Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Kelly E. Curry - Chief Financial Officer and Executive Vice President

Robert E. Farnham - Senior Vice President of Finance

Analysts

Gary P. Taylor - Citigroup Inc, Research Division

Health Management Associates Inc. (HMA) Citi 2013 Global Healthcare Conference February 27, 2013 11:05 AM ET

Gary P. Taylor - Citigroup Inc, Research Division

Joining us to have a discussion with HMA's management. Health Management Associates has been around since 1977. It's grown to include 70 hospitals in 15 states, over 10,000 beds and over $6 billion of revenue. And so this morning, we have Kelly Curry, Chief Financial Officer; Bob Farnham, Vice President of Finance; and John Merriwether, Head of Investor Relations. So gentlemen, welcome. Thanks for coming.

First question is -- everybody's sick of me asking my first big picture question, but I'm trying to ask everyone the first question and this is a softball that you can run with for a little bit. But as a health care team, we sat down and tried to really think about some themes and the title of the conferences, the value imperative, that you really see globally, not just in the U.S., public and private payers over the next 5 to 10 years, increasingly looking to reimburse health care providers and product companies based on the value that they're bringing to the table and not just for the volume and community service that's being provided. So one, do you agree with that thesis, do you think investors are overstating perhaps the speed of that transformation? And what is HMA doing to position itself for that transformation?

Kelly E. Curry

Well, value, what I would say is outcome-based medicine is definitely where it's going. So quality and being able to measure that and show measurable results based upon that is something very, very important, particularly as we go into an environment when you start talking about active exchanges and wanting to know, number one, what it's going to cost for the various array of illnesses that you have and then what kind of outcomes do you have relative to that because if it's -- if you don't have the outcome related to it, then what you're -- that's just going to be more cost with either your partner or as a part of the transaction with the insurance company whether it's still on the early days. I think we're going to -- muddling in to the last half of your question a little bit here. I think that in our markets in general, we're going to see a slower transition. I think the more urban markets are going to see it sooner, although I think health care reform is going to roll out slower than what's currently contemplated just because of the environment that we're presently in and the amount of the preparedness that you -- that HHS, state of readiness that they're in, to kind of get the stuff off the ground.

So when you -- when I look at it that way, for us, I think it's -- we're going to have opportunity to do a little bit of schooling with watching what's happening in the more urban markets. But certainly -- and we, as you know, for many years now, we put a lot of emphasis on quality and outcome and we're continuing to do that because we want to be able to produce that kind of result, knowing that, a, not only is that where the market is going but it's important in terms of the product that you're delivering in your community that you serve. You want to -- I'm sure you got some thoughts to this.

Robert E. Farnham

Well, in terms of value, the key ingredient there at least that the government is trying to define almost to being a point of given is the quality. And the government is measuring that, not only for hospitals but ultimately physicians as well. And we've made very good progress with regard to our Core Measures on that. And part of our Getting2Great culture has been to get an improved quality in every part of our business, and we received a number of accolades from Fortune Magazine last year as being the #1 medical facilities company in the health care space. We were glad to see that accolade. And also, at the Joint Commission last year, we had 41 of our facilities recognized as top facilities. And they only recognized about 18% of facilities overall in the country as top facilities. So to have 41 of our, at that time, 62 facilities, I think, in that top 18% is pretty good evidence of the progress we've made with regard to quality. So that's the key component, almost a given now when you begin to look at value and the kind of things that we can do in our markets going forward.

Gary P. Taylor - Citigroup Inc, Research Division

A couple of things I'd like to just follow up on. So in my view, we haven't -- in a note earlier this week, I said, look, we'll just say it in our view it seems pretty unlikely open enrollment on exchanges can begin on October 1 of this year, just given the technological challenges of connecting the IRS and just getting the whole IT infrastructure set up, et cetera. So when you talk about a slower rollout, is there anything more specific than that or are you seeing just a combination of getting infrastructure set up takes longer, some states are still deciding whether they're going to be in or out or we may see some staggered state participation? Is there anything more specific than that?

Kelly E. Curry

Well, right now, you only have 16 states that have exchanges. And they're in the West or the Northeast. So that's a pretty -- that's a roadblock right there to roll out. We're all for rolling it out, let me say that. I mean we want to see reform come. We certainly -- we're just happy to see Governor Scott choosing to implement the Medicaid expansion. We think that's very good for -- economically for the state, it's good for business. I think it will create jobs, and that's good for us. Other states that are important to us are Tennessee and Mississippi. Ultimately, we have to wait and see what happens there. If you look at history, I think Mississippi has usually taken federal money, so that's likely to maybe continue. The -- I think the political environment governs that somewhat. But at the end of the day, providing -- it's a good thing to provide coverage to people that don't have it. And I think everybody agrees with that.

