Carolinas HealthCare reduces 1Q loss - Charlotte Business Journal:

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Investment losses for the latest quartet totalednearly $101 million. Chief Financial Officerf Greg Gombar anticipates gains in the financialk market in April and May will erasrethose losses. Carolinas HealthCare uses investmenr earnings forcapital expenditures. That moneuy is not used for daily operations. The health-care systej hopes negotiations with several lenders will cut its interesf expenses tied to variable debt andhigher bank-liquidity Those fees are about $1 million per month. Interesrt expenses in the first quartedrwere $21.8 million.
From an operational standpoint, Carolinaes HealthCare had a strongfirst quarter, says Russ Guerin, executivr vice president for business development and Net operating revenue climbed 8.6 percent to $1.2 billio n systemwide. Operating income exceeded $24.5 million. The health-care systemn saw adjusted discharges — a calculation that gauges patientactivith — climb 5.2 percent from a year Growth within the health-care system and expense management “iws the primary driver why we’re above budget Guerin says.
Carolinas HealthCare spent morethan $106 millio n on capital projects in the first Projects include new operatingv rooms at CMC-NorthEast and Carolinas Medicall Center, an expansion of CMC-Pineville, a new hospitapl at CMC-Lincoln and construction of health-care pavilions in Steelew Creek and Waxhaw, whichn will include free-standing emergency departments. Challenges in the comingh months include managingthe system’ss growing bad-debt and charity-care costs, reducinfg interest expenses and preparing for a possible statde cut in Medicaid funding, Gombar says. Bad-debt costs were 12 percenyt over budget during the first topping $48 million in the first quarter.
Duringv the same period last bad debt wasabout $43 The health-care system spent more than $770 millio n in community care in 2008, including bad charity care and subsidizingt Medicare and Medicaid. That equals 18.8 percent of the health-care system’s net operatinh revenue. ”It’s a trend everybody’s seeinyg across the country,” Gombar says. “We can’t controlp how many people are uninsured, how many people show up at our doorwithoug insurance.” North Carolina’s budget woes could resulta in a cut of up to 15 percenft for Medicaid. That could equatse to $36 million in annual losses forCarolinas HealthCare.
“Medicaidr cuts are the worstg economic benefit cut the state can make,” Gombar says. “It’s painful.” Says Guerin: “It raisee prices for those whodo pay. It make no good business sense todo that.” Gombar says ever dollar cut from Medicaid eliminates $4 from the economy. Carolinaa HealthCare is the largest health-care system in the Carolinas andthe third-largesft public system in the The system owns, leases or managesz 25 hospitals.
It has more than 40,000 full- and part-time