Big Blue Struts Its Stimulus Stuff

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Everyone is grabbing their fair share of the stimulus bill, and IBM (NYSE: IBM  ) is queuing up for the grabfest as well.

Today, the company announced that it had signed up four hospital groups in the U.S. to use its electronic medical records systems. The stimulus bill contained $19 billion in grants and incentives to encourage doctors and hospitals to invest in electronic medical records. Those incentives help lower the true cost of installing medical records for the hospitals and doctors' offices, and ultimately help the companies that sell the systems, like IBM, Allscripts-Misys Healthcare Solutions (Nasdaq: MDRX  ) , and Cerner (Nasdaq: CERN  ) . All told, IBM has set up systems in more than 1,000 hospitals worldwide.

The company also said it was installing a system in Guang Dong Hospital in China. Interestingly, the hospital doles out traditional Chinese medicine (TCM) -- like that sold by American Oriental Bioengineering (NYSE: AOB  ) , China Sky One Medical (Nasdaq: CSKI  ) , and Tongjitang Chinese Medicines -- in addition to Western-style medicine, so the system had to be tweaked to accommodate the two different approaches.

The nice part is that once IBM has the system adjusted for TCM, it'll be easy to install in other Chinese hospitals. In fact, IBM seems to be establishing a foothold in China; last year the company announced a partnership with China's Ministry of Health to set up a system to share electronic medical records across different hospitals in China.

While IBM is clearly a major player in electronic medical records, it's important for investors to keep in mind that the overall benefit for IBM won't be nearly as pronounced as it would be at a smaller company like Quality Systems (Nasdaq: QSII  ) or athenahealth (Nasdaq: ATHN  ) , where electronic medical records are a major part of the revenue stream. Still, investors looking for a little piece of the stimulus pie wrapped up in a blue chip can find it in IBM.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool owns shares of American Oriental Bioengineering, which is a Motley Fool Hidden Gems selection. The Fool has a disclosure policy.

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10/26/2016 11:35 AM
IBM $152.39 Up +1.51 +1.00%
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