Naples, Fla.-based hospital chain Health Management Associates has projected that its first-quarter admissions and revenue will be down due to higher rates of uninsured care and an increase in observation stays.
Health Management, the third-largest for-profit hospital company with 71 hospitals, estimated net revenue in the first quarter of fiscal year 2013 would total roughly $1.48 billion, which would be a $1 million drop from the first quarter of FY 2012. Conversely, in FY 2012, Health Management's revenue jumped 18.4 percent.
The gloomy earnings predictions stem from a decline in admissions. Health Management executives expect adjusted admissions will dip 5.7 percent, while total admissions will fall 8.8 percent. Observation stays, which pay less, are expected to increase 14.1 percent.
Most of Health Management's business is derived in Florida, which has a high proportion of Medicare patients. Health Management CEO Gary Newsome said in a news release that the preliminary results for the first quarter reflect the current challenges surrounding inpatient hospital care.
"In the past, we have prepared our Florida hospitals for the first quarter of the year, our seasonally busiest quarter, by adding additional staffing," Mr. Newsome said. "However, in this year's first quarter, our historical volume levels did not materialize as increases in observation stays impacted our results."
Health Management's stock plummeted 12 percent to $11.09 per share after the news was released yesterday. The company expects to release full, audited earnings for its first quarter within the next several weeks.
Health Management, the third-largest for-profit hospital company with 71 hospitals, estimated net revenue in the first quarter of fiscal year 2013 would total roughly $1.48 billion, which would be a $1 million drop from the first quarter of FY 2012. Conversely, in FY 2012, Health Management's revenue jumped 18.4 percent.
The gloomy earnings predictions stem from a decline in admissions. Health Management executives expect adjusted admissions will dip 5.7 percent, while total admissions will fall 8.8 percent. Observation stays, which pay less, are expected to increase 14.1 percent.
Most of Health Management's business is derived in Florida, which has a high proportion of Medicare patients. Health Management CEO Gary Newsome said in a news release that the preliminary results for the first quarter reflect the current challenges surrounding inpatient hospital care.
"In the past, we have prepared our Florida hospitals for the first quarter of the year, our seasonally busiest quarter, by adding additional staffing," Mr. Newsome said. "However, in this year's first quarter, our historical volume levels did not materialize as increases in observation stays impacted our results."
Health Management's stock plummeted 12 percent to $11.09 per share after the news was released yesterday. The company expects to release full, audited earnings for its first quarter within the next several weeks.
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