Health Management Associates Meets Profit Expectations as Write-Offs Drop

Despite an earlier warning that fourth quarter profits might fall short of analysts’ expectations, hospital owner and operator Health Management Associates said yesterday that it earned 8 cents a share from continuing operations, numbers in line with analysts’ estimates.

For the quarter ended December 31, 2007, HMA reported net revenue increased 4.6 percent to nearly $1.1 million and said its net revenue per adjusted admissions increased 3 percent during the period. For the year, HMA reported net sales of $4.4 million and net income of 48 cents a share from continuing operations.

The Naples, Fla.-based company said its provision for doubtful accounts, or bad debt expense was $135.2 million or 12.3 percent of net revenue for the quarter. That compares to $125.7 million or 11.8 percent of net revenue for the third quarter ended September 30.

In February 2007 HMA began giving a 60 percent discount to uninsured patients for non-elective services. During the fourth quarter, uninsured discounts totaled $149.9 million compared to $153.5 million for the third quarter. Charity and indigent care write-offs for the fourth quarter were $17.7 million, compared to $145.8 million for the year ago period and $19.1 million for the third quarter, the company said.

HMA said uninsured accounts receivable declined approximately $12.8 million during the fourth quarter, compared to September 30, 2007 when it declined $9.0 million.

For 2008, HMA said it expects to earn 40 cents to 50 cents per share from continuing operations on revenue of $4.5 billion to $4.7 billion. Analysts are forecasting earnings of 45 cents a share on revenue of $4.6 billion.

HMA owns and operates 58 hospitals in non-urban communities throughout the United States.