pilot includes real-time evaluation of the technology, service levels, effectiveness and patient experiences, besides plans for future growth in new markets.
Cardinal Health’s management is upbeat about expanding its at-Home Solutions supply chain and logistics services to now reach patients receiving hospital-level care at home. Management also feels that advancing the concept of the availability of care to patients irrespective of their location with the pilot of Velocare demonstrates its ability to operate and grow within the developing hospital-at-home model.
Medically Home's management believes that the ability to further scale the delivery of goods to the home will likely advance the rapidly growing hospital-at-home market, driving scale and efficiency for its high-acuity care model.
Industry Prospects
Per a report by MarketsandMarkets, the global supply chain management market is estimated to grow from $28.9 billion in 2022 to $45.2 billion in 2027 at a CAGR of 9.4%. Factors like rapid growth in retail and e-commerce, and technological advancements in the supply-chain industry are expected to drive the market.
Given the growing market potential, the new launch seems to have been timed well.
Recent Development
This month, Cardinal Health reported its first-quarter fiscal 2023 results, where it recorded solid growth in its top line. The company also affirmed its focus on the Medical Improvement Plan initiatives for the full fiscal year.
Price Performance
Shares of the company have gained 53.7% in the past year against the industry’s 15.2% decline and the S&P 500’s 17.4% fall.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has gained 0.9% against the industry’s 36.6% decline in the past year.
ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 23.6% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 21.8% against the industry’s 28.8% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 61.1% against the industry’s 15.2% decline over the past year.
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Cardinal Health's (CAH) Velocare to Enhance at-Home Care
Cardinal Health, Inc. (CAH - Free Report) recently announced the launch of a supply chain network and last-mile fulfillment solution, Velocare. The solution is capable of reaching patients in a few hours with critical products and services needed for hospital-level care at home.
Cardinal Health at-Home Solutions, via a tie-up with Medically Home, will now be supporting a Medically Home health system customer with Velocare, thereby collectively enabling scaled, high-acuity care at home.
The latest technology offering, launched as a pilot with Medically Home, is expected to significantly strengthen Cardinal Health’s Medical business.
Significance of the Launch
Per a recent study by McKinsey & Company, it is estimated that up to $265 billion worth of care services for Medicare fee-for-service and Medicare Advantage beneficiaries could shift to the home by 2025 without a reduction in quality or access. The research also reveals the way stakeholders — including payers, healthcare facilities and physician groups, home-based care providers, technology companies and investors — could see the substantial value of providing patients with care in the comfortable settings of their homes.
Velocare is expected to bring together Cardinal Health’s capabilities via a combined offering intended for health systems and telehealth providers, among other entities that transport high-acuity care to the home. Legacy Cardinal Health’s capabilities include global logistics and distribution expertise, management of a large network of suppliers and vendors, and access to a wide range of home-based care providers. The pilot will likely test the use of new technology, new order-handling processes, small-format depots and short-haul delivery vehicles to enable safe and consistent hospital-level care at home.
Patients who have been admitted to brick-and-mortar hospitals with issues like severe pneumonia and complicated urinary tract infections, among others, are now likely to receive high-quality, safe, hospital-level care at the comfort of their homes. The Velocare pilot includes real-time evaluation of the technology, service levels, effectiveness and patient experiences, besides plans for future growth in new markets.
Cardinal Health’s management is upbeat about expanding its at-Home Solutions supply chain and logistics services to now reach patients receiving hospital-level care at home. Management also feels that advancing the concept of the availability of care to patients irrespective of their location with the pilot of Velocare demonstrates its ability to operate and grow within the developing hospital-at-home model.
Medically Home's management believes that the ability to further scale the delivery of goods to the home will likely advance the rapidly growing hospital-at-home market, driving scale and efficiency for its high-acuity care model.
Industry Prospects
Per a report by MarketsandMarkets, the global supply chain management market is estimated to grow from $28.9 billion in 2022 to $45.2 billion in 2027 at a CAGR of 9.4%. Factors like rapid growth in retail and e-commerce, and technological advancements in the supply-chain industry are expected to drive the market.
Given the growing market potential, the new launch seems to have been timed well.
Recent Development
This month, Cardinal Health reported its first-quarter fiscal 2023 results, where it recorded solid growth in its top line. The company also affirmed its focus on the Medical Improvement Plan initiatives for the full fiscal year.
Price Performance
Shares of the company have gained 53.7% in the past year against the industry’s 15.2% decline and the S&P 500’s 17.4% fall.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Currently, Cardinal Health carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 0.9% against the industry’s 36.6% decline in the past year.
ShockWave Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 23.6% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 146.1%.
ShockWave Medical has gained 21.8% against the industry’s 28.8% decline over the past year.
McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 4.8%.
McKesson has gained 61.1% against the industry’s 15.2% decline over the past year.