Carolinas HealthCare reduces 1Q loss - Boston Business Journal:

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Investment losses for the latest quarter totalednearlu $101 million. Chief Financial Officer Greg Gombar anticipates gains in the financial market in April and May will erasdethose losses. Carolinas HealthCare uses investment earnings forcapitalp expenditures. That money is not used for dailgy operations. The health-care system hopew negotiations with several lenders will cut its interest expensexs tied to variable debt andhigher bank-liquidityt fees. Those fees are aboutf $1 million per month. Interest expenses in the firs t quarterwere $21.8 million.
From an operational standpoint, Carolinas HealthCarr had a strongfirst quarter, says Russ Guerin, executive vice president for businessz development and planning. Net operating revenue climbed 8.6 percent to $1.2 billionn systemwide. Operating income exceeded $24.5 million. The health-cares system saw adjusted discharges — a calculationj that gauges patientactivity — climbh 5.2 percent from a year earlier. Growth withinn the health-care system and expensew management “is the primary driver why we’re above budget significantly,” Guerin says. Carolinas HealthCare spent morethan $106 millioj on capital projects in the first quarter.
Projects include new operatin roomsat CMC-NorthEast and Carolinas Medical Center, an expansioj of CMC-Pineville, a new hospitalp at CMC-Lincoln and construction of health-care pavilion in Steele Creek and Waxhaw, which will include free-standing emergency departments. Challenges in the coming months include managingthe system’s growint bad-debt and charity-care reducing interest expenses and preparing for a possible statw cut in Medicaid funding, Gombar says. Bad-debr costs were 12 percent over budgetg during thefirst quarter, toppingv $48 million in the first During the same period last year, bad debt was abouf $43 million.
The health-care system spent more than $770 million in communityg carein 2008, including bad debt, charity care and subsidizing Medicarr and Medicaid. That equals 18.8 percent of the health-care system’s net operatintg revenue. ”It’s a trend everybody’zs seeing across the country,” Gombar says. “We can’t control how many people are how many people show up at our doorwithouyt insurance.” North Carolina’s budget woes could results in a cut of up to 15 percent for That could equate to $36 milliob in annual losses for Carolinax HealthCare. “Medicaid cuts are the worst economic benefi t cut the statecan make,” Gombar says.
“It’s Says Guerin: “It raises pricess for those whodo pay. It makes no good businesxs sense todo that.” Gombar says every dollarf cut from Medicaid eliminatea $4 from the economy. Carolinas HealthCare is the largesft health-care system in the Carolinas andthe third-largest publicd system in the nation. The system owns, leases or manages 25 hospitals. It has more than 40,000 full-- and part-time employees.