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H-P, AMA to Enhance Health Care

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Hewlett-Packard Company (HPQ - Free Report) reportedly collaborated with the American Medical Association (AMA) whereby the tech giant will provide necessary technology support and advice to help medical professionals and organizations serve patients promptly. The AMA unites various medical doctors and medical students across the U.S. to formulate vital policies related to professional activities, public health and overall health care. Financial details were not divulged.

Per the terms, H-P will offer AMA members and staff certain customized products at a special discounted rate. H-P’s offerings span its Compaq and Pro series of PCs which will expedite mobility for remote patient care and provide practitioners with high-quality displays for viewing medical images.

We think that the act of providing a special discount for AMA members is nice on H-P’s part. Profit making is indeed a business goal, but H-P’s attempt to volunteer for public health care is encouraging as it will likely improve brand image.

In February, H-P initiated a health care affiliate program whereby hospitals and health care organizations can avail its hardware support along with software support from other autonomous vendors in a bundle. The arrangement will be cost effective, while allowing the professionals to improve patient care.

The U.S. government's endeavor to expand the information technology industry and make it a major component of health care reform will help drive IT spending in the health care segment over the coming years. We believe that HP, with its strong position and relentless contribution toward the sector, would be able to capitalize on the government’s health care initiatives.

Apart from health care, H-P continues to win deals from various sectors. Despite its deal prospects, H-P’s fundamentals will remain an area of concern, due to the weak consumer segment and PC market issues. However, H-P’s decision to shift focus toward the higher-margin cloud computing arena and leadership in the PC market, where it remains ahead of Dell Inc. and Apple Inc. (AAPL - Free Report) are encouraging.

Currently, H-P has a Zacks #3, implying a short-term Hold recommendation.

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