MedAssets, the Alpharetta, Ga.-based group purchasing organization and technology services provider, said it still expects revenue to grow in 2014 although it was down slightly in the year's first three months.
Net revenue was $170.9 million in the first quarter of 2014, down 1% compared with the same quarter last year. Net income was flat at $7.7 million.
John Bardis, chairman, president and CEO of MedAssets, said the company expects revenue to pick up in the second half of the year to hit its forecast of 3% over 2013.
However, the company also disclosed that it will lose $28 million next year because seven-hospital Barnabas Health plans to bring its billing and collections business in-house at the end of 2014. The West Orange, N.J.-based health system will continue using MedAssets for supply chain and other revenue-cycle services
MedAssets is one of a handful of companies that purchase medical supplies, drugs and other supply-chain services for hospitals. Until Premier went public last year, MedAssets was the only publicly traded GPO. Hospitals are increasingly cost-conscious about what they spend on the products and services they purchase and many are boosting their spending with GPOs while others are evaluating strategies to handle contracting internally.
Tenet Healthcare Corp., a major MedAssets client, purchases 92% of its products on contracts, MedAssets executives shared during a call with investors. That committed model of purchasing is also becoming more prevalent because it can mean lower prices for hospitals.
MedAssets' revenue from revenue-cycle management decreased 1.7% to $2.3 million, while net revenue for the business unit that houses its GPO fell about 1% to $108.6 million.
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