Health Management Associates
Operated acute care hospitals primarily in the southeastern United States.
PE-OWNED
Acquired by KKR2005-07-01
What Made It Great
Leading operator of hospitals in growing southeastern markets
What PE Will Likely Do
Significant staffing cuts, with registered nurses (RNs) replaced by lower-cost licensed practical nurses (LPNs) or nursing aides
Sale-leaseback transactions of hospital real estate, extracting equity for investors
Aggressive upcoding of patient bills to higher-reimbursement procedures and diagnoses
Elimination of unprofitable but essential services like maternity care, psychiatric care, and rural care
Extraction of large management and consulting fees from the acquired hospitals
Expected Timeline
“0 to 6 months months”
Announcements of 'optimization' initiatives and leadership changes
“6 to 12 months months”
Staffing cuts under 'efficiency' programs, service reviews begin
“12 to 24 months months”
Quality of care noticeably declines, with longer wait times and reduced access to essential services
“24 to 36 months months”
Major quality issues emerge, including department closures and potential scandals
“36+ months months”
Potential bankruptcy, hospital closures, or sale to another operator at a fire-sale price
Similar Cases
Other companies that followed a similar path after PE acquisition
What You Can Do
Actions
Be vigilant for any changes in the quality of care, such as longer wait times, reduced access to services, and signs of cost-cutting measures
Stay informed about any changes in hospital leadership or service offerings
Consider seeking care at alternative healthcare providers if the quality of care at Health Management Associates-operated hospitals declines significantly
Alternatives
Community-focused healthcare
Integrated managed care consortium