The Healthcare Services sector can be subdivided into these sub-groups:

1. Software: IDX Systems Corp., Cerner Corp., Eclipsys Corp., McKesson Corp.
2. Distribution: AmerisourceBergen Inc., Cardinal Health Inc., Fisher Scientific, Henry Schien Inc., McKesson Corp., Owens and Minor Inc., Priority Healthcare Inc.
3. Pharmacy Benefits Managers (PBM-s): Caremark RX Inc., Medco Health Systems Inc., and Express Scripts (large drug chains like Walgreen’s, CVS are excluded in this discussion).
4. Outsourcing: Charles River Labs Inc., Covance Inc., ICON Plc, MDS Inc. (Toronto), Parexel International Corp.
5. Connectivity: Dendrite Intl. Inc., IMS Health Inc., NDC Health Inc., WebMD Corp.

The Medicare Modernization Act (MMA) was passed in 2004, and is scheduled for implementation in 2006. MMA is now being looked upon as a growth driver – a dramatic change from the way in which anything associated with Medicare was perceived in the past.

Healthcare Technology – Software

The focus of these companies is on quality of care, patient safety and lower operating costs through the implementation of Clinical Information Systems (CIS), Computerized Physician Order Entry (CPOE), and Picture Archiving and Communication Systems (PACS). Much of the effect of spending driven by HIPAA-mandated bar-coded medical management systems and CPOE is currently in progress and will slow down considerably in the next year. PACS is enjoying a good run currently and will continue for the next three years – driven by enthusiasm from physicians who like the accuracy and speed that is offered by a PACS.

Capital is hard to come by at the point of service (POS), and Information Systems command only one to two percent of the entire budget at most hospitals and providers.