Robert E. Farnham

But you make a good point there, Gary, with regard to the time line. I mean, January 1, 2014, is not very far away, and the policies are supposed to be sold beginning in October. And so if you back up even from there, the plans that are going to be approved to sell policies on those exchanges have to be approved sometime this summer. And as I understand it, the criteria for those plans isn't all quite finalized yet either. So when you back up the time table and things that has to be done in order for these plans to be selling policies October 1 to be effective January 1, there's a lot that has to be done.

Gary P. Taylor - Citigroup Inc, Research Division

Interested in your thoughts on the disconnect that I kind of see between what the nonprofit hospital industry is saying and you've had most of the for-profit hospitals here this week. But most of the nonprofit, scrambling almost seems to be the right word, but scrambling to vertically integrate, to assemble physician that were -- to participate and form ACOs, participate in the demonstration projects and really expressing, in their view, pretty broadly I think, a sense of urgency about fee-for-service going away and some of the risk-based models coming. We'll have our nonprofit conference in the middle of May here in this hotel, I think, again this year and I anticipate all the big nonprofit facilities will spend all their time talking about that for the third year in a row. Yet most of the for-profit companies are saying we're going to be a little bit wait-and-see. We're not going to be rushing into a bunch of risk-sharing agreements, and perhaps all of this might move a little slower. Payment model reform can move a little slower than maybe some people are thinking. So just free form comments just on that perceived disconnect?

Kelly E. Curry

Well, I think, first off I'll talk about ACOs for a second. I think the term is being used a little more broadly that Medicare ACO as contemplated under the ACA don't make any sense. So I don't know how many people really want to do those, unless you're the -- maybe the only hospital in town and the only medical group in town, that might make some sense, okay? But outside of that, you can't control the patient's cost associated with where they go for care. So I don't know how that financially works. But now in terms of little a, little c, little o, which are really health plans, yes, I think in a more urban market, those are probably going to happen and are happening. And I think probably that there's a couple of different way to approaching that. One can approach it on a business arrangement, where you are offering -- number one, you can give a pretty certain cost data to them associated with the various treatments. And that's an advantage to them when you participate that way. Or you can go into an equity partnership and you can do cost -- risk sharing. I don't know if you have to rush into those because the -- right now, it's -- with the database that you're talking about that you need to project the actuarial utilization doesn't exist, I don't think, no. So because this group of people hasn't been covered before, I think the assumption is that they would require less health care because you would expect them to be younger. But that's an assumption, that's not based on a fact yet. So factors like that out there, I think, is probably going to be pretty cautious. Cautiousness probably rules the day in trying to evaluate the risk, at least from what would be our perspective. I can't speak for other companies. But from our perspective, that would be the case.

So now in terms of our interest in what we're willing to enter into is that I think you know from our history, I mean we've done -- we were one of the first to do nonprofit JVs and we've been very open to a lot of different alternatives for how we carry out the business for health care in our community and we will continue to be. And we'll consider and look at any opportunity that presents itself. I think it's most likely similar to what Tenet announced yesterday that you're going to see initially commercial -- pretty much commercial rates and what discounts that will be agreed will be based on volume. I think one of the advantages and -- that we can bring to the table is that for various disease categories, we can tell them what their cost would be and plus we can offer a large array of services because what we don't have locally, we have nearby. For instance, with our acquisition of St. Pete, we have 6 hospitals in that general market area and we can provide a range of services up to and including neurosurgery for epileptic diseases, that are only done in 4 hospitals in the country. So we can give a wide range of services to meet the need that would be existing to be covered. So -- but those kinds of scenarios, I think, we're very well positioned, we're a low-cost provider, and I think we'll do well in considering the different alternatives. I can't speak for what nonprofit thinking is, to be honest with you. I don't know. I mean the -- there's 3,500 or so non-chain affiliated or small-chain affiliated nonprofit hospitals out there. And I'm sure they're trying to get their arms around a big change in the payment system. The majority of them don't make money on Medicare, much less Medicaid. So the challenge is going to be for them to being able to create structures that they can operate profitably within on what are pretty narrow margins. So the challenge is definitely there.

