HMA Remains Stuck in Sick Bay

But Sheryl Skolnick, senior vice president of CRT Capital Group, was worried nonetheless. "Was it physician departures that caused the problem?" she wondered. "Was it a drop in admissions in a particular region due to economic conditions or population shifts?

"Or," she mused, "was the underlying reason related to quality issues at Franklin Regional in North Carolina?"

Franklin Regional has come under government scrutiny due to concerns about the quality of its care, the News & Observer reported this spring. At one point, the newspaper reported, Medicare actually "threatened to pull federal funding to treat poor and elderly patients" at the hospital.

HMA's CEO Burke Whitman has pledged to improve its operations and "lead the industry in quality and satisfaction" within the next few years. He claimed on Tuesday that the company has made "unambiguous progress" in this area.

Skolnick remains leery. Although she applauds the gains achieved under HMA's popular CEO, she says the company still has a long way to go and is maintaining her "fair value" rating on the company's stock.

"We would like to see more clear evidence of traction in the form of consistently improving same-store volumes before we would pay more for these shares," Skolnick explained on Tuesday. "HMA may have a better culture, but the turnaround still isn't secured."