NAPLES, Fla. (AP) -- Hospital operator Health Management Associates Inc. forecast disappointing first-quarter results on Tuesday and lowered its outlook for the full year, saying admissions didn't live up to its expectations and a variety of factors are making it harder for patients to pay their bills.
The company said inpatient admissions were lower than expected and admissions for observation climbed compared to a year ago. Health Management Associates is also setting aside more money to cover bills that may go unpaid.
Its stock declined $1.45, or 11.5 percent, to $11.14 in after-hours trading.
Health Management Associates runs 71 hospitals in non-urban areas. Most of its locations are in the Southeast. The company said that compared to last year, more patients were unable to pay their deductibles and copays because of greater health insurance premiums, shifts to insurance plans with larger deductibles, increases in deductibles and copays, and greater payroll taxes and gas prices.
The company said it expects to report income of 12 to 13 cents per share in the first quarter, excluding one-time items. It projects about $1.48 billion in revenue.
Analysts had called for net income of 23 cents per share and $1.55 billion in revenue, according to FactSet. The company reported $1.49 billion in revenue in the first quarter of 2012.
The company said it expects to set aside about 14 percent of its first-quarter net revenue to cover bills that may not be paid. That's up from about 12 percent in the year-ago quarter. It said emergency room volumes and uninsured outpatient procedures increased. The situation was particularly bad at hospitals Health Management Associates recently acquired.
Health Management Associates said adjusted admissions at hospitals open at least a fell about 5.7 percent because of reduced inpatient admissions and increased stays for observation. Observation stays that lasted two days or longer climbed at least 40 percent. The company said one of the biggest reasons for the growth in observation stays was an increase in Medicare and Medicaid Advantage business, especially in Florida.
Admissions at hospitals open at least a year are considered an important measurement of the company's performance. The measurement excludes results from locations that opened, closed, or were sold or acquired within the last year.
Adjusted admissions includes both inpatient admissions and outpatient procedures.
Health Management Associates is now forecasting full-year net income of 86 to 95 cents per share from continuing operations on revenue of $6.8 billion to $7 billion. In January the company projected net income of 86 cents to $1.01 per share on revenue of $7 billion to $7.2 billion.
Analysts expected net income of 88 cents per share on $6.13 billion in revenue on average.
Health Management Associates says admissions at hospitals open at least a year will be unchanged from last year at best and could fall as much as 3 percent at worst. Previously the company said those admissions could rise as much as 1 percent or fall as much as 1 percent.
Shares of Health Management Associates lost 5 cent to $12.59 during regular trading Tuesday. The stock has been strong in recent months, and on April 2, the shares reached a six-year high of $13.63.
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