Zacks_Analysts' Blog : Cerner & MedAssets Join Forces - Analyst Blog

Healthcare information technology (HCIT) solutions provider Cerner Corp (CERN) has entered into a reseller pact with Georgia-based hospital software company MedAssets Inc (MDAS).



The deal expands Cerner’s revenue cycle management (RCM) offerings (which automates and manages claims processing and billing-related operations), providing it with the rights to market MedAssets' comprehensive suite of web-based revenue cycle solutions. This will enable Cerner customers to leverage these solutions to contain cost, boost cash flow and improve margins.



MedAssets offers RCM solutions and supply chain management services to hospitals and healthcare providers. The entity caters to more than 125 health systems, 3,300 hospitals and 40,000 non-acute healthcare providers.



Missouri-based Cerner is a leader in HCIT solutions, serving hospitals and healthcare providers primarily in the U.S. These solutions, which can be implemented as standalone, combined, or enterprise-wide systems, are created to provide clinical, financial and information management tools for the healthcare marketplace.



Optimism about the growth prospects of HCIT service providers has improved under the Obama Administration, which passed the Stimulus package in May 2009, aimed at increasing the use of electronic health record (EHR) systems by medical practitioners. The “meaningful use” rule, which enables hospitals to qualify for federal incentive program, is expected boost business opportunities for Cerner in the long-run.



Cerner announced better-than-expected second-quarter fiscal 2010 results with profit soaring 27% year-over-year driven by higher revenues (up 13%) and healthy booking growth (up 19%). New client additions and the federal stimulus package drove bookings in the quarter.



Moreover, Cerner had a good quarter with its RCM business with seven client sites going live with the company’s patient accounting solution while ten additional customers buying its revenue cycle solutions. The company also signed up the first client for its RevWorks RCM solution, which represents an attractive emerging growth prospect. The MedAssets deal offers a significant opportunity for Cerner to reinforce its position as a premier provider of RCM solutions.