How to Profit With Obama’s Healthcare Insurance Plan
It's time to pluck another fruit from Washington's magic government gumball tree.
These days, everybody's talking about the big healthcare plan the Democrats are trying to shove through Congress. Will it have death panels that force Catholic doctors to give abortions to illegal immigrants? Somehow I doubt it.
I did spot one rhetorical gyration in the president's recent speech to Congress regarding intrusions into private life that no one seems to be talking about. Mr. Obama equated federally mandated healthcare insurance plan policies to state-mandated auto insurance policies.
I would like to point out that anybody can opt out of "required" auto insurance simply by choosing shoe leather over car tires. Inconvenient? Perhaps. But it renders that insurance voluntary, unlike Mr. Obama's healthcare insurance plan, which legally requires young, healthy people to fund the medical needs of old, sick people.
Mr. Obama pretty much begged us to stop fibbing and discuss his "real" plan. Is it rude of me to suggest that he might go first?
Whew! Feels good to get that off my chest.
Okay: We may not know what the final healthcare insurance plan will look like. But we do know exactly how one particular piece reads.
A little-known provision of the American Recovery & Reinvestment Act President Obama signed into law back in February appropriated some $37 billion to encourage healthcare organizations to switch over to electronic health records (EHR).
The gist of the Health Information Technology for Economic and Clinical Health (HITECH) Act is that all those paper files that each of your doctors is hoarding – you know, all those indecipherable doctor scrawls and X-rays they charge you for copies of? – well, they are all about you and your body, so they really belong to you in the first place.
So, for reasons of liberty, property rights, health and cost savings, all those records are to be rendered universally readable and easily portable from doctor to doctor.
The downside? In the end, every detail of your latest colonoscopy will probably end up on Google, or worse yet, YouTube.
Regardless, it's the law now, and Washington (read as you, me and our grandchildren) is paying the check to get it done. So we may as well grab a piece of this 37 billion-dollar pie.
Healthcare Solutions Provider Capturing HITECH Billions
I like Allscripts-Misys Healthcare Solutions (MDRX:NASDAQ), a mid-cap medical database vendor looking to capture a big chunk of those HITECH billions.
Headquartered in Chicago, Ill., Allscripts-Misys Healthcare Solutions offers technical software that enables physicians (and other healthcare providers) to safely and securely deliver clinical outcomes on patients throughout the United States. Its business operations are broken down into two primary segments: Clinical Software Solutions and Health Solutions. A rundown on each segment:
- Clinical Software Solutions: This segment offers electronic health record solutions (EHRs) for automating physician activities. It also provides electronic prescribing solutions comprising a Web-based stand-alone solution offered free of charge to any licensed prescriber. It also includes services that help in the reimbursement cycle for healthcare organizations, which is a critical aspect of any medical office.
- Healthcare Solutions: This segment provides technology for hospitals that require emergency department information systems (EDIS). It also serves home health providers, hospices and nursing facilities by offering electronically streamlined processes that speed up the process of patient care management.
Chart-wise, we can see that Allscripts-Misys Healthcare Solutions got crushed back in the beginning of 2007, much like everyone else. Heck, even as late as October 2008, it was still "enjoying" some pretty hideous down weeks when it missed the analysts' earnings estimates – by a penny!
Here's a company that has shown earnings quarter after quarter getting stomped on because the analysts can't get it right. Meanwhile, the idiots on Wall Street were telling us to buy companies that haven't made money in years because they were losing less money than the analysts predicted.
Whatever!
Three Strong Triggers Signaling a Strong Investment
From a trading perspective, I think the company has three powerful upside catalysts working in its favor.
- According to the WaveStrength Options Weekly forecasting system, I expect the shares to move up to the first primary target at $19.83 and the second primary target at $24.48… for a gain of around 30%.
- Second, Allscripts-Misys Healthcare Solutions has a strong political catalyst. While the healthcare reform bill continues to get debated on Capitol Hill, one thing that both the Democrats and the Republicans must agree on is the transformation to electronic medical records. As mentioned above, they don't have a choice. Therefore, Allscripts-Misys Healthcare Solutions is a strong beneficiary of healthcare reform going forward.
- Third, from a positioning standpoint, I like the fact that Allscripts-Misys Healthcare Solutions offers us upside exposure to the technology sector, which has been a strong outperformer in the current market environment. Add it all up, and we have the makings for a very nice opportunity.
Looking at these factors, Allscripts-Misys Healthcare Solutions offers a nice risk-versus-reward scenario. Consider Allscripts-Misys Healthcare Solutions (MDRX:NASDAQ) for your portfolio.
Buying stock in Allscripts-Misys Healthcare Solutions is one way to potentially profit... and a 30% gain is nothing to sneeze at. But if you're interested in making bigger gains faster, you could buy call options on the company. In fact, that's what I recommended to my WaveStrength Options Weekly (WOW) readers. If shares of Allscripts-Misys Healthcare Solutions do move up to the price target at $24.48, these calls could move all the way up to $7.90... good for a 146% gainer.
And triple-digit gains like these aren't unusual. Just in the past few months my WOW readers have had an opportunity to see gains like 691% on Ford... 108% on PowerShares DB Base Metals ETF... and another 200% on USG. Now it's your turn to potentially realize them too. Find out how in this exclusive report.
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