Health Management Associates Earnings Call Insights: Strategy for Exchange and Flu-Related Business

Health Management Associates, Inc. (NYSE:HMA) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Strategy for Exchange

Kevin Fischbeck – Bank of America/Merrill Lynch: I wanted to follow-up on some of the commentary that you had on the exchanges. I guess two things. One, you mentioned that you don’t yet know where the rates on the exchanges will be, but I want to see if you have any initial color or had signed any contracts at this point? Then two, it also sounds like you’re willing to potentially take risk or align more with managed care companies. So, could you talk a little bit about what you’re thinking there and then how you get comfortable taking risk, in some of the questions you had about, the services you need to offer, how many people would be on the exchanges et cetera?

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Gary D. Newsome – President and CEO: Really, the strategy for exchange is really going to be market specific and be driven that way. (In terms of) partnerships with payors and assumption of risk, that’s really going to be a reality in certain markets, where there is a density of competition and we have a position to do that. That’s an opportunity there. There were other markets quite frankly that will not be the case. So all of our strategies going into (health) reform environment really is market specific Kevin. And we’ve developed over the last several years an outstanding managed care team and they come with tremendous experience across the industry, and we feel very confident in our ability to continue to reprice, strategically partner certain cases, and that partnership in certain cases also includes physicians.

Kerry Gillespie – EVP, Operations Finance: This is Kerry Gillespie. Let me add just one, you did ask – the part of your question earlier. Regarding our current contracting we have a few small contracts with local or regional managed care companies where the exchange rates are the same as our commercial rates. We haven’t built out any large payors yet in terms of what the exchange rates might be, but we are pressing for close to commercial rates, but that remains to be seen and it will be market specific.