Thursday, June 21, 2018
Health

HMA looks to turn around St. Pete's Bayfront Medical by making it a hub

ST. PETERSBURG — In 2010, Health Management Associates paid $21.5 million to take over three tiny Central Florida hospitals that had been hemorrhaging cash for then-owner Shands HealthCare.

This year Shands, which kept a 40 percent ownership interest in the hospitals, got a check for about $400,000. The hospitals that in one year lost $12 million are making money.

"They've done a fantastic job of riding this financial ship with us," said Tim Goldfarb, chief executive officer of Shands, the University of Florida's not-for-profit affiliated health care system. "HMA is doing everything they promised they'd do."

That's the kind of partnership HMA refers to when touting its ability to turn around underperforming, non-urban hospitals.

The chain's promise Wednesday to transform the much larger Bayfront Medical Center, however, will be a whole different venture.

HMA plans to put its latest acquisition at the center of its existing hospitals along the west coast of Florida, strengthening the entire network.

HMA senior vice president Alan Levine, an influential Republican who headed up Gov. Rick Scott's transition team on health issues, said Bayfront will become the referral hub of a network that will include six other HMA hospitals: Brooksville Regional, Spring Hill Regional, Pasco Regional, Venice Regional, Charlotte Regional in Punta Gorda and Peace River Regional in Port Charlotte.

"Clinically, it fits as a flagship facility for our hospitals," Levine said. Plus, he said, "there may be opportunities to expand our footprint with Bayfront to do things on an outpatient basis."

HMA executives suggested several ways they might turn a profit at Bayfront, where operating margins have been tiny, and charity care has been generous. Among them: Using their size to strike better deals with insurers and suppliers, and offering services such as specialized surgeries that could attract more patients.

At the Central Florida Shands hospitals, the largest of which has just 80 beds, HMA used its top recruiters to find new doctors willing to move to rural areas, Goldfarb said. That kept more patients from migrating out of town for specialty services.

Goldfarb said HMA made good on its promise not to lay off existing employees.

Several investment analysts said Bayfront doesn't quite fit HMA's portfolio, but the acquisition still could have sound reasons behind it.

For one, HMA is employing a common strategy of clustering hospitals in a region, which could increase its negotiating power.

"They had the spokes and they just needed the hub," said Frank Morgan, an analyst with RBC Capital Markets. "That's not an insane strategy."

HMA was founded in 1977 by four doctors who set out to buy a privately owned hospital in Kentucky. The partnership laid the foundation for HMA, now a Fortune 500 company with 70 hospitals in 15 states and 35,000 employees.

Though one of the leading hospital chains, HMA is nowhere near as big as the largest for-profit health provider, HCA, which owns a number of Tampa Bay hospitals.

HMA is expected to report about $5.8 billion in revenue this year, Morgan said. By contrast, HCA is on track for $32.6 billion.

HMA reported a 5.5 percent decrease in revenue this past quarter compared to the same period a year earlier. Part of the issue, HMA says, is that its hospitals wrote off more charity and indigent care last quarter ($28.1 million) compared to the same quarter a year ago ($24 million).

As of December 2011, the company had $3.6 billion in long-term debt and capital lease obligations, executives told investors in an end-of-year report. But HMA also has $400.3 million of available credit.

Glen Losev, an analyst with WallachBeth Capital, said stock prices for HMA have been disappointing but unsurprising given the economy. He said he isn't recommending buying HMA stock right now, which closed Wednesday at $7.23, up 4 cents.

But, "would I want them to come into my town? Yes.

"They do their homework,'' he said. "They are very methodical in what they do."

Staff writer Letitia Stein contributed to this report. Jodie Tillman can be reached at [email protected]

Comments
‘BE AWARE’: Pasco mom posts to Facebook after son’s caterpillar sting leads to ER trip

‘BE AWARE’: Pasco mom posts to Facebook after son’s caterpillar sting leads to ER trip

ZEPHYRHILLS — The Pergolas’ Saturday morning volunteer work started like most, at a farm cleaning the property and trimming trees. Andrea Pergola, 38, stood on the driveway of the property when she heard her 15-year-old son Logan scream. At first, sh...
Published: 06/20/18
Moffitt receives $1 million donation from Richard Gonzmart

Moffitt receives $1 million donation from Richard Gonzmart

TAMPA — Runners gathered for the Gonzmart’s Father’s Day Walk and Jog where they raise money to help aid in Moffitt Cancer Center’s fight against prostate cancer. This year the event raised $110,000, but Moffitt had another surprise in store.Andrea G...
Updated: 2 hours ago
Compulsive video-game playing could be mental health problem

Compulsive video-game playing could be mental health problem

GENEVA — Obsessive video gamers know how to anticipate dangers in virtual worlds. The World Health Organization says they now should be on guard for a danger in the real world: spending too much time playing. In its latest revision to a disease class...
Published: 06/19/18
Funded by Alcohol Industry, Federal Study on Drinking Is Shut Down

Funded by Alcohol Industry, Federal Study on Drinking Is Shut Down

The extensive government trial was intended to settle an age-old question about alcohol and diet: Does a daily cocktail or beer really protect against heart attacks and stroke?To find out, the National Institutes of Health gave scientists $100 millio...
Published: 06/16/18
More than a third of American adults take prescription drugs that may increase risk of depression, study says

More than a third of American adults take prescription drugs that may increase risk of depression, study says

More than a third of American adults are taking prescription drugs, including hormones for contraception, blood pressure medications and medicines for heartburn, that carry a potential risk of depression, according to a study published in the Journal...
Published: 06/12/18
It’s time to use the stingray shuffle to avoid a nasty sting

It’s time to use the stingray shuffle to avoid a nasty sting

Courtney Bilyeu was running toward the murky water alongside a few military officers when it happened.She was an accountant for the U.S. Navy at the time. And on her way to take a swim with some coworkers in a California beach, she saw blood. The wat...
Published: 06/12/18
It’s important to wear sunglasses even on cloudy days, ophthalmologists say

It’s important to wear sunglasses even on cloudy days, ophthalmologists say

The next time you head to the drugstore to buy sunscreen, don’t forget to pick up some sunglasses, too. That’s because both products work to protect your body from the sun’s damaging ultraviolet rays.Wearing sunglasses for protection should not be re...
Published: 06/09/18
In St. Pete, kidney patients gather for science and solidarity

In St. Pete, kidney patients gather for science and solidarity

ST. PETERSBURG — Kidney disease doesn’t discriminate.The crowd of more than 200 patients who gathered at the Vinoy Renaissance St. Petersburg Resort range in age from teenagers to seniors. They are of different ethnicities and come from all over the...
Published: 06/08/18
Mayo Clinic Q&A: melanomas of the eye; how long should you take a beta blocker?

Mayo Clinic Q&A: melanomas of the eye; how long should you take a beta blocker?

YES, MELANOMAS CAN BEGIN IN THE EYEIs it true that melanoma can develop in the eyes? If so, how common is it? How is it treated?Melanomas can begin in the eye, a condition called intraocular melanoma. Treatment for intraocular melanomas used to prima...
Published: 06/08/18
For writer, using a heart rate monitor takes HIIT from frightening to fun

For writer, using a heart rate monitor takes HIIT from frightening to fun

High-intensity interval training is one of the biggest trends in fitness, but it has always seemed a bit scary to me. To a mere mortal with achy knees and an aging body, even the acronym — HIIT — sounded intimidating.But recently, I overcame my fears...
Published: 06/08/18