Implementing all of the facets of the Affordable Care Act, commonly referred to as Obamacare, has come with an unfortunate side effect: So much time and money has been spent on adapting processes like ICD-10 (a mandated set of codes that enables healthcare data to be more freely exchanged among providers) that there has been little time or money to address other needs.

#-ad_banner-#The good news: The heavy lifting to meet the mandates is now mostly done, and the healthcare industry is again focusing its IT resources on a burgeoning new trend: Digital technology. As analysts at Leerink Partners note, “the same digital revolution that re-ordered the media sector has now arrived at the healthcare sector, creating winners and losers.”

Frankly, the entire healthcare profession seems to be just exiting the dark ages. Let’s quote from the Leerink analysts again: “While U.S. businesses were pioneering world-class productivity, collaboration and automation systems in offices and factories, healthcare’s payers and providers seemed stuck in a darkly-humorous parallel universe of old and kludgey technology, including telephone answering services, color-coded manila folders, large film negatives, paper clips, monochrome computer screens, multiple computer key-function codes from 1980s DOS manuals, handwritten phone messages on pink sheets of paper and deliveries of critical workflow documents through the postal system.”

The old way of doing things is becoming passé and quite suddenly every aspect of healthcare is being addressed as analog pen-and-paper systems get a digital makeover. They include:

— Practice Management software from vendors including Cerner Corp., AllScripts Healthcare Solutions, Inc., AthenaHealth, Inc. and Merge Healthcare, Inc.

— Medical office software platforms. Doctors can now use niche vendors for staff training (Healthstream, Inc.), secure communications (Imprivata, Inc.), clinical trial participation (Medidata Solutions, Inc.)

— Medical devices that provide real-time remote monitoring of key vital signs. Companies, such as Insulet Corp., DexCom, Inc. and Tandem Diabetes Care, Inc., focus on insulin and glucose control, while BioTelemetry, Inc. and LifeWatch focus on cardiac monitoring.

— Practice improvement software from firms such as MedAssets, Inc. and HMS Holdings Corp.

— Consumer knowledge — a series of companies such as WebMD Health Corp. and Everyday Health, Inc. are providing a forum for patients and their doctors.

— Web-based health insurance. Companies such as eHealth, Inc., Health Insurance Innovations, Inc., HealthEquity, Inc. and others are helping employers and employees navigate the multiple policy choices, acting as both insurance broker and advisor.

Almost all of these companies are experiencing solid growth (source: ThomsonReuters).

In fact, adding up the annual revenue figures for all of these companies shows that growth is rising, from 10% in 2013 to a projected 16% next year.

Yet here’s the curious disconnect. The S&P healthcare index has risen more than 20% over the past 12 months, the Nasdaq biotechnology index is up more than 30%, yet this basket of stocks, as calculated by Leerink Partners, is up just 1%. Part of the underperformance may be attributed to the fact that many of these firms are still unprofitable or only marginally profitable. They are still investing heavily in their platforms and, as a group, are not expected to show robust profit growth until 2015 and 2016, as sales leverage kicks in.

Paradoxically, these companies are seeing revenue gains by helping the healthcare industry reduce expenses. A range of incentives are now in place to produce superior outcomes with fewer resources, and doctors and hospitals are finally, reluctantly getting with the program. One example is Castlight Health, Inc. (Nasdaq: CSLT), which provides employers and consumers with the tools to optimize health care decisions. It’s a clear need, but a tricky choice for investors, as Castlight still has to figure out a way to earn a profit.

To be sure, many of the companies noted above are broadening their product offerings and the distinctions between them are beginning to blur. I prefer companies that have a clear moat around them, or at least a large and defensible revenue base. And it helps to focus on stocks that aren’t already in possession of lush valuations. I’m a fan of two different companies in this group, each of which has a compelling role to play in the digitally-connected healthcare world.

WebMD Health Corp. (Nasdaq: WBMD) plays a vital role in the medical education of consumers and is a leading platform for drug and medical device makers to reach the consumer audience.

When I looked at this company a few years ago, it was slumping due to a pullback in drug company ad spending. Yet such spending is on the rise, as is the interest in online research of healthcare topics. According to Compete.com, WebMD controls a majority — roughly 23% — of this audience (with the National Institute of Health (NIH) coming in second at 14%).

Look for more consumers to aggressively research their health issues, now that many healthcare plans come with much higher deductibles than in the past. WebMD’s MedScape platform is also a key research tool for doctors and other healthcare professionals, as it is more than four times the size of its nearest rival, UpToDate.com.

Merge Healthcare, Inc. (Nasdaq: MRGE) is a niche healthcare provider that I have discussed several times before. The company’s software helps process digital x-rays and other healthcare images.

For quite some time, the company has been hampered by the still-slow adoption of digital healthcare, and shares languished below $2.50. Yet Merge just announced solid Q3 results that give a sense that a clear inflection point is at hand. (I encourage you to read the earnings transcript to get a better sense of Merge’s momentum.)

Risks To Consider: Will the Affordable Care Act be dismantled by the incoming Congress? It’s more than likely that only the tax on medical devices, which funds much of the act, will be a clear target of the GOP. Although legal challenges to the sweeping health care reform could blunt the momentum of many of these companies.

Action To Take –> This whole group appears to be on the cusp of rising adoption of their software and services. I will be focusing heavily on this group in coming weeks and hope to share more investment ideas as they evolve. For now, WebMD and Merge are two picks that hold current appeal.

This new breed of medical technology will revolutionize the industry over time. That same idea of looking for disruptive companies to invest in has led our analyst Andy Obermueller to gains of 89%, 92% and even 310% in a year. StreetAuthority compiled a list of the hottest upcoming trends called “The Hottest Investment Opportunities For 2015.” For more information on the game-changing opportunities that could crush the market, click here.