Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



This Sector Will Grow Regardless of the Decision on Obamacare

We are just days away from getting an official ruling from the Supreme Court on whether the Affordable Care Act -- more fondly known as Obamacare -- is constitutionally legal.

The implications are immense as health-care spending currently accounts for $2.7 trillion, or 18%, of the United States' GDP. There's pretty much not a financial news source you can turn to right now that isn't discussing the possible benefits and pitfalls of this landmark legislation. But what hasn't been discussed much is the one often overlooked sector that looks poised to grow regardless of whether Obamacare is approved, rejected, or piecemealed through the Supreme Court.

The sector in question is electronic medical records and its prospects have never looked brighter.

Make EMR your star
When Obamacare was enacted in 2009, one of the provisions placed in the bill was that health-care companies would be required to transition from using paper to digital platforms. Whether or not Obamacare passes will be trivial, as this transition is too far along now to be interrupted. If you really want to play the cloud-computing market, then look no further than the following EMR companies.

The two EMR names that immediately come to my mind are Cerner (Nasdaq: CERN  ) and Quality Systems (Nasdaq: QSII  ) . Cerner is by far the largest company in the sector and has grown sales by nearly 10% over the past five years. Quality Systems has run into recent order delays (possibly due to hospitals holding back on spending until after the decision on Obamacare is made), but is still predicting 20% to 24% sales growth in fiscal 2012.

There's something for everyone
But these two companies are just the tip of the iceberg. Smaller players Merge Healthcare (Nasdaq: MRGE  ) , MedAssets (Nasdaq: MDAS  ) , and athenahealth (Nasdaq: ATHN  ) are also in line to benefit.

Merge Healthcare's iConnect technology allows hospitals and imaging centers to exchange information with one another electronically. Merge recently inked a radiology deal with Lakeland Healthcare and analysts project it will turn its first annual profit since 2004 next year.

MedAssets operates in two segments: spend and clinical resource management, which covers cost management and supply chain analytics for hospitals, and revenue cycle management, which assists with claims processing and revenue recovery. Although it has been liberal with its spending, MedAssets looks cheap considering its forward P/E ratio of 10.5 compared to an estimated growth rate over 13% for the next five years.

Ongoing billing and clinical-related information technology provider athenahealth has already seen huge gains and boasts a robust earnings multiple. athenahealth's first-quarter results marked its 49th consecutive quarter of revenue growth and Wall Street is predicting it will grow by 27% annually over the next five years.

Forecast: Cloudy with plenty of profits
The groundwork has been laid for EMR companies to succeed whether or not Obamacare passes. If you're tired of the back-and-forth of guessing in health care, look no further than these cloud growth stories.

Did I leave out your favorite EMR play or fail to give enough praise to your top pick? Tell me about it in the comments section below and consider adding these stocks to your free and personalized watchlist.

With the U.S. elections also around the corner, our team of analysts at Motley Fool Stock Advisor realizes there's more at stake for stocks than just what we're witnessing in the health-care sector. Find out which stocks could benefit based on which president-elect wins in our latest special report. Get your free copy by clicking here!

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Motley Fool newsletter services have recommended buying shares of Quality Systems and athenahealth. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that never takes a sick day.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1918719, ~/Articles/ArticleHandler.aspx, 5/26/2016 8:48:44 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,828.29 -23.22 -0.13%
S&P 500 2,090.10 -0.44 -0.02%
NASD 4,901.77 6.88 0.14%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/26/2016 4:00 PM
ATHN $124.07 Down -1.45 -1.16%
Athenahealth CAPS Rating: **
CERN $54.98 Down -0.33 -0.60%
Cerner CAPS Rating: ****
MDAS $0.00 Down +0.00 +0.00%
MedAssets CAPS Rating: **
MRGE.DL $0.00 Down +0.00 +0.00%
Merge Healthcare CAPS Rating: **
QSII $12.57 Down -0.22 -1.68%
Quality Systems CAPS Rating: ****