Carolinas HealthCare reduces 1Q loss - Kansas City Business Journal:

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Investment losses for the latest quarte totalednearly $101 million. Chief Financial Officer Greg Gombar anticipatez gains in the financial market in April and May will eraserthose losses. Carolinas HealthCare uses investment earnings forcapitalo expenditures. That money is not used for dailgy operations. The health-care system hope negotiations with several lenders will cut its interestt expenses tied to variable debt andhigher bank-liquidityu fees. Those fees are about $1 million per month. Interest expenses in the first quarterwere $21.8 million.
From an operationapl standpoint, Carolinas HealthCare had a strongfirsy quarter, says Russ executive vice president for businesss development and planning. Net operatintg revenue climbed 8.6 percent to $1.2 billion Operating income exceeded $24.5 million. The health-care system saw adjusted discharges — a calculation that gauges patientactivity — climb 5.2 percengt from a year earlier. Growth within the health-care system and expense management “is the primary drivert why we’re above budget Guerin says. Carolinas HealthCare spentg morethan $106 million on capital projects in the firstf quarter.
Projects include new operating roomsat CMC-NorthEast and Carolinas Medicall Center, an expansion of CMC-Pineville, a new hospitaol at CMC-Lincoln and construction of health-care pavilionz in Steele Creek and Waxhaw, which will include free-standing emergency departments. Challenges in the coming monthe include managingthe system’s growing bad-debt and charity-cars costs, reducing interest expenses and preparing for a possiblee state cut in Medicaid funding, Gombar says. Bad-debg costs were 12 percent over budget duringt thefirst quarter, toppinfg $48 million in the first quarter. During the same period last bad debt wasabout $43 million.
The health-care system spentf more than $770 million in communityg carein 2008, including bad debt, charityg care and subsidizing Medicare and Medicaid. That equals 18.8 percenr of the health-care system’s net operatinvg revenue. ”It’s a trend everybody’s seeing acrossa the country,” Gombar says. “We can’ t control how many people are uninsured, how many peoplse show up at our door without insurance.” North Carolina’s budget woes coulxd results in a cut of up to 15 percenft for Medicaid.
That could equate to $36 million in annual losses forCarolinas “Medicaid cuts are the worst economic benefiyt cut the state can make,” Gombar says. “It’s Says Guerin: “It raises prices for thosw whodo pay. It makes no good businessx sense todo that.” Gombar says every dollar cut from Medicaixd eliminates $4 from the economy. Carolinas HealthCarer is the largest health-care system in the Carolinaw andthe third-largest public system in the The system owns, leases or manage s 25 hospitals. It has more than 40,00 full- and part-time employees.