HMA Remains Stuck in Sick Bay

OKLAHOMA CITY -- Health Management Associates (HMA Quote) has replaced Tenet Healthcare (THC Quote) as the sickest player in the hospital group.

Both companies continue to struggle, with HMA weathering a painful drop in second-quarter admissions and Tenet posting another quarterly loss -- and cutting its 2008 guidance --- after bleeding for several years.

Both saw their shares plunge on Tuesday. HMA took the bigger hit, by far, as its stock plummeted 19% to $5.29 in late trading. Meanwhile, Tenet fell 6.9% to $5.80.

Rival hospital chains - including Community Health Systems (CYH Quote), LifePoint (LPNT Quote) and Universal Health Services (UHS Quote) -- lost some ground, as well.

At least Tenet could flex a few muscles as the company posted its strongest quarterly admissions growth in four years.

With same-store admissions rising 1.9% -- continuing a positive trend that started late last year -- and bad-debt expense kept under control, Tenet managed to cut its second-quarter loss by half to just $15 million or 3 cents a share. Excluding special items, the company broke even, beating Wall Street expectations by a penny.

Tenet boasted widespread second-quarter gains, with admissions climbing by at least 2.5% in every region except for the South. Volumes in Florida and Philadelphia - former trouble spots for the company -- grew by even more.

Excluding a drop in uninsured visits, outpatient volumes improved at the company as well. Outpatient surgery cases -- which can be especially profitable -- rose by a solid 3.4%, as a larger number of patients used the company's freestanding ambulatory surgery centers.

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