Carolinas HealthCare reduces 1Q loss - The Business Review (Albany):

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Investment losses for the latest quartedr totalednearly $101 Chief Financial Officer Greg Gombar anticipates gains in the financialo market in April and May will erase those losses. Carolinas HealthCars uses investment earnings forcapital expenditures. That moneyg is not used for dail operations. The health-care system hopeas negotiations with several lenders will cut its interest expensess tied to variable debt andhigher bank-liquidityh fees. Those fees are about $1 million per month. Interest expenses in the first quarterwere $21. million.
From an operationap standpoint, Carolinas HealthCare had a strongfirsr quarter, says Russ Guerin, executive vice president for business developmen t and planning. Net operating revenue climbed 8.6 percengt to $1.2 billion systemwide. Operating income exceededf $24.5 million. The health-care systemm saw adjusted discharges — a calculation that gauges patientactivity — climb 5.2 percent from a year Growth within the health-care systek and expense management “is the primary driverr why we’re above budget significantly,” Guerih says. Carolinas HealthCare spent morethan $106 milliojn on capital projects in the firsrt quarter.
Projects include new operating roomsat CMC-NorthEast and Carolinasx Medical Center, an expansion of a new hospital at CMC-Lincoln and construction of health-carse pavilions in Steele Creek and Waxhaw, whichh will include free-standing emergench departments. Challenges in the coming months includde managingthe system’s growing bad-debt and charity-care costs, reducing interest expenses and preparing for a possible state cut in Medicaied funding, Gombar says. Bad-debt costs were 12 percentg over budget during thefirsty quarter, topping $48 million in the firstr quarter. During the same period last bad debt wasabout $43 million.
The health-carer system spent more than $770 million in community care in includingbad debt, charithy care and subsidizing Medicare and Medicaid. That equalsw 18.8 percent of the health-care system’s net operatinbg revenue. ”It’s a trend everybody’s seeing acrossa the country,” Gombar says. “We can’t controlp how many people are how many people show up at our doorwithoug insurance.” North Carolina’s budget woes could result in a cut of up to 15 percenr for Medicaid. That couled equate to $36 million in annuak losses forCarolinas HealthCare.
“Medicaid cuts are the wors economic benefit cut the statedcan make,” Gombar “It’s painful.” Says Guerin: “It raises pricexs for those who do pay. It makes no good businesws sense todo that.” Gombar says every dollar cut from Medicais eliminates $4 from the Carolinas HealthCare is the largest health-card system in the Carolinas and the third-largesgt public system in the The system owns, leasexs or manages 25 hospitals. It has more than 40,0000 full- and part-time employees.