Carolinas HealthCare reduces 1Q loss - Washington Business Journal:

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Investment losses for the latest quarter totalednearlhy $101 million. Chief Financial Office r Greg Gombar anticipates gains in the financial market in April and May will erasethosr losses. Carolinas HealthCare uses investment earningds forcapital expenditures. That moneg is not used for daily The health-care system hopes negotiations with severalp lenders will cut its interest expensez tied to variable debt and higher bank-liquidith fees. Those fees are about $1 millionb per month. Interest expenses in the firs quarterwere $21.8 million.
From an operationap standpoint, Carolinas HealthCare had a stronhgfirst quarter, says Russ executive vice president for business development and Net operating revenue climbed 8.6 percent to $1.2 billioh systemwide. Operating income exceedexd $24.5 million. The health-cars system saw adjusted discharges — a calculation that gaugeds patientactivity — climb 5.2 percent from a year Growth within the health-caree system and expense managementg “is the primary driver why we’re aboved budget significantly,” Guerin says. Carolinas HealthCaree spent morethan $106 million on capita l projects in the first quarter.
Projects include new operatintg roomsat CMC-NorthEast and Carolinas Medical Center, an expansiobn of CMC-Pineville, a new hospital at CMC-Lincoln and construction of health-carwe pavilions in Steele Creek and Waxhaw, which will include free-standinfg emergency departments. Challenges in the coming months include managingfthe system’s growing bad-debt and charity-care reducing interest expenses and preparing for a possible state cut in Medicaid funding, Gombar says. Bad-debt costs were 12 percenf over budget during thefirstr quarter, topping $48 million in the first quarter. During the same periord last year, bad debt was abour $43 million.
The health-care system spent more than $770 milliojn in community carein 2008, including bad charity care and subsidizing Medicare and Medicaid. That equalds 18.8 percent of the health-carde system’s net operating revenue. ”It’s a trend everybody’s seeing acrossw the country,” Gombar “We can’t control how many people are how many people show up at our doorwithoutf insurance.” North Carolina’s budget woes coulcd results in a cut of up to 15 perceny for Medicaid. That could equate to $36 millionj in annual losses forCarolinas HealthCare. “Medicaide cuts are the worst economic benefit cut the statwecan make,” Gombar says.
“It’xs painful.” Says Guerin: “It raises prices for thos e whodo pay. It makes no good business sense to do Gombar says every dollar cut from Medicaideliminate $4 from the economy. Carolinaes HealthCare is the largest health-care system in the Carolina s andthe third-largest public system in the The system owns, leased or manages 25 hospitals. It has more than 40,00p0 full- and part-time