This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Making Affordable Care Act Patients Profitable

Stocks in this article: MDAS

Lindsey Bell:

Now the other part of your business, which you kind of mentioned before, is the spend and clinical resource management where you group together everybody's orders for supplies and save them money by doing so since they can't talk to each other. How has that evolved and how do you see it evolving in the future?

John Bardis, CEO, MedAssets:

Well you raise a great question. This industry right now is going to remain under substantial cost pressure for the foreseeable future and I think for the foreseeable decade with the baby boomers, the pressure on cost that we see. And making certain that hospitals operate under the most cost efficient environment is going to be a preeminent front page issue for them.

Having said that, each hospital, because of the way costs have been established, operates differently. And that is not going to be a fair way to operate in the future. It's not going to create success. We help those hospitals get to a much narrower bandwidth of operating costs while we continue to drop the down.

The last point is that with the Affordable Care Act and some 20 million people entering the insurance roles, we do believe that the majority of them who come in will have payments coming back to the hospital, which are substantially less than what current Medicare rates are, certainly what current private pay rates are. That being the case, if you've got 20 million people coming into the system who historically then become high utilizers of the system, certainly more than what they are today, but with payments that are substantially below par, as what par is today, we're going to see revenue per unit go way down, we're going to see unit utilization go way up. And the only way to address that in an effective way or survivable way is to reduce cost.

Lindsey Bell:

And that's where you guys come in.

John Bardis, CEO, MedAssets:

Yes.

Lindsey Bell:

Now looking at the stock price of MedAssets, it has had a nice run this year. It's trading though at a relatively cheap valuation. Do you think analysts are putting too much of a weight on the slower growing supply side of the business?

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,634.55 -38.05 -0.22%
S&P 500 2,046.11 -5.71 -0.28%
NASDAQ 4,747.3460 -10.5330 -0.22%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs