this is assignment 1 Financial Statement Analysis Student name University Professor October 25, 2016 Financial Statement Analysis Based on your review of the financial statements, suggest a key insight about the financial health of the company. Speculate on the likely reaction to the financial statements from various stakeholder groups (employee, investors, shareholders). Provide support for your rationale. Health Management Associates, Inc. (NYSE: HMA) is the operator and owner-general acute care centers in the non-urban communities situated in the US, particularly in the Southwest. The organization was founded in 1977. The hospitals provide services such as oncology, emergency room care, general surgery, internal medicine, radiology, pediatric services, coronary care, and diagnostic care ( www.healthcaremanagement.com ).The company is also providing outpatient services like x-ray, respiratory therapy, one-day surgery, laboratory services, physical therapy as well as cardiology therapy. The mission of the Health Management is to provide America’s best local healthcare. They provide processes, capital finance, expertise, and people that can ensure that the local hospitals can accomplish their mission of delivering compassionate and high-quality healthcare that would substantially improve the lives of patients, the communities they serve, and the physicians providing the care www.healthcaremanagement.com ) With regard to the review of the current financial statement, HMA is in a dangerous financial state as a result of the present increasing debts and legal woes. The Office of the Inspector General, Justice Department, and the Department of Health and Human Services served the organization with summons regarding a software program that was used by ED doctors and the records from the emergency department. Some reports suggested that there was pressure from the company’s hospitals management to admit patients from emergency rooms so as to maximize profits. Paul Meyer, former compliance director, claimed that HMA’s fraudulent activities could attract government investigation (Britt, 2012). The common stock of Health Management Associates was owned by almost 850 shareholders, as per the records of December 31, 2012, with hundreds of institutional investors included. HMA had expanded to include 70 hospitals situated in 15 states, with roughly 10,562 present licensed beds. In 2012, HMA realized about $5.9 billion in net revenue (Britt, 2012). HMA gets payments for the services it renders from the federal government through the Medicare program, the states in which it functions under each Medicaid program, and commercial insurance, among others; and patients, encompassing deductibles and co-payments. Basically, deductibles and co-payments are part of the bill of patients for the medical services provided, which many government and private payers expect the patient to cater for. The amount of deductibles and co-payments v.

1. this is assignment 1
Financial Statement Analysis
Student name
University
Professor
October 25, 2016

2. Financial Statement Analysis
Based on your review of the financial statements, suggest a key
insight about the financial health of the company. Speculate on
the likely reaction to the financial statements from various
stakeholder groups (employee, investors, shareholders). Provide
support for your rationale.
Health Management Associates, Inc. (NYSE: HMA) is the
operator and owner-general acute care centers in the non-urban
communities situated in the US, particularly in the Southwest.
The organization was founded in 1977. The hospitals provide
services such as oncology, emergency room care, general
surgery, internal medicine, radiology, pediatric services,
coronary care, and diagnostic care (
www.healthcaremanagement.com
).The company is also providing outpatient services like x-ray,
respiratory therapy, one-day surgery, laboratory services,
physical therapy as well as cardiology therapy. The mission of
the Health Management is to provide America’s best local
healthcare. They provide processes, capital finance, expertise,
and people that can ensure that the local hospitals can
accomplish their mission of delivering compassionate and high-
quality healthcare that would substantially improve the lives of
patients, the communities they serve, and the physicians
providing the care
www.healthcaremanagement.com
)
With regard to the review of the current financial statement,
HMA is in a dangerous financial state as a result of the present
increasing debts and legal woes. The Office of the Inspector
General, Justice Department, and the Department of Health and
Human Services served the organization with summons
regarding a software program that was used by ED doctors and
the records from the emergency department. Some reports

