A
recent report (http://nnw.fm/K8iRV) on the global Healthcare IT (HIT) market
from Technavio projects an attractive seven percent CAGR for the space over the
next four years, when the U.S. sector alone will generate upwards of $75
billion annually. The analysts at MarketsandMarkets affirmed this outlook in
their report on the sector late last year (http://nnw.fm/UO9j8), projecting
that the global healthcare IT market will see a CAGR nearly twice the Technavio
figure when all sources are accounted for, coming to represent a total market
valued at somewhere in the neighborhood of $228 billion by 2020.
The
biggest names in the industry today are looking to capitalize on this growth,
with players such as Athenahealth (NASDAQ: ATHN), Allscripts (NASDAQ: MDRX), GE
Healthcare (NYSE: GE), Mckesson (NYSE: MCK), Oracle (NYSE: ORCL), Philips
Healthcare (NYSE: PHG), and Siemens Healthcare (OTC: SIEGY) all making sizable
bets on the future of the space. Another important aspect of this growth story
is the proliferation of mobile devices, as the EHR (electronic health records)
landscape becomes increasingly saturated with mHealth features like mobile apps
and digital personal health records. Consider the installed base of some 2.6
billion smartphone users worldwide (http://nnw.fm/xtM0G), a figure set to grow
134 percent by 2020, and you can start to understand why the mobile medical
workplace is perhaps a foregone conclusion. North America, as the currently (and
for the foreseeable future) largest regional segment of the HIT space, is no
doubt where the majority of the global market’s action will be. So it makes
sense to start looking at competent, multiple-threat operators in the
healthcare IT market that are accessible to the average retail investor, and
which have an established footprint in the states.
Trading
under a dollar, with a rapidly growing portfolio of products and service
offerings, Medical Transcription Billing (NASDAQ: MTBC) (NASDAQ: MTBCP) for
instance has made some impressive headway in this sector since its IPO in 2014.
The company has rapidly blossomed into one of the most compelling
full-spectrum, cloud-based EHR (ChartsPro™), practice management (PracticePro™)
and mHealth solutions providers around. MTBC packs a powerful one-two punch of
products and services that collectively constitute a unified, database-driven
and fully integrated WebEHR platform, spanning everything from billing, data
management, transcription, chat scribing, and business intelligence, to
value-added and consultancy services. This is exactly the kind of one-stop-shop
healthcare customers in this market are looking for.
Founder,
chairman and CEO Mahmud Haq, as well as president and Director Stephen Snyder
and CFO Bill Korn, made quite a showing at the 2016 Marcum MicroCap Conference
(http://nnw.fm/Tu5j4) back in June, just before the launch of the company’s
hospital receivables management service via acquisition of New Jersey
healthcare financial specialists WFS Services. The WFS Services acquisition
superbly augmented the company’s already strong position in ambulatory
(outpatient) services and enables MTBC to aggress the huge opportunity of
underserved demand in patient balance collection and aged insurance accounts receivable.
By exploiting its unique technological advantages and vast sums of expertise in
order to serve the ominously compounding need for solutions to the nuanced and
often arduously difficult challenges of collection and aged insurance accounts
receivable, MTBC is setting itself up for long-term growth.
The
company has had a laser-focus on strategic growth toward its 2016 objectives,
scoring a spate of notably appropriate recent acquisitions, including
Renaissance Physician Services (Tennessee), Gulf Coast Billing (Texas), and the
WFS Services deal. And yet MTBC managed to wrap up Q2 with $6.6 million in cash
on the balance sheet. This an extraordinarily visionary approach to this space
for a relatively young company like Medical Transcription Billing, but
management can read the handwriting on the wall: the healthcare IT market is
only going to get hotter. Strengthening its already enviable position in the
sector through shrewd acquisition is how the company set a new milestone for
revenue growth from Q1 to Q2 this year, and the company hopes to continue this
trajectory on the strength of things such as having already developed a
comprehensive ICD-9 to ICD-10 mapping and transitioning solution.
And
it is not just the increasing complexity of the space that will allow
full-spectrum operators like MTBC to prosper amid all this demand growth. As
new systems must be rapidly defined and rolled out to handle an ever more
stringent regulatory environment, mounting demand for knowledgeable consultancy
and expert services will likely continue to increase at a geometric rate.
Medical Transcription Billing will prosper because its suite of offerings is
able to deliver considerably enhanced efficiency and profitability metrics,
something which is of paramount concern to everyone in the industry, as there
exists a pressing requirement to bring down overall healthcare costs.
A
set of common drivers behind all this demand growth are made strikingly clear
in both of the aforementioned reports. Chief among these drivers is the
rise-and-rise of EHR (electronic health records) solutions in general, spurred
on by a concomitance of actors, such as the prevailing lack of in-house IT
capabilities among most sector operators, the ease/robustness of cloud
services, and the inherently complex regulatory environment that just gets more
nebulous with each passing year. The MarketsandMarkets and Technavio reports
mentioned earlier were both keen to acknowledge how everything in the industry
is shifting toward external cloud and SaaS (software as a service) solutions.
One of the fastest growing segments of the HIT market is healthcare provider
solutions, where a projected 16.4 percent CAGR (MarketsandMarkets) shows just
how hot the game truly is when it comes to solving the regulatory compliance/assurance
woes that face today’s healthcare providers.
This
is an area where something like MTBC’s fully integrated Meaningful Use Stage
2-certified and web-based EHR platform ChartsPro really shines. ChartsPro gives
a practice everything required to easily execute a Meaningful Use Stage 2
implementation, including the necessary training, and the company even provides
an MU expert to each of its clients as part of its regulatory compliance
services package. Ranked among the best of the best by Utah-based health
informatics research outfit and industry benchmark KLAS, and certified by the
ONC (Office of the National Coordinator for Health Information Technology),
ChartsPro can handle all the critical functions of a medical practice and is
just the kind of highly intuitive, yet powerful framework that the clinical
solutions segment of the healthcare IT market now demands. Notably, this
segment has a projected 19.8 percent CAGR through 2020.
Whether
it’s chart creation backed up by the company’s digital transcription
technology, ChartScribe (a digital audio dictation to complete charts solution
which is fully integrated into the ChartsPro architecture), or a host of other
mission critical tasks, the web native ChartsPro platform is ideal for an
increasingly work-anywhere digital environment full of tablets, smartphones,
and other mobile devices. Correct and timely patient charts are essential at
every practice and ChartsPro handles this key task beautifully, while
delivering similarly excellent results when it comes to things like document
management, claim creation, e-prescription, lab test ordering, PHR handling and
scheduling.
The
consistently emerging PM (precision medicine) model of healthcare, which is
reinforced by a similarly emergent technical foundation and the need for
tailored medicine in areas like cancer, will continue to be a substantial
driver both for the HIT space, and for MTBC itself. This single market alone
will likely grow to nearly $88 billion by 2023 according to a report by Global
Market Insights (http://nnw.fm/Rb3vb), with factors such as genome sequencing
($8 billion last year), and new drug discovery playing major roles. The White
House has dedicated $55 million toward a new PM initiative, the industry has
responded, and now it will be up to operators in the healthcare IT sector to
pick up the ball and run with it. The explosion of diagnostics alone could send
a multiple-threat WebEHR outfit like MTBC into the stratosphere. It should be
interesting to see how things shake out for this aggressive young cloud-savvy
player.
For
more information, visit www.MTBC.com
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
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