ShukriMahadi
Long

BEAT will benefit? Encouraging Near-Term Outlook for Medical Sec

NASDAQ:BEAT   BIOTELEMETRY INC
The Zacks Medical Services industry comprises third-party service providers and caregivers appointed by core healthcare companies for economies of scale. The industry includes pharmacy benefit managers, contract research organizations ( CRO ), mobile and wireless medical technology companies, third-party testing labs, surgical facility providers and healthcare workforce solutions providers among others.

Over the past few years, the healthcare industry has strategically moved from volume to value-based care. This changing pattern of care calls for efficient and better-quality facilities, thus gradually increasing the need to appoint specialized external service providers.

In recent times, biotechnology and pharmaceutical companies have often been seen outsourcing clinical development and data solution services to improve quality of medical care at competitive costs. With growing importance of effective healthcare management, the medical service industry has become an integral part of the modern healthcare mechanism.

Here are the industry’s three major themes:

With a significant reduction in regulatory and tax burden on U.S. healthcare companies, the space is finally making progress in terms of technology adoption. This is creating opportunities for mobile and wireless medical technology companies. This apart, thanks to the specialized skills and advanced techniques of surgical facility providers, treatments are becoming less invasive with shorter recovery times. In the future, concepts like ‘bed less hospitals’ are expected to become popular. Currently, third-party laboratory testing providers and contract research organizations are also experiencing increasing demand, thanks to the growing need for complex tests, services and clinical research.

For the conventional biotechnology and pharmaceutical firms, clinical trials account for the majority of their drug development costs. These firms are right now looking to outsource clinical trials to control escalating costs related to therapeutic complexities, regulatory demands, and timelines. Going by a report published in Contract Pharma, outsourcing to CROs is anticipated to witness 7.4% CAGR through 2019, with a market penetration rate of 72% by 2020. Overall, the global market for clinical trial services is forecast to grow 12% year on year to 2021 (The Business Research Company).

With rising cognizance about the benefits of specialized medical caregiving, the need for healthcare workforce/staffing service providers has increased significantly. For example, the demand for nurses has increased manifold and is expected to remain high. Going by a study published by Georgetown University, the economy will create 1.6 million job openings for nurses through 2020.
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