Franklin, Tenn.-based Community Health Systems has released audited financial statements of Health Management Associates for fiscal year 2013, and they show the Naples, Fla.-based chain was deep in the red as CHS was acquiring it.
According to filings with the Securities and Exchange Commission, HMA lost $328.5 million in 2013 — compared with a net profit of $149.9 million in 2012 and $173.3 million in 2011. HMA's operating losses alone were $371.3 million, but income tax benefits helped stave off further losses.
The company's revenue dropped 5 percent to $5.54 billion in 2013, despite the fact that half of its payer mix was private insurance. Medicare accounted for 27 percent of HMA's revenue, while Medicaid and self-pay represented 10 percent and 11.3 percent, respectively. Throughout 2013, HMA also battled high expenses and legal costs: Total year-end expenses rose 6.4 percent to $5.9 billion.
The audited statements did not include HMA's operating statistics and volumes. However, HMA posted sizable losses due to declines in admissions through the first three quarters of 2013. In the third quarter, HMA lost $96.6 million as same-hospital admissions plunged 6.8 percent. Through the first nine months of 2013, HMA posted a $72.8 million net loss as admissions dropped 7.5 percent, while surgeries fell 3.2 percent.
CHS completed its acquisition of HMA this past January. The $7.6 billion deal included $3.9 billion in cash and the assumption of $3.7 billion of debt. Last year for HMA was rife with executive firings and high-stakes conflicts with its largest shareholder, New York City-based hedge fund Glenview Capital Management.
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