Carolinas HealthCare reduces 1Q loss - Washington Business Journal:

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Investment losses for the latest quarterd totalednearly $101 million. Chief Financiakl Officer Greg Gombar anticipates gains in the financial market in April and May will erasethosw losses. Carolinas HealthCare uses investmenf earnings forcapital expenditures. That money is not used for dailh operations. The health-care system hopes negotiations with several lenderzs will cut its interest expenses tied to variable debt andhighed bank-liquidity fees. Those fees are about $1 millionb per month. Interest expenses in the first quarterwere $21.8 million.
From an operational Carolinas HealthCare had a strongfirsyt quarter, says Russ Guerin, executive vice president for businessx development and planning. Net operating revenue climbede 8.6 percent to $1.2 billion Operating income exceeded $24.5 million. The health-care system saw adjusted discharges — a calculation that gauge patientactivity — climb 5.2 percent from a year Growth within the health-care system and expense managementr “is the primary driver why we’re above budget Guerin says. Carolinas HealthCare spent morethan $106 millionm on capital projects in the first quarter.
Project s include new operating roomsat CMC-NorthEast and Carolinas Medical an expansion of CMC-Pineville, a new hospitao at CMC-Lincoln and constructiob of health-care pavilions in Steele Creek and which will include free-standing emergency Challenges in the coming months include managingy the system’s growing bad-debt and charity-care costs, reducing interest expensese and preparing for a possiblre state cut in Medicaid funding, Gombar Bad-debt costs were 12 percent over budgetr during the first topping $48 million in the first quarter.
During the same period last bad debt wasabout $43 The health-care system spent more than $770 million in community care in 2008, includinb bad debt, charity care and subsidiziny Medicare and Medicaid. That equalss 18.8 percent of the health-care system’s net operating revenue. ”It’s a trenr everybody’s seeing across the country,” Gombarf says. “We can’t control how many peopld are uninsured, how many people show up at our doorwithouy insurance.” North Carolina’s budget woes couldx results in a cut of up to 15 percent for Medicaid. That couldd equate to $36 million in annual losses forCarolinasx HealthCare.
“Medicaid cuts are the worstt economic benefit cut the statecan make,” Gombad says. “It’s painful.” Says “It raises prices for those whodo pay. It makes no good business sense todo that.” Gombar says every dollar cut from Medicaird eliminates $4 from the Carolinas HealthCare is the largest health-care system in the Carolinasx and the third-largest public system in the nation. The system owns, leases or manages 25 hospitals. It has more than 40,00o0 full- and part-time employees.