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MedAssets sees revenue, net income rise


By Jaimy Lee
Posted: July 30, 2014 - 7:45 pm ET
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MedAssets, an Alpharetta, Ga.-based group purchasing organization and healthcare services company, reported small second-quarter increases in revenue and net income despite a decline in net administrative fees for its GPO.

Total revenue rose 2.7% to $175.4 million in the second quarter of 2014, compared to $170.7 million in the same quarter in 2013. That growth was led by the revenue-cycle-management business, which reported a 6.2% increase in revenue to $69.5 million.

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Until Premier filed its IPO last year, MedAssets was the only publicly traded GPO and remains one of the largest GPOs in the U.S. How hospitals purchase medical supplies and drugs has fast become a key area of focus for administrators who are looking to rein in supply chain spending to counter cuts in reimbursement and lower patient volume.

MedAssets said the spend and clinical-resource-management business, which houses its GPO, saw its overall revenue fall 0.6% to $105.9 million. Cash inflow in that sector rose because of an increase in advisory and consulting fees, but that was offset by a 0.6% decline in net administrative fees to $70 million. Those fees are a percentage of the contracts GPOs negotiate with medical-device manufacturers and suppliers on behalf of their hospital members. Company executives told investors that the decline in net administrative fees is expected to be short-term.

Net income rose nearly 30% to $6.6 million.

MedAssets lowered its outlook for the year and said it anticipates up to 3.4% growth in the spend and clinical-resource-management business and up to 4.3% growth in total revenue.

Follow Jaimy Lee on Twitter: @MHjlee


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