Lockheed Martin to Expand Health Care Expertise

by: Matthew Potter
August 23, 2011

Category: Editorial | RSS 2.0

Following the recent announcement by General Dynamics (GD) that they will acquire privately held Vangent which provides health care IT services, Lockheed Martin (LMT) also increased its investment in health care offerings by agreeing to acquire QTC Holdings. QTC Holdings is a major source of medical evaluation services to the Department of Veterans Affairs.

Terms of the deal were not announced and Lockheed also stated that the addition of this company would not have a material affect on its revenues or earnings.

While there has been a great deal of interest by defense contractors expanding their opportunity to participate in the expected growing market for Electronic Health Care Records (EHR) or health care IT in general this is a company that provides a very specific service that is based on the number of veterans processed each year. The VA has outsourced much of this work to a variety of companies and with the fighting in Iraq and Afghanistan the number of persons requiring such evaluations has grown each year of the past decade.

When a military member leaves the service they receive an evaluation from the Department of Defense and the VA in order to determine any disability or care that may be needed when they are finished with their service. The disability evaluation is very important as it may lead to financial compensation beyond any retirement that the member has earned. The evaluation will also allow the member to get the necessary care for any injury, illness or issue caused by their service. HTC is one of several companies that performs these evaluations for the VA.

Lockheed by buying this company has found another channel for revenue and earnings that has growth potential rather then the more traditional defense contracting which is facing a potential for major cut backs. Expect to see more types of this kind of deal as the larger contractors position themselves for what could be a restructuring of the U.S.’s defense spending.

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