Emdeon Shares Surge on Debut

NASHVILLE, Tenn. (TheStreet) -- Healthcare IT specialist Emdeon (EM) burst out of the gate on its first day of trading as a public company Wednesday, with shares quickly surging past their $15.50 offering price.

With the debate about U.S. health care reform intensifying, the company's shares opened at $17.75, and were soon trading at $17.85. The stock dipped, however, to around $17.57 by mid-morning.

Emdeon priced its shares at the top end of its anticipated range of $13.50 to $15.50 after the market's close Tuesday, underlining the growing interest in healthcare technology. The electronic billing giant also increased the number of shares offered by about 10% to 23.7 million.

The interest in Emdeon's shares was not a complete surprise. The company's offering has already generated plenty of buzz, even in a somewhat cautious IPO market.

Emdeon handled half of all the electronic health care transactions in the U.S. last year. It is seen as well-positioned to exploit President Obama's ambitious health care agenda.

The Obama administration, for example, plans to spend $10 billion over five years to implement electronic medical records, and has promised to streamline the byzantine U.S. health care system.

Even as the debate about Obama's broader strategy intensifies, fueled by recent comments from former Alaska governor Sarah Palin, there seems little doubt that technology will play a much larger role in how Americans access medical services.

Set against this backdrop, Emdeon is an attractive proposition, according to Scott Sweet, principal researcher at analyst firm IPO Boutique.