3. suggested that there was pressure from the company’s hospitals
management to admit patients from emergency rooms so as to
maximize profits. Paul Meyer, former compliance director,
claimed that HMA’s fraudulent activities could attract
government investigation (Britt, 2012).
The common stock of Health Management Associates was
owned by almost 850 shareholders, as per the records of
December 31, 2012, with hundreds of institutional investors
included. HMA had expanded to include 70 hospitals situated in
15 states, with roughly 10,562 present licensed beds. In 2012,
HMA realized about $5.9 billion in net revenue (Britt, 2012).
HMA gets payments for the services it renders from the federal
government through the Medicare program, the states in which
it functions under each Medicaid program, and commercial
insurance, among others; and patients, encompassing
deductibles and co-payments. Basically, deductibles and co-
payments are part of the bill of patients for the medical services
provided, which many government and private payers expect the
patient to cater for. The amount of deductibles and co-payments
varies depending on the provisions of the health plan in which
the patient is participating. The company is currently collecting
approximately 50-55% of the co-payments and deductible
amounts. In the recent years, efforts have been increased to
collect the deductible and co-payments amounts at the same
time when services are provided. These payments are subject to
the same collection practices as done with other patients’
accounts receivables.
Identify the current industry trend that has the most significant
impact on your chosen organization’s financial performance.
Indicate the trend’s impact on the financial performance of the
organization. As the CFO, suggest at least one (1) way that you
might minimize the impact of the trend on the organization.

4. Declining hospital admissions is the current trend that impacts
the financial performance of HMA. Many patients have opted to
withdraw or delay elective procedures and surgeries. As a result
of the 2007 recession, many people lost their health insurance
due to job losses and the decreasing employer-based healthcare
coverage benefits. This included in the mix, the increasing
number of uninsured patients, bad debts, uncollectible revenues,
and radical reduction of federal funding that many hospitals
depended on. As the CFO, we intend to increase revenue at our
hospitals through the provision of quality healthcare (Ginter,
Swayne, & Duncan, 2002). As a result, admissions, emergency
room visits, surgical volume, and outpatient visits will increase.
The hospitals are directed and administered at the local level by
the chief executive officer. Well, one of the crucial elements of
our strategy is to develop and maintain a cooperative
association with our physicians and care providers. We would
maintain a physician recruitment and development program
which is designed to entice and retain qualified primary care
physicians and specialists, in conjunction with our present
community and physician needs, to expand the services
provided by the hospitals. In order to end this trend of few
admissions being realised in the hospitals, we also intend to
create a special program that is designed to develop attractive
practice opportunities for qualified physicians in the regions
that our hospitals serve so as to develop outstanding medical
staff, improve the retention and satisfaction of the primary care
providers and the physicians, and also develop practise models
which are sustainable in the competitive healthcare environment
(Longest, Rakich & Darr, 2000).
As the CFO, suggest one (1) key strategy that you might use to
improve the financial performance of the organization.
Recommend an approach to implementing the suggested
strategy. Provide support for your recommendation.

5. As the CFO, I believe that forming a merger with Community
Health Systems is a good step to ensuring that financial
performance of the organization is improved. The merger would
serve as an optimal time for the new organization to develop a
culture of openness, learning, support, and improvement to
ensure its financial survival. It would be my responsibility to
cooperate with the senior management to create and implement
effective internal control initiatives which will encompass
authorization, ethical leadership, and oversight within the
organization. Transparency must be instilled in the organization
with regard to procedures and policies to develop trust among
the employees and other stakeholders. Leaders have the
responsibility of leading by positive example; setting the way to
be followed, demonstrate confidence, and being accountable
(Ginter, Swayne & Duncan, 2002). Such an environment will be
a point of motivation for the physicians. As a result, they will
provide quality services to the patients. This will attract more
patients to come in for medical attention hence increasing
revenue collection.
References

6. About us: Health Management Associates. Retrieved October
21, 2016 from
http://www.healthmanagement.com/
Britt, R (2012, December 3). HMA feels fallout from “60
Minutes” story.
The Wall Street Journal.
Ginter, P., Swayne, L., & Duncan, W. (2002).
Strategic Management of Health-Care Organizations
(4th Ed.). Malden, MA: Blackwell.
Longest, B., Rakich, J. & Darr, K. (2000).
Managing Health Services Organizations & Systems
. Baltimore: Health Professions Press.