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Making Affordable Care Act Patients Profitable

Stocks in this article: MDAS

NEW YORK ( TheStreet) - Lindsey Bell: John, the healthcare environment has been tough especially with reimbursement rules that are ever-changing and cost pressures. What are you seeing right now as it relates to those issues, and who is being impacted the most?

John Bardis, CEO, MedAssets:

Well Lindsey, I think we're seeing the beginning of what will be the largest shift of risk in the history of this industry. The federal government now is putting more risk onto U.S. hospitals -- Starting this month readmissions for 3 particular categories of disease: heart failure, pneumonia, and congestive heart failure. Going forward, for any patients who come back to a hospital after having been treated for any one of those disease states under Medicare coverage, the hospital will now not be reimbursed, where historically they have been, and there will be penalties involved.

Lindsey Bell:

And the hospitals already have very small margins as it is. So how is your company helping hospitals and other facilities manage their profitability?

John Bardis, CEO, MedAssets:

We are the predominant cost and clinical management firm for U.S. hospitals, so we do that in a number of different ways. One is that we amalgamate and aggregate procurement for anything and everything that a hospital can buy, and we manage those prices through contracts with major healthcare vendors throughout the world.

We then also measure and manage how product and process is managed within the institutions to deliver case outcomes. And because there are 5,000 different hospitals who can't talk to each other, due to antitrust rules regarding cost and outcome, we take that intellectual property and we share that and spread that across the country in ways that create meaningful cost reductions and meaningful improvements in clinical process.

Lindsey Bell:

One way you also work with hospitals is through your revenue cycle management segment, which is basically your IT business, to dumb it down. That's been growing at a very nice pace. What's driving that? Is it just this move to electronic health records?

John Bardis, CEO, MedAssets:

Well you ask a great question. In fact the answer to that is similar to what we began with, which is the reimbursement and payment environment is changing and has been changing dramatically for some period of time. So as payment is in a state of flux, so is the business process to get the payment right. We assist hospitals using our IT and software solutions to get that payment correct, right? In a way that makes it compliant with what rules of that payer contract are and which at the same time makes it efficient to collect that income.

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