JP Morgan Initates Coverage of Three RCM Providers (AH, ATHN, MDAS)

JP Morgan analysts Atif Rahim, Lisa Gill, and Michael Minchak have initiated coverage on three revenue cycle management (RCM) providers. The existence of this industry is driven by healthcare providers who have complex revenue cycle processes. RCM providers exist because they reduce collection costs and improve revenue yield for healthcare providers.

Accretive Health (NYSE: AH)
Overweight, $27 PT
"Accretive is a hospital-focused provider of fully outsourced end-to-end RCM solutions. The company’s offering is unique in the healthcare IT arena as it requires no incremental up-front cost or investment beyond a hospital’s current revenue cycle spend."
AH is currently trading at $13.35.

athenahealth (NASDAQ: ATHN)
Neutral, $34 PT
"athenahealth is a physician-focused provider of RCM services and has established itself as a leader in that market, but the number of new physicians added to its network has slowed recently, which is a concern."
ATHN is currently trading at $25.04.

MedAssets (NASDAQ: MDAS)
Neutral, $32 PT.
"MedAssets is a well-positioned competitor in the
hospital RCM arena, with a vast hospital customer base and competitive product offering, but we believe the recent run in the shares caps the near-term upside."
MDAS is currently trading at $23.41.