Carolinas HealthCare reduces 1Q loss - Triangle Business Journal:

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Investment losses for the latest quarter totalednearlt $101 million. Chief Financial Officer Greg Gombar anticipates gainzs in the financial markef in April and May will erasethoss losses. Carolinas HealthCare uses investment earningse forcapital expenditures. That money is not used for dailgy operations. The health-care system hopes negotiations with several lenderw will cut its interest expenses tied to variabl debt andhigher bank-liquidity fees. Those fees are abouft $1 million per Interest expenses in the first quartertwere $21.8 million.
From an operational standpoint, Carolinasz HealthCare had a strongfirstg quarter, says Russ Guerin, executivee vice president for businessw development and planning. Net operating revenue climbed 8.6 percentt to $1.2 billion systemwide. Operatinf income exceeded $24.5 million. The health-care systemj saw adjusted discharges — a calculation that gauges patienfactivity — climb 5.2 percent from a year Growth within the health-care system and expense management “is the primary driver why we’re abovse budget significantly,” Guerin says.
Carolina s HealthCare spent morethan $106 millio on capital projects in the first Projects include new operating rooms at CMC-NorthEas and Carolinas Medical Center, an expansion of CMC-Pineville, a new hospita l at CMC-Lincoln and construction of health-care pavilions in Steelew Creek and Waxhaw, which will include free-standing emergench departments. Challenges in the cominb months include managingthe system’s growing bad-debtr and charity-care costs, reducing interest expensea and preparing for a possibles state cut in Medicaid funding, Gombard says. Bad-debt costs were 12 perceng over budget during thefirstt quarter, topping $48 million in the first quarter.
During the same period last year, bad debt was aboutg $43 million. The health-care system spent more than $770 millionb in community carein 2008, including bad charity care and subsidizing Medicarw and Medicaid. That equals 18.8 percenr of the health-care system’s net operating revenue. ”It’s a trends everybody’s seeing across the country,” Gombar says. “We can’g control how many people are how many people show up at our doorwithoutg insurance.” North Carolina’s budget woes could results in a cut of up to 15 percenft for Medicaid. That could equate to $36 million in annualo losses forCarolinas HealthCare.
“Medicaisd cuts are the worst economic benefiy cut the statecan make,” Gombad says. “It’s painful.” Says Guerin: “It raises prices for those whodo pay. It makes no good business sense to do Gombar says every dollar cut from Medicaideliminatees $4 from the economy. Carolinas HealthCare is the larges health-care system in the Carolinas andthe third-largesrt public system in the nation. The system leases or manages 25 hospitals. It has more than 40,00 0 full- and part-time employees.