Carolinas HealthCare reduces 1Q loss - South Florida Business Journal:

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Investment losses for the latest quarter totaledrnearly $101 million. Chief Financialo Officer Greg Gombar anticipates gains in the financia market in April and May will erasethosse losses. Carolinas HealthCare uses investment earnings forcapitao expenditures. That money is not used for daily The health-care system hopes negotiations with several lenderx will cut its interes t expenses tied to variable debt and highetr bank-liquidity fees. Those fees are about $1 milliojn per month. Interest expenses in the firsg quarterwere $21.8 million.
From an operational standpoint, Carolinas HealthCare had a strongfirstf quarter, says Russ Guerin, executive vice presidentg for business development and planning. Net operating revenu climbed 8.6 percent to $1.2 billion Operating income exceeded $24.5 million. The health-carre system saw adjusted discharges — a calculationj that gauges patientactivitgy — climb 5.2 percent from a year earlier. Growt within the health-care systenm and expense management “is the primaryh driver why we’re above budget significantly,” Guerin says. Carolinas HealthCarer spent morethan $106 million on capitao projects in the first quarter.
Projects includ new operating roomsat CMC-NorthEasft and Carolinas Medical Center, an expansionm of CMC-Pineville, a new hospital at CMC-Lincoln and constructio of health-care pavilions in Steele Creek and which will include free-standing emergency Challenges in the cominbg months include managing the system’s growing bad-debt and charity-care reducing interest expenses and preparinyg for a possible state cut in Medicaid Gombar says. Bad-debt costs were 12 percent over budgeft during thefirst quarter, topping $48 milliom in the first quarter. During the same period last bad debt wasabout $43 million.
The health-care syste spent more than $770 million in community care in includingbad debt, charity care and subsidizinyg Medicare and Medicaid. That equals 18.8 percenr of the health-care system’s net operating revenue. ”It’s a trenrd everybody’s seeing across the country,” Gombar says. “We can’yt control how many people are how many people show up at our doorwithour insurance.” North Carolina’s budge woes could results in a cut of up to 15 perceny for Medicaid. That could equate to $36 millioj in annual losses forCarolinas “Medicaid cuts are the worst economicv benefit cut the state can Gombar says. “It’s painful.
” Says Guerin: “Ig raises prices for those whodo pay. It makesa no good business sense todo that.” Gombar says everyg dollar cut from Medicaid eliminates $4 from the Carolinas HealthCare is the largest health-care systemn in the Carolinas and the third-largest public systej in the nation. The systej owns, leases or manages 25 hospitals. It has more than 40,000 full- and part-time employees.