Robert E. Farnham

I would just add that we have been getting asked a lot of questions about managed care contracting, particularly in light of Tenet's comment. And basically, our contracting has been the same, pretty much along the same line these prior years. We probably have about 90% of our managed care contracts done for 2013. 2014 is probably at a 60% or 65% level, and it's basically the 5% to 7% range on increases. And there's probably a few more in the 5% to 6%, as opposed to 6% to 7% increase than we would have a few years ago. But essentially, that's been on contracting. We have not signed any exchange managed care contracts per se. Now we have had -- and those have been all fee for basis, the traditional fee-for-service. We have had some managed care companies that would like some language, and so what we've essentially have and added is the default language that exchange care pricing would mirror existing commercial pricing. But that doesn't mean that if some payer comes forward to us with a narrow network contract that exchanges more volume for discount prices, we wouldn't be open to talking about that. That's always been the case. But that hasn't happened to this point. We'll see how that develops over time. But as Kelly said, with our vertical integration on our markets and being able to look at providing services over a broader range on a continuous care that puts us in a good position to be able to look at those kinds of opportunities if and when they present themselves with a lot of flexibility because we're a low cost provider of care.

Gary P. Taylor - Citigroup Inc, Research Division

When you look at the totality of ObamaCare, a lot of moving parts, a lot of regs still to be published, a lot of unknowns, maybe a matrix of assumptions that kind of looks like that. But generally, as we work through that, as I work through that, we think there's more for the hospitals here than you're losing on the reimbursement side. We view it as net positive. What do you think the biggest unknowns are right now with respect to implementing this coverage expansion in '14 and '15?

Kelly E. Curry

When? When it happened? That's the biggest unknown. But the -- so far, we really haven't seen much out of HHS. So I don't know what their state of readiness is to get the thing moving. So the -- that is probably the biggest factor. And as I said earlier, I mean we're all for it getting going. So we're -- we want them to go ahead and get things accomplished. But the thing that will happen is Medicaid expansion. And that's a very good thing because you have the 133% now that -- and there's a gap. That represents probably 1 million people in the state of Florida right there. And that's the cost we're already incurring. So the incremental benefit of that at $0.10 on $1 would be great. So we're -- we think that Medicaid expansion is very, very important relative to the business community and to the economy of the state. So it'll be interesting to see how things develop. And the other part is that for the state, that if they don't elect it, it means they have a federally mandated -- or a federal network established. And I don't know what they've done to prepare for that because which I see is another kind of a roadblock there because each state has its own insurance law. Now I'm guessing if the federal government is going to offer an insurance product or a structure for an insurance product that would have to be approved by the State Insurance Authority just like it would for anybody else. So the timeframe for all of that to take place, so where you don't have -- certainly, from our perspective, we're -- if necessary, I mean we're willing to invest into setting up networks. We're certainly willing to do that. So that's something else that's out there that's a possibility for consideration as well.

Robert E. Farnham

Yes, there's going to be some puts and takes with regard to reimbursement. We'll see the additional reimbursement particularly on the expansion of the uninsured. And there will be some takes too with regards to the DSH cuts and whatnot. But I think that the interesting part of it will be what the impact on utilization will be. Obviously, a lot of the Medicaid expansion in those patients we've already been treating were just getting paid for what we didn't get paid for before, but what's going to happen with the exchanges and what kind of utilization will be there over time, because the range of services that has to be offered are much broader than any Medicaid type plan. And so if Massachusetts is any proxy for the trends in utilization, those will certainly be up than down. So that's certainly favorable for everybody in the industry.

Gary P. Taylor - Citigroup Inc, Research Division

Great. One of the sort of wildcards, so to speak, or one of the unknowns, is obviously, ObamaCare -- part of paying for ObamaCare is cuts to disproportionate share payments, and that's supposed to be primarily allocated to the states based on how much coverage uptick there is, et cetera. A couple of weeks ago, HCA had raised this issue that even before we get to those cuts, how the feds may define uncompensated care could hurt their DSH payments before they even get to the cuts related to reduction in compensated care. So in other words, uninsured discounts initially in a consultant proposal not yet proposed by CMS, not being included in that calculation. Obviously, you guys, for a few years now, have been accelerating those uninsured discounts. So any view on how much that could impact you? Any view on how successfully the industry, not just for-profits but the nonprofits as well, might lobby for more comprehensive definition of uncompensated care?

