If the folks behind CardioNet had been hooked to its own devices recently, said devices might well have seen some big spikes in heart rates as news arrived that UnitedHealthcare Insurance would provide coverage for CardioNet's line of heart monitoring systems starting July 1. The heart rate spikes wouldn't have stopped there, though, as CardioNet stock also got a spike of its own, sending share prices up a reported 31 percent in extended trading.
The reports indicate that CardioNet's agreement with UnitedHealthcare is set to last for three years, and would apply to all of UnitedHealthcare's affiliate insurance plans, including both Medicare and Medicaid plans. Since fully 37 percent of CardioNet's patient services revenue could be traced back to Medicare in 2012, that's a very big point in CardioNet's favor. Plus, UnitedHealthcare has a pool of 70 million members across the United States—according to statements from CardioNet—so the possibility of further sales increases is clearly front and center. The company already works with 400 different commercial payers covering over 200 million patients, but having the opportunity to bring another 70 million into the pool is no mean feat.
The centerpiece of the CardioNet lineup is its Mobile Cardiac Outpatient Telemetry system, a system specifically geared toward watching for heart rhythm disorders known as arrhythmia, a major problem for heart patients and the kind of thing that should be found quickly to prevent larger problems later. An arrhythmia can be almost imperceptible, mildly uncomfortable, or fatal, so finding one can be a lifesaver.
Given the prevalence of heart disease in the United States—and beyond—offering a way to help combat this disease is the kind of thing that's likely to save some lives if the users can get access to same. But as is so often the case with medical developments, expense can be a problem, and cutting off access to life-saving technology on the strength of limited funds just doesn't sit well with many people.
Yet what can be done? This life-saving technology can cost millions to develop, and those millions need to come from somewhere. This is where insurance can come in handy, allowing the costs of such developments to be spread out over a wider pool of potential users, but it only goes so far. With CardioNet able to access around a third more users than it could previously, that gives CardioNet a lot of extra potential to realize revenue, transfer said revenue back into research, and develop even better products from there. CardioNet stock has also been seeing the benefits of this, nearly doubling since a recent “buy” recommendation from SmarTrend.
Still, it's good to see that at least one big life-saving development will be made available to users soon, and chances are, the CardioNet Mobile Cardiac Outpatient Telemetry system will save a life or two with UnitedHealthcare insurance.
Edited by
Alisen Downey
