4Q Profit at Health Management Associates Rises 57%
In the fourth quarter of fiscal year 2012, net income at Naples, Fla.-based Health Management Associates rose 56.5 percent to $48.3 million thanks to increased patient revenues and high amounts of electronic health record payments.
Net revenue increased 6.6 percent in the fourth quarter, from $1.39 billion in 2011 to $1.48 billion in 2012, and Health Management also recorded more than $60.3 million in Medicare and Medicaid EHR incentive payments. The positive fourth-quarter earnings were not as grim as the for-profit hospital chain had initially expected in January, but Health Management still posted lower-than-expected earnings on the year.
For the fiscal year ended Dec. 31, 2012, Health Management's profit dropped 8 percent to $164.3 million. The lower profits come despite a 15.5 percent increase in net revenue — from $5.09 billion in FY 2011 to $5.88 billion in FY 2012. However, Health Management experienced much higher operating expenses, including higher labor costs and interest expenses.
Health Management's same-hospital operating statistics were mostly down, which helped explain its "challenging" year, according to a news release. Patient days fell 4.6 percent in FY 2012, while admissions and adjusted admissions dropped 4.8 percent and 0.7 percent, respectively. Two same-hospital statistics increased on the year: surgeries by 2.1 percent and emergency room visits by 4.5 percent.
Currently, Health Management owns and operates 70 hospitals across the United States. The company is currently in the process of completing a joint venture of the 480-bed Bayfront Health System. Health Management will acquire an 80 percent interest, paying roughly $162 million, and if the deal receives all approvals, Health Management will operate 71 hospitals with roughly 11,000 licensed beds.
Health Management also skirted around some controversy last year. In December, a "60 Minutes" report focused on alleged emergency department practices at hospitals owned by Health Management, and a former company executive told "60 Minutes" he believed the for-profit chain intentionally committed Medicare fraud for hospital stays that "did not meet government standards for admission or reimbursement."
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