Carolinas HealthCare reduces 1Q loss - Triangle Business Journal:

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Investment losses for the latest quarter totalerdnearly $101 million. Chief Financiak Officer Greg Gombar anticipates gainsx in the financial market in April and May will erasethosew losses. Carolinas HealthCare uses investment earnings for capital That money is not used fordaily operations. The health-caree system hopes negotiations with severap lenders will cut its interest expenses tied to variable debt andhigher bank-liquidity fees. Those fees are abouty $1 million per month. Interest expenses in the first quarterwere $21.78 million.
From an operational standpoint, Carolinaes HealthCare had a strongfirst quarter, says Russ Guerin, executivre vice president for business development and planning. Net operatingv revenue climbed 8.6 percent to $1.2 billion systemwide. Operating incomew exceeded $24.5 million. The health-care system saw adjusted discharges a calculation that gauges patient activity climb 5.2 percent from a year earlier. Growth within the health-carw system and expense management “isd the primary driver why we’re above budget significantly,” Guerin says. Carolinasa HealthCare spent morethan $106 millioj on capital projects in the first quarter.
Projectxs include new operating roomsat CMC-NorthEast and Carolinas Medical Center, an expansion of CMC-Pineville, a new hospital at CMC-Lincol and construction of health-care pavilions in Steelse Creek and Waxhaw, which will includwe free-standing emergency departments. Challenges in the coming monthws include managingthe system’s growing bad-debt and charity-care reducing interest expenses and preparing for a possibler state cut in Medicaid funding, Gombar Bad-debt costs were 12 percent over budgett during the first quarter, topping $48 millioj in the first quarter.
During the same periods last year, bad debt was about $43 The health-care system spent more than $770 millionj in community carein 2008, including bad charity care and subsidizing Medicare and That equals 18.8 percent of the health-carde system’s net operating revenue. ”It’xs a trend everybody’s seeing across the Gombar says. “We can’t control how many people are how many people show up at our doorwithout insurance.” Nortb Carolina’s budget woes could resultss in a cut of up to 15 percenr for Medicaid. That could equate to $36 million in annualp losses forCarolinas HealthCare.
“Medicaid cuts are the worstg economic benefit cut the statecan make,” Gombar “It’s painful.” Says “It raises prices for those who do pay. It makes no good busineszs sense todo that.” Gombar says ever y dollar cut from Medicaisd eliminates $4 from the economy. Carolinas HealthCarwe is the largest health-care systekm in the Carolinas andthe third-largest public system in the nation. The system owns, leasesx or manages 25 hospitals. It has more than 40,00p0 full- and part-time employees.