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Athenahealth Is a Big Winner Thanks to Obamacare

NEW YORK (TheStreet) -- One of the bigger winners in the health care market shift created by the Affordable Care Act, aka Obamacare, is Athenahealth (ATHN - Get Report), a company created a decade ago to help doctors get paid but which has used the $19.2 billion of HITECH stimulus  in the 2009 American Recovery and Reinvestment Act to move into the area of Electronic Health Records.

According to research from SK&A, Athenahealth presently has about 2.8% of the electronic health record market, but anywhere from 28% to 48% of each state's market remains unclaimed, even as incentives from the HITECH Act start to expire. There remains substantial growth to be had in the market.

Once the incentives expire starting next year, clinics and hospitals could be fined for having failed to purchase and implement electronic health records. The current market leaders, with about 10% of the market each, are privately held EPIC Systems and eClinicalWorks.

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Shares of Athenahealth, co-founded by Jonathan Bush, a cousin of former president George W. Bush, and Todd Park, currently the country's Chief Technology Officer, have nearly tripled in value over the last five years and currently trade around $130. 

Cloud-based solutions such as Athenahealth, also called Software as a Service, can be upgraded centrally and implemented more quickly than other solutions.

Athenahealth's ability to compete against General Electric (GE) and hospital-specialty companies like Cerner (CERN) in this market has to do with improving its connections to hospitals and hospital chains, which prefer to do business with suppliers they know.

to that end, Athenahealth's first report on market changes dealt by Obamacare, the Hospital ACA Monitoring Project (HAMP) created in conjunction with the Robert Wood Johnson Foundation, is part of an effort to gain more credibility among these decision makers. The report shows there has been little change in hospital utilization since implementation of the Affordable Care Act exchanges, but states that accepted Medicaid funding are seeing fewer self-paying patients -- which often wind up being bad debts -- than those that did not.

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