Leading operator of general acute care hospitals,
Health Management Associates
) recently reported that 41 of its facilities have been selected by
The Joint Commission as leading performers on critical quality
parameters in its latest report on safety and quality of care.
The 41 Health Management facilities (out of 64 Health Management
facilities that were considered) were a part of the 620 hospitals
selected by The Joint Commission. These institutions constitute the
upper 18% of over 3,400 recognized entities providing data for
Of the 35 Health Management entities which made it to the Top
Performers list for 2011, as many as 27 were also on this year's
listing. Three Health Management facilities which made it to this
year's Top Performers list were also on the list in 2011, prior to
their becoming a part of the company.
Other than The Joint Commission, Health Management has recently
also received accolades from U.S. News & World Report and
Health Management expects same hospital admissions to decline in
the range of 1% to 3% for 2012 whereas, the same hospital adjusted
admissions growth is expected to be in the range of -1% to 1%.
For 2012, Health Management maintains its forecast for earnings
in the band of 80 cents and 90 cents per share. The forecast
excludes about $98 million (or 25 cents per share) of effect from
mark-to-market orientation and interest rate swap as well as
Medicare and Medicaid HCIT incentive payments in the range of $90
million to $120 million.
Health Management is engaged in the ownership and operation of
general acute care hospitals in non-urban communities across the
U.S. The company is an active acquirer of underperforming hospitals
with a turnaround potential in high-growth markets. Health
Management's competitors, in niche markets include
Community Health Systems
Health Management benefits from a gradual growth in admissions
largely due to improvement in Emergency Room, sustained physician
recruitment and service development. Moreover, it is well placed to
expand margins from continuing operations and drive above-industry
average earnings growth. While the debt burden remains sizeable, we
are somewhat comforted that bad debt is no longer an area of urgent
Health Management, directly or via subsidiaries, operates 10,500
licensed beds in 70 hospitals in rural or semi-urban locations in
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We currently have a Neutral recommendation on Health Management.
The stock currently retains a Zacks #2 Rank, which translates into
a short-term "Buy" rating.