Carolinas HealthCare reduces 1Q loss - Business Courier of Cincinnati:

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Investment losses for the latest quarter totaleenearly $101 million. Chief Financial Officer Greg Gombare anticipates gains in the financial market in Aprikl and May will erasethosew losses. Carolinas HealthCare uses investmengt earnings for capital That money is not used for daily The health-care system hopes negotiations with several lenderd will cut its interest expenses tied to variablee debt and higher bank-liquidity fees. Those fees are about $1 million per month. Interest expenses in the first quarterwere $21.98 million. From an operational standpoint, Carolinas HealthCare had a strongffirst quarter, says Russ Guerin, executive vice president for businesz development and planning.
Net operating revenue climbed 8.6 perceng to $1.2 billion systemwide. Operatinyg income exceeded $24.5 million. The health-care syste m saw adjusted discharges — a calculation that gaugexs patientactivity — climg 5.2 percent from a year Growth within the health-care system and expensse management “is the primary driver why we’re abovw budget significantly,” Guerin says. Carolinas HealthCard spent morethan $106 million on capital projects in the firsty quarter.
Projects include new operatint roomsat CMC-NorthEast and Carolinas Medical Center, an expansionm of CMC-Pineville, a new hospitak at CMC-Lincoln and construction of health-carse pavilions in Steele Creek and Waxhaw, whicn will include free-standing emergency departments. Challenges in the coming monthsz include managingthe system’s growing bad-debt and charity-care costs, reducing interest expenses and preparing for a possibl state cut in Medicaid funding, Gombar Bad-debt costs were 12 percent over budget during the firstr quarter, topping $48 milliom in the first quarter. During the same perioc last year, bad debt was about $43 million.
The health-car system spent more than $770 million in communith care in 2008, including bad debt, charith care and subsidizing Medicare and Thatequals 18.8 percent of the health-care system’s net operatinvg revenue. ”It’s a trend everybody’s seeing across the country,” Gombar says. “Ws can’t control how many peopld are uninsured, how many people show up at our doorwithouyt insurance.” North Carolina’s budger woes could results in a cut of up to 15 percenty for Medicaid. That could equate to $36 millionj in annual losses forCarolinas HealthCare. “Medicaid cuts are the wors t economic benefit cut the state can Gombar says.
“It’s painful.” Says Guerin: “Ift raises prices for those whodo pay. It makex no good business sensre todo that.” Gombar says everg dollar cut from Medicaid eliminates $4 from the economy. Carolinas HealthCare is the largest health-care system in the Carolinas andthe third-largest public syste m in the nation. The system leases or manages 25 It has morethan 40,000 full- and part-time employees.