Medical software companies are involved in building and delivering products, systems, services, or solutions within a medical space. These companies solve a myriad of customer needs.
- Companies in the medical software space provide a number of solutions for related companies, including networking and record-keeping solutions, as well as software for medical research.
- Investors looking for exposure to the industry can get it through publicly-traded companies, such as Cerner or Allscripts.
- However, care should be taken as many companies have other businesses and operations, some in diverse, unrelated sectors.
These are software and services for use by any size organization from an individual doctor’s clinic to large hospitals or even government organizations keeping a nation's biometrics.
Medical Practice Management
Used to enhance and streamline the medical practice process from booking an appointment to printing prescriptions to billing and payment, these applications can be used at individual doctor's offices and large hospitals.
These software applications are used for multiple purposes, such as connecting various medical entities (e.g., patients to hospitals or drug companies to medical representatives, pharmacies, labs, etc.)
Medical Services Through Web Portals
These portals range from a simple business listing on a website for a clinic to appointment booking to promotional and advertising solutions. These ready-made products can be purchased as a customized theme for a new website or can be a recurring service to provide promotion, advertising, and appointment booking.
These are software and services that support various operations in the running and management of large hospitals. An individual doctor’s clinic may find medical record-keeping software sufficient, but a large hospital will additionally need other modules to maintain schedules of multiple doctors, inventory management of various devices in the hospital, its billing and payment system, as well as modules to be used by hospital security staff.
Software to Operate a Medical Instrument
An electrocardiogram instrument may be built by company A, but the software that facilitates its working may be built by company B.
Software for Medical Research
This stream focuses on providing software, applications, and systems to medical research companies, aimed at facilitating and automating their research work.
Top Publicly Traded Medical Software Companies
NYSE-listed McKesson, through its technology solutions segment, provides “software, services, and consulting to hospitals, physician offices, imaging centers, home health care agencies, and payers” and offers connectivity services to streamline communication between patients, providers, payers, pharmacies, and financial institutions. It has a market cap of $28.4 billion and its institutional holdings are 86%.
NASDAQ-listed Cerner Corp has a market cap of $22.8 billion. It is a reputable provider of healthcare IT solutions, services, devices, and hardware. Additionally, it provides solutions for health care process optimizations.
Allscripts Healthcare Solutions
Allscripts is listed on the NASDAQ and has a market cap of $1.4 billion. Allscripts provides clinical, financial, connectivity, and information solutions and related services to hospitals, physicians, and post-acute organizations.
Computer Programs & Systems
NASDAQ-listed CPSI has a market cap of $660 million and 87% institutional ownership. CPSI's target market is mid-size hospitals, for which it develops, designs, and supports healthcare systems. It also offers the automation and management of clinical and financial information for hospitals and medical enterprises.
Top Privately-Held Medical Software Companies
- Athenahealth is a former public company. It offers Internet and cloud-based services for billing, business, and clinic-related practice management solutions.
- Epic Systems Corp. operates in the health care management software arena, offering solutions for integration across various medical entities.
- eClinicalWorks provides medical software to assist in administrative tasks such as record keeping and serves small- and medium-sized health care establishments.
- Greenway Health LLC provides administrative and clinical solutions for the health care sector.
- Practice Fusion, Inc. claims to be the largest cloud-based electronic health record company in the US, providing solutions to connect patients, doctors, and data.
The Bottom Line
Investors looking for short-term trading or long-term investments can buy shares of public medical software companies. Care should be taken to clearly understand the business and operations of a particular company, as many firms have other businesses and operations, some in diverse, unrelated sectors. As of now, there are no dedicated medical software sector funds, but there are funds to explore in the larger medical sector or software sector, as well as exchange-traded funds (ETFs).