Robert E. Farnham

That's interesting. The framework is out there. It's somewhat convoluted and complicated. And the reason for that was to try to give some benefit to those who still provide higher levels than others of indigent care. Those that haven't seen a big migration because of expansion of Medicaid or whatever. So we'll see how that definition plays out. The historical definition has been the cost report with charity care plus non-Medicare bad debt. But as it expanded, it will be the same for everybody. So at the end of the day, each hospital divided by the parts of total of the 4,000 hospitals that are going to participate times the size of the pool. And that's another variable besides the definition of uncompensated care. How big is the pool? What's the size of the pool going to be? That will ultimately determine how much of that -- that's ultimately the 75% piece of the 100% that we'll ultimately get. So we'll have to see how that plays out.

Kelly E. Curry

At the end of the day, I mean there could be some difference because of ratio of cost to charges for individual hospitals because of the rates relative to the other hospitals are different. When you put the 4,000 hospitals together and divide it out, there's probably no meaningful difference in total when you start doing the actual calculation. It's going to be that hospital to the total.

Gary P. Taylor - Citigroup Inc, Research Division

Yes, it just looks like perhaps the for-profits have, even though the definition is somewhat arbitrary, have made a disproportionately, no pun intended, use of uninsured discount bucket more so than the charity bucket, and that might redistribute some dollars among participants before we even get to looking at the mandated ACA cuts. Have you -- we have some of our own estimates that we've pooled, some cost reports, et cetera. But have you guys disclosed total annual Medicare, Medicaid DSH?

Robert E. Farnham

That's $200 million. That's $200 million, a little more than half is Medicare.

Kelly E. Curry

A little over half is Medicare.

Gary P. Taylor - Citigroup Inc, Research Division

Okay. You just said that on the call last week.

Kelly E. Curry

Yes.

Gary P. Taylor - Citigroup Inc, Research Division

You were talking about that, yes? Last kind of regulatory thing, and then I want to get into some operating stuff. So short stays, this has been a big headwind for the industry. It's been a headwind for HMA. Where do you feel we are in terms -- make it a ballgame. What inning are we in? In terms of movement of short stay to outpatient having an impact on a -- typically [ph] that care is a lot less involved and the impacts that could be having on your EBITDA, so what inning are we in? How much of an EBITDA headwind do you think that was in '12 and what do you think it is will be for '13?

Kelly E. Curry

Well, as I said on this call that 12% -- they were up 12% of duration, we're up 12% last year and they were up 25% in the fourth quarter. And they're continuing -- we are continuing to see growth there and we're seeing growth in over 1-day stays, 2 and 3-day stays. And I think for us, what -- about 3 years ago, I guess, the more urban providers kind of went through this curve. It's just now coming to us, so we're having to swallow it right now. But the -- I think the thing is that, as it has gotten older, the willingness to put more people in the over 1-day stay on the part of the insurance companies has gotten greater. And the thing is about that is that it puts you -- you go to the hospital, we feed you Jell-O for 3 days. And every time you go to sleep, we wake you up, okay? So you feel like you've been in a hospital. And because your meds are now kind of messed up, you got to go to a skilled nursing facility and you get there and you find that you weren't in a hospital, and you have to pay for the skilled nursing facility. That's a major issue for people to encounter that because they didn't know that they weren't in the hospital.

Gary P. Taylor - Citigroup Inc, Research Division

And the qualified inpatients [indiscernible] for nursing home?

Kelly E. Curry

Yes. And because at any other time, they would have been. And so this is becoming -- I mean, this is a very significant issue, not to mention the fact Medicare regulations are very clear. They say that an observation is 23 hours or less. So Medicare Advantage Plans just ignored that. And so number one, we designed some strategies that we're implementing to deal with that, as Gary mentioned on the call. And we're going forward with those. But this is the big issue and it needs to be dealt with because it's not fair to people for them to be treated that way. And it's not fair to us because we're having to treat them just like an inpatient.

Gary P. Taylor - Citigroup Inc, Research Division

And you obviously get reimbursed less for those. Have you brought that down to EBITDA impacts or one of your...

Robert E. Farnham

Well, we haven't -- not until generally we're getting 10% to 20% of what we would normally get than an inpatient. That also -- the other thing that some of the Medicare Advantage Plans are doing. And I think probably the urban saw this over the last year or 2 is the Advantage Plans are incentivizing physicians to keep patients out of the hospital by setting up some kind of pool that they're participating in based on the utilization or non-utilization that they've had on the hospital, inpatient side. So I think that's the factor we're seeing a little more today than we did a year ago.

