Health Management Associates



Assignment 1: Financial Statement Analysis

Introduction

The focus of this paper would be on analyzing Internal Financial Analysis of the Health Management Associates. This section will cover a brief review Health Management Associates and financial analysis of three (3) consecutive years in order to highlight Financial Health, current industry trend and strategy for improving financial performance.

Discussion

Overview of the Company

Health Management Associates is one of the best American local hospital established in 1977. This hospital offers outstanding healthcare services to people. They have been operating in 15 states with 71 hospitals having 675 physicians last year. They have further planned to expand their operations that are linked with their missions and visions (Health Management Associates, 2013).

1. Financial Statements Review

After reviewing financial statements of Health Management Associates, company has not been performing well in year 2012. From last three years, financial condition is not up to the mark i.e. unstable financial position because of their current legal issues and increase in bad debt (mergentonline). This organization is supported by Justice Department via subpoenas i.e. Department of Health and Human Services and Office of the Inspector General that request for records pertain on a software program employed by ED doctors and also records concerning emergency department management. During 2012, there was news titled with “60 Minutes” in which former HMA employees interview were conducted regarding company performance. They highlighted that there was a huge pressure for admitting patients to emergency rooms in order to maximize profits. Paul Meyer a former compliance director state without any proof that Health Management Associates has been involved in fraudulent practices with respect to Medicare and Medicaid patients and this was further investigated by government as well. Meyer further claimed that administrators, Executive Vice-President and few doctors had charged Health Management Associates for unnecessary admissions of patients via ordering tests and then admitting those patients for no reasons but just to increase overall revenues of the hospital (Britt, 2012).

Addition to this, physicians were forced to meet up admissions quotas stated by Health Management Associates and physician not following their rules or do not meet up the requirement, they were either ask to leave or reprimand or terminate. According to previous employees, Health Management Associates has set benchmark of 20% admission rate for emergency department patients and 50% benchmark for those patients ranging from 65 and so on. Hence, with this news Health Management Associates ...