Cramer's 'Mad Money' Recap: July 1

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"Today we saw leadership from a group that's been hated all year," Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Healthcare stocks, he said, are on the ascent because they stand to benefit from the upcoming Medicare spending bill that will give investors a unique opportunity "to have the wind at their backs."

According to Cramer, the new Medicare spending bill now provides incentives for using electronic prescriptions, as opposed to paper, through 2010, and mandates electronic prescriptions thereafter. The provisions, now in both the House and Senate versions of the bill, will be a windfall for Allscripts(MDRX Quote - Cramer on MDRX - Stock Picks), a company with a lock in the e-prescription business, he said.

Allscripts currently has a client base of 150,000 doctors, nearly one quarter of all the doctors in the U.S., along with 700 hospitals. Yet, Cramer noted only 2% of prescriptions were sent electronically in 2007, leaving a huge market for Allscripts to tap. The company's ERX software provides doctors with a free way to start sending prescriptions electronically with no upfront costs.

Shares of Allscripts have been hit hard in recent months due to bugs in their electronic healthcare platform and what Cramer called overall poor execution. But the management has proclaimed the platform ready for prime time. Cramer said now is the time to invest in the company, especially with electronic prescriptions expected to grow 400% in 2008.

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