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Business Observer Monday, Aug. 13, 2012 7 years ago

Hospital companies warn of media scrutiny

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If you suspect bad news is coming, it might be better to warn shareholders ahead of time and soften the potential blow to your share price and reputation.

If you suspect bad news is coming, it might be better to warn shareholders ahead of time and soften the potential blow to your share price and reputation.

That's apparently what some hospital companies have concluded after learning that television and newspaper reporters have been asking questions about various medical and billing procedures.

Naples-based Health Management Associates warned shareholders recently that the television news show 60 Minutes is investigating some of the company's hospitals. Executives with HMA say one of the show's producers has been trying to interview former physicians with one of its Pennsylvania hospitals.

Similarly, hospital giant HCA alerted investors that it knew the The New York Times was working on articles about its cardiac procedures, emergency services and uninsured care, which printed this week.

It's highly unusual for any public company to warn shareholders of media inquiries when no stories have been published or aired. But from an investor-relations perspective, it may be the right strategy to warn the public and present the company's side of the story.

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