Kelly E. Curry

I mean some real-life examples, I mean we had one of our associates whose parents had pneumonia in one lung and they couldn't -- at 80 years old, and that wasn't a valid admission. So what we're supposed to do, send this guy home? I mean it's clear that there's a lack of cognitive thinking going on that needs to be dealt with.

Gary P. Taylor - Citigroup Inc, Research Division

So given that, that trajectory of shift accelerated in '12, you obviously -- the guidance you gave for '13, you must have more greater headwind baked into '13 than you had for '12? Are you anticipating that?

Kelly E. Curry

We've -- you've mentioned it earlier about the shift to outpatient. Now that's something that we have really aggressively invested in, in our company, both through menu and access to be able to offer that. And that has been -- as you know, I mean that's a very good business. It also dramatically changes the mix of the -- your staffing load that you have in the hospital when you're doing more outpatient. And we're getting very, very efficient at managing that. And so in that -- in terms of cost of health care, more and more things are going to move to outpatient. And the -- where you -- and those procedures that can -- that are done in outpatient facilities that are not hospitals are lower cost even more so because you don't have to build to hospital standards, so your capital cost is less. So there's a lot of advantage there, and I think, yes, going forward, we're going to see more and more and more of that and we're going to be at the forefront of it.

Gary P. Taylor - Citigroup Inc, Research Division

Okay. Shifting gears a little bit. Tennova was one of very large acquisitions that you've done. Did that close late '11 or early '12, I forget?

Kelly E. Curry

Late October. Late '11.

Gary P. Taylor - Citigroup Inc, Research Division

Late '11. So you've owned that now for not quite 1.5 years. Can you just give us a little update on what you're seeing there clinically, volume-wise, market share and just financial performance, how's that doing?

Kelly E. Curry

Well, in terms of our expectations when we acquired it, it's meeting those. And we're very happy with the performance there. And we're excited about what the future holds for us in that market. We really wanted to -- the net part of Tennessee is there's just a tremendous amount of opportunity. And that -- and parcel of that is the amount of outpatient work really hadn't developed like we've seen it develop in other areas of the country, so there was an opportunity in addition there. So we're very satisfied with our performance. And frankly, our acquisition performance has met our expectations on all of our acquisitions, so -- and been very good contributors. I want to go outside your question a little bit here and say I think in the future, Gary, with the pressures that there are, smaller nonprofit systems like that, there might be more opportunities down the road as a potential. An we certainly would be interested based on the experience we've had with the Tennova acquisition and those type of possibilities in the future if it fits our markets and our criteria that we're looking for relative to what we've already stated.

Gary P. Taylor - Citigroup Inc, Research Division

Given kind of this disruptive view of the world that I think a lot of the non-profits hold that make sense to me, that the opportunity there is going to be more robust. Do you think by definition those mean more of the JV-type acquisition venture like Bayfront or does that -- is that not necessarily hold true? When we think about the next 10 deals at HMA, do we think old model? Do we think new model? Or we'll just see what comes about?

Kelly E. Curry

It's really the community that decides that. I mean, we -- from our perspective, we like having them as partners. Number one, I mean, a, it's obvious benefit in the sense that it's less capital outlay for us because we have a partner that's investing with us going forward, et cetera. But we like it because the sense of the community involvement with the hospital stays very, very real. Now, where they choose not to do that, we have other ways of making sure that we retain that connection, but it's certainly easier to do where they are involved as a equity partner. But it just depends on what the community wants to do. They have to make the decision on what's best for them. We're just simply trying to accommodate with them the best way for the community to move their health care model forward. And it's the third most important asset in the community. It's police department, fire department, hospital. They can't go grow a business without a great hospital and medical network, so you may be able to provide that. And so their -- finding the right partner and the right structure is key in meeting the needs of the community. And the way we do it is through leases. Sometimes, that's much -- that way, they feel that's a better way for them to participate. But we're always happy to have them as equity partners. It has worked very well for us.

Robert E. Farnham

Also very difficult decision for the local community board that is selling the hospital. But if they're going to continue to own a 20% interest than, let's say, than taking a partner to invest in the facility going forward. So that's a much more palatable alternative to communicate to the community. And it's a win-win situation because they'll continue to receive 20% of the cash flow after their share of CapEx. And so they have a source of income, if you will, into the foundation that will exist post closing the transaction for charitable or health care needs of the community going forward. That's a win-win situation.

