Viewpoint: Despite concerns around ACA repeal, medical software leads stock market

Medical software companies are leading the stock market, even though their primary investors and customers — hospitals — remain uncertain about the future of Medicaid, according to economic policy writer Jed Graham in Investor's Business Daily.

Eighteen stocks comprising the Computer Software-Medical group posted a collective gain of 33 percent through Thursday. Investors have remained interested in the segment due to two key healthcare trends: "the rising dependence on technology and analytics to deliver better, more cost-efficient care and the shift from legacy systems to the cloud," Mr. Graham writes.

Despite this growth, some companies have expressed concerns over the drawn-out Republican effort to repeal the ACA, which they say has hindered their abilities to win new technology contracts, Mr. Graham writes. Some customers have been hesitant to invest in health IT tools, leading companies to utilize new strategies to win contracts. For example, athenahealth guaranteed customers would see at least $1.20 in cost reductions for each $1 paid to the company.

Although better care and cost savings are the primary drivers of development and investment in medical software like EHRs, a shift to cloud-based systems is following, Mr. Graham writes. Cloud-based companies like Veeva and Medidata have "strong market outlooks," with both companies' stocks up around 50 percent since Dec. 30.

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