Healthcare performance improvement solutions provider MedAssets Inc (MDAS) recently announced that it will continue to provide service to UNC Health Care, a not-for profit integrated healthcare system based in Chapel Hill, NC.
Per the renewed agreement, UNC will continue to use most of the MedAssets solutions like Strategic Sourcing, Clinical Resource Management and Procure-to-Pay systems. UNC will leverage MedAssets Cost and Operational analytics solution to improve its cost management and simultaneously develop a clinically-aligned supply chain.
Due to rising pressure from the ever-changing healthcare reform policies, establishing a sustainable cost reduction strategy has become vital for healthcare providers. MedAssets’ solutions are helping healthcare providers to offer quality care in a cost-effective way, which in turn, is driving their customer base.
Per MedAssets, there has been a 30% year-over-year increase in the number of providers using its revenue cycle analytics tools, benchmarking data, technology automation and consulting services over the last 12 months.
MedAssets' recent third quarter results also reflected this trend. Revenue Cycle Management (RCM) segment revenue increased 10.7% year over year to $70 million. Around 68% of this segment’s revenues can be attributed to SaaS-based Revenue Cycle Technology Tools.
We believe that continuous contract wins are a key growth catalyst for MedAssets. Of late, the company has renewed contracts with a number of healthcare providers like AHMC Healthcare, Alhambra Hospital and Medical Center, LHP Hospital and Centegra Health System.
MedAssets remains focused on improving its RCM technology bookings. The company continues to invest in delivering quality service to clients, which are expected to boost customer base in the long run. Based on these efforts, MedAssets raised its RCM segment revenue guidance to $271 to $273 million, which reflects 5.9% to 6.7% year-over-year growth over 2013.
The company also raised its full year revenue guidance to $715 to $721 million, which is 5.1% to 6% up from $680.4 million reported in 2013. Improved revenue outlook is also expected to boost bottom-line performance. Earnings per share are now forecasted in the range of $1.34 to $1.38, which reflects a 1.5% to 4.5% increase over $1.32 reported in 2013.
However, higher operating expenses and increasing competition from the likes of Allscripts Corp. (MDRX), McKesson Corp. (MCK) as well as consulting and outsourcing firms such as Accenture Ltd. (ACN) serve as potent headwinds.
Currently, MedAssets has a Zacks Rank #2 (Buy).
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