HMA Riding High; Bayfront Price $162M
Pending approval of a lease by St. Petersburg’s City Council, for-profit hospital chain Health Management Associates Inc. will pay $162 million to take over most of Bayfront Medical Center, the Tampa Bay Times reports.
The council will vote next week on the lease. Among the issues some members are pushing for:
- Continued commitment to charity care
- $100 million investment by HMA over five years
- No rebranding of the name to say Tampa Bay
Meanwhile, HMA’s stock hit a year-long high of $10.99 Friday morning on release of its 2012 earnings, indicating investors have shrugged off worries over an early-December negative “60 Minutes” broadcast about an ongoing federal investigation of accusations that physicians felt pressured to admit emergency-room patients.
But the piece may have had an impact, as HMA President and CEO Gary Newsome noted Friday morning in a call with analysts. He said that in the fourth quarter, when the program aired, there was a 24 percent increase in ER visits that were classified as "observation," not resulting in admission.
Another factor may be increasing pressure from insurers, including Medicare's audit contractors, questioning the wisdom of admissions after the fact and blocking payment.
"Physicians feel like someone is looking over their shoulder," Newsome said.
The company, based in Naples, reported net revenues for 2012 rose 6.6 percent, to nearly $1.5 billion.
The Motley Fool reported at mid-week Friday that HMA is one of the three hospital companies that stand to benefit from changes in the health system unfolding through the Affordable Care Act.