Gary P. Taylor - Citigroup Inc, Research Division

Is it harder to manage the capital expectations, capital investment in a JV? I mean when Triad was a public company and they were very focused on this model, this could not get rewarded in public market place because they never generated a dollar of free cash flow because the CapEx was so high. Now, that may have been a decision-making characteristic of that management team or was that something struggle [indiscernible]?

Kelly E. Curry

Or the quality of the assets they acquired. I mean, the -- we structure our transactions with that in mind upfront, so that people are well aware what's required and what the expectation is going to be. But the -- we haven't found that to be an issue, no. Actually, it's the opposite. Our partners usually come back to us within the first 12 or 18 months and tell us how happy they are with the arrangement that they made.

Gary P. Taylor - Citigroup Inc, Research Division

Any questions from the audience? Right there.

Unknown Analyst

At the risk of sounding naïve, I was just sort of curious. Beginning next year, why shouldn't the not-for-profits start paying taxes?

Kelly E. Curry

We agree. I mean, I don't know. I can speak for our company in the sense that we know that as a -- in terms of uncompensated care, we give away a great deal of uncompensated care. And typically, more so than in the public arena. But as you move towards eliminating the uninsured, which I think is the real root of your question, and a lot of this were established on the basis of treating people that couldn't pay, then is there a need to continue the nonprofit status. And I guess that's a question for our legislators. But the -- we certainly have to manage an environment that requires us to meet our community's needs. And that's -- we count that as part of our responsibility in serving the community

Unknown Analyst

If we did see the not-for-profits eventually having to pay taxes, which I think they should just based on how the world was changed, how would that affect you and what advantages would you have?

Kelly E. Curry

I don't think -- I think our advantage is not affected by whether or not they pay taxes because we, I'm speaking for our company, we're a low-cost provider of care. Even amongst our very -- other for-profit companies, on a non-case mix adjusted basis, we're a little above LifePoint. If you case mix adjust it, I think you'd find that we're the best. And we're very efficient operators. So that's always going to play to our benefit regardless of what the struggles are.

Robert E. Farnham

I think you'd see an increase in our acquisition opportunities. So you could say, certainly if they're not -- if they're no longer not-for-profit, your charitable contributions are -- which they rely on for capital and to cover operating losses, that's going to dry up. And you replace that with additional taxes on smaller margins, 3% to 4% margin that you're seeing now, those would evaporate. So I think you'd see -- I think our acquisition pipeline would get even bigger.

Gary P. Taylor - Citigroup Inc, Research Division

It may not be much taxable income left if the charitable contributions dry up, it may not be much of a tax collection obviously with the [indiscernible] to excess capital.

Kelly E. Curry

Well, if your tax deduction exclusion for municipal income goes away, you're going to see cost of capital for non-profits increase considerably.

Gary P. Taylor - Citigroup Inc, Research Division

That is something that's currently being discussed.

Kelly E. Curry

Yes. That is probably -- that would be very significant to them because the capital -- that is their only avenue for capital access. So that would be a very significant impact.

Unknown Analyst

Staffing costs. How have they trended the past year? Have they changed at all, primarily with [indiscernible]?

Kelly E. Curry

No, not really, no. Given the unemployment and flattish type volumes at least on the inpatient side, there has not been upward pressure on labor cost. There isn't any really wage inflation. I think Ben Bernanke said yesterday that right now, that in the present environment, there's just no inflation and not in the immediate future.

Gary P. Taylor - Citigroup Inc, Research Division

I mean you could probably argue that the greatest countercyclical benefit to the business model fitting into the financial downturn right, I mean , certainly expect the payer mix to deteriorate, bad debt to increase. But when you look at labor cost per adjusted patient day that ran a decade at 5% or 6% and now are running 1% or 2%, has been a really significant benefit.

Kelly E. Curry

And certainly contributed to lowering the cost of health care. There's no doubt about that.

Gary P. Taylor - Citigroup Inc, Research Division

One minute left. Any takers? If not, gentlemen, thank you very much.

Unknown Executive

Thank you [indiscernible].

Kelly E. Curry

Thank you. Appreciate being with you and your interest in our company.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Health Management Associates' Management Presents at Citi 2013 Global Healthcare Conference (Transcript)
This Transcript
All Transcripts