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Here’s why the Pro Medicus (ASX:PME) share price is storming 5% higher

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The Pro Medicus Limited (ASX: PME) share price has been a strong performer on Thursday.

In morning trade the leading health imaging company’s shares are up 5% to $32.75.

Why is the Pro Medicus share price racing higher?

Investors have been buying the company’s shares this morning following the release of an announcement.

According to the release, Pro Medicus has signed a five-year contract with MedStar Health worth a total of A$18 million.

MedStar Health is the largest health system in the Maryland and Washington, D.C. metropolitan region, comprising 10 hospitals.

The contract is based on a transactional licensing model and will see Pro Medicus’ complete enterprise imaging solution implemented across all of MedStar’s radiology and subspecialty imaging departments. This includes the MedStar Georgetown University Hospital.

Management believes this implementation is notable as it will provide MedStar with a fully cloud deployed environment on the Google Cloud Platform (GCP), leveraging its Visage platform’s native, cloud-engineered enterprise imaging technology.

Planning for the rollout is to commence in the second quarter of FY 2021, with the first sites scheduled to go-live in the third quarter.

A shift in thinking.

Pro Medicus CEO, Dr Sam Hupert, appeared to be very pleased with the agreement and what it could signify for the future.

He commented: “MedStar went through an extensive evaluation process including a pilot that not only benchmarked Visage 7 compared to on-premise systems from other vendors, it served to verify the speed of Visage 7 in the public-cloud.”

“Unlike systems from other vendors, Visage has been developed from the ground up for cloud deployment. Traditionally, our clients have deployed Visage in their own “private-cloud” where all images are sent to a single, central server and streamed on demand from there. This deal signifies a shift in the way U.S. healthcare providers are now starting to think about public-cloud platforms,” he added.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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