) recently announced the renewal of its multi-year agreement with
Kaiser Permanente, the largest healthcare provider in California.
The agreement entails MedAssets to continue as the exclusive
group purchasing organization for Kaiser Permanente.
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MEDASSETS INC (MDAS): Free Stock Analysis
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The announcement triggered a rise of 3.8% in MedAssets' share
price in the trading session, with the stock closing at $21.11 on
Per the deal, MedAssets will provide Strategic Sourcing and Spend
Analytics solutions to Kaiser Permanente. Both Strategic Sourcing
and Spend Analytics are web-based business intelligence
tools designed to facilitate improved business decisions.
These innovative business solutions primarily cater to the supply
chain management activities within a business. This functional
area is critical for achieving high levels of operational
Strategic Sourcing and Spend Analytics support the cost-reduction
initiatives and improve contract negotiations for a company.
Such innovative and effective business solutions from MedAssets
are fast gaining popularity. This is validated by the company's
renewal of a couple of deals in the recent past. Allina Health, a
not-for-profit health system, has extended its prior agreement
with MedAssets to align hospital and physician reimbursement
strategies more efficiently across its own healthcare domain.
Similarly, MedAssets also got its contract renewed with Advocate
Health Care - a 12-hospital, 3,300-bed health system, as part of
its performance improvement relationship that aimed to improve
operational efficiencies and standards of care at the latter.
Likewise, California-based Marin General Hospital (MGH) also
appointed MedAssets for a comprehensive cost and operational
management improvement program.
The abovementioned contract renewals assure the company of a
steady flow of revenues in the forthcoming quarters. MedAssets
provided its guidance for 2013, expecting revenues to be in the
range of $671-$677 million. The Zacks Consensus Estimate for the
same is pegged at $675 million.
We believe companies like MedAssets are poised to gain in the
long run now that healthcare providers are striving to realize
more financial and operational gains while simultaneously
delivering improved customer service.
Currently, MedAssets carries a Zacks Rank #3 (Hold).
Investors interested in the medical services industry can
consider better-ranked stocks like
Air Methods Corp.
Envision Healthcare Holdings, Inc
Charles River Laboratories International, Inc.
). All these stocks carry a Zacks Rank #2 (Buy).