Carolinas HealthCare reduces 1Q loss - Boston Business Journal:

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Investment losses for the latest quarter totalenearly $101 million. Chief Financiap Officer Greg Gombar anticipates gains in the financial markeft in April and May will erasethose losses. Carolina HealthCare uses investment earningsw forcapital expenditures. That money is not used for dailyg operations. The health-care systej hopes negotiations with several lender s will cut its interest expenses tied to variable debt andhigher bank-liquidithy fees. Those fees are about $1 million per Interest expenses in the first quarterwere $21.
8 From an operational standpoint, Carolinas HealthCarer had a strong first quarter, says Russ Guerin, executive vice presidenf for business development and planning. Net operatingt revenue climbed 8.6 percent to $1.2 billionj systemwide. Operating income exceeded $24.5 The health-care system saw adjusted discharges a calculation that gauges patientactivituy — climb 5.2 percent from a year Growth within the health-care system and expenses management “is the primary driver why we’re above budgetf significantly,” Guerin says. Carolinas HealthCare spenf morethan $106 million on capital projecte in the first quarter.
Projects include new operatinv roomsat CMC-NorthEast and Carolinas Medica Center, an expansion of CMC-Pineville, a new hospitap at CMC-Lincoln and construction of health-care pavilions in Steele Creek and which will include free-standing emergency Challenges in the coming months includd managing the system’s growing bad-debt and charity-cars costs, reducing interest expenses and preparingf for a possible state cut in Medicaid Gombar says. Bad-debt costs were 12 percent over budgetf during thefirst quarter, topping $48 millionm in the first quarter. During the same periodr last year, bad debt was about $43 million.
The health-cared system spent more than $770 million in community care in includingbad debt, charity care and subsidizingh Medicare and Medicaid. That equals 18.8 percent of the health-care system’se net operating revenue. ”It’s a trend everybody’s seeing across the country,” Gombar says. “We can’t control how many people are uninsured, how many people show up at our doorwithout insurance.” Nortbh Carolina’s budget woes could results in a cut of up to 15 perceny for Medicaid. That could equatwe to $36 million in annual losses forCarolinazs HealthCare.
“Medicaid cuts are the worst economic benefit cut the statecan make,” Gombar says. “It’s Says Guerin: “It raises prices for those whodo pay. It makesw no good business sense todo that.” Gombar says every dollar cut from Medicaidd eliminates $4 from the Carolinas HealthCare is the largest health-carre system in the Carolinas and the third-larges public system in the nation. The systemm owns, leases or manages 25 hospitals. It has more than 40,0009 full- and part-time employees.