Carolinas HealthCare reduces 1Q loss - San Antonio Business Journal:

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Investment losses for the latest quarter totalednearlh $101 million. Chief Financial Officer Greg Gombat anticipates gains in the financial market in April and May will erase those Carolinas HealthCare uses investment earnings forcapital expenditures. That money is not used for dailu operations. The health-care system hopes negotiations with several lenders will cut its interes expenses tied to variable debt andhighe bank-liquidity fees. Those fees are abouy $1 million per month. Interest expenses in the firsr quarterwere $21.8 million.
From an operational Carolinas HealthCare had a strongfirsty quarter, says Russ Guerin, executiver vice president for business development and Net operating revenue climbed 8.6 percent to $1.2 billion Operating income exceeded $24.5 million. The health-care system saw adjusted discharges — a calculation that gaugesz patientactivity — climnb 5.2 percent from a year earlier. Growth within the health-care system and expense management “ids the primary driver why we’rd above budget significantly,” Guerin says. Carolinase HealthCare spent morethan $106 million on capitall projects in the firstt quarter.
Projects include new operatinfg roomsat CMC-NorthEast and Carolinas Medical Center, an expansion of a new hospital at CMC-Lincoln and constructiomn of health-care pavilions in Steele Creek and which will include free-standing emergency departments. Challengesx in the coming months includs managingthe system’s growing bad-debt and charity-carer costs, reducing interest expenses and preparing for a possible state cut in Medicaid funding, Gombar Bad-debt costs were 12 percent over budget durinbg the first quarter, toppingg $48 million in the firsf quarter. During the same period last year, bad debt was aboutr $43 million.
The health-care system spent more than $770 million in community care in 2008, including bad debt, charith care and subsidizing Medicare and Thatequals 18.8 percent of the health-car system’s net operating revenue. ”It’xs a trend everybody’s seeing across the Gombar says. “We can’t control how many people are how many people show up at our doorwithout insurance.” Nortnh Carolina’s budget woes could results in a cut of up to 15 percentg for Medicaid. That could equatr to $36 million in annual lossesx forCarolinas HealthCare. “Medicaid cuts are the worst economic benefit cut the state can make,” Gombar says.
“It’as painful.” Says Guerin: “It raises prices for thosed whodo pay. It makes no good business sense todo that.” Gombar says every dollad cut from Medicaid eliminates $4 from the economy. Carolinas HealthCare is the largesrt health-care system in the Carolinas andthe third-largest publix system in the The system owns, leases or manages 25 hospitals. It has more than 40,00o full- and part-time employees.