792985--2/27/2007--HEALTH_MANAGEMENT_ASSOCIATES

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{cost, contract, operation}

{acquisition, growth, future}

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{capital, credit, financial}

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{operation, natural, condition}

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We are subject to extensive government regulation regarding the conduct of our operations. If we fail to comply with any existing or new regulations, we could suffer civil or criminal penalties or be required to make significant changes to our operations. We are subject to anti-kickback and self-referral laws and regulations that provide for criminal and civil penalties if they are violated. Providers in the hospital industry have been the subject of federal and state investigations and we could become subject to such investigations in the future. We could fail to comply with laws and regulations regarding patient privacy and patient information security that could subject us to civil and criminal penalties. We are subject to uncertainties regarding health care reform. If any of our existing health care facilities lose their accreditation or any of our new facilities fail to receive accreditation, such facilities could become ineligible to receive reimbursement under Medicare or Medicaid. State efforts to regulate the construction or expansion of health care facilities could impair our ability to expand. If government programs or managed care companies reduce the payments we receive as reimbursement for the health care services we provide, our revenue could decline. Controls designed to reduce inpatient services may reduce our revenue. The continued growth of uninsured and underinsured patients or further deterioration in the collectability of the accounts of such patients could harm our results of operations. If the number of uninsured patients treated by our subsidiary hospitals in accordance with applicable law and each hospital s indigent and charity care guidelines increases, our results of operations may be harmed. Our growth strategy depends, in part, on acquisitions and joint ventures and we may not be able to continue to acquire hospitals that meet our target criteria or form joint ventures. We may also have difficulties acquiring hospitals from not-for-profit entities or pursuing certain joint venture activity due to regulatory scrutiny and other restrictions. We may fail to improve or integrate the operations of the hospitals we acquire, which could harm our results of operations. Our receipt of new Medicare and Medicaid provider numbers may be delayed following our acquisition of a hospital. If we acquire hospitals with unknown or contingent liabilities, we could become liable for material obligations. Other hospitals and freestanding outpatient facilities provide services similar to ours, which may raise the level of competition we face and adversely affect our results of operations. Our facilities are heavily concentrated in Florida and Mississippi, which makes us sensitive to regulatory, economic and competitive changes in those states, as well as the harmful effects of hurricanes and other severe weather activity in such states. It is difficult to predict the financial performance of a de novo hospital we construct and such facilities will take time to perform at the level of our other hospitals. Our substantial leverage could have a significant effect on our operations and on our ability to secure additional financing when needed. Our performance depends on our ability to recruit and retain quality physicians. If we do not continually enhance our hospitals with the most recent technological advances in diagnostic and surgical equipment, our ability to maintain and expand our markets will be adversely affected. Our hospitals face competition for medical support staff, including nurses, pharmacists, medical technicians and other personnel, which may increase our labor costs and harm our results of operations. We depend heavily on key management personnel and the loss of the services of one or more of our key executives or a significant portion of our local hospital management personnel could harm our business. We may incur liabilities not covered by our insurance or which exceed our insurance limits. Recent hurricane and storm activity in the Gulf of Mexico has increased our overall insurance costs, reduced our insurance coverage and increased our exposure to self-insured risks. Our business could be impaired by a failure of our proprietary information technology system. Fluctuations in our operating results and other factors may result in decreases in the price of our common stock.

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792985--2/27/2007--HEALTH_MANAGEMENT_ASSOCIATES_INC