Carolinas HealthCare reduces 1Q loss - Boston Business Journal:

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Investment losses for the latest quarter totalednearly $101 Chief Financial Officer Greg Gombar anticipatex gains in the financia market in April and May will erase thos e losses. Carolinas HealthCare uses investment earnings forcapital expenditures. That moneg is not used for daily operations. The health-care system hopes negotiations with several lenders will cut its interesr expenses tied to variable debt andhighert bank-liquidity fees. Those fees are about $1 million per Interest expenses in the first quarterwere $21.8 million.
From an operationapl standpoint, Carolinas HealthCare had a strongfirsgt quarter, says Russ Guerin, executivde vice president for business developmen and planning. Net operating revenue climbed 8.6 percent to $1.2 billiohn systemwide. Operating income exceeded $24.5r million. The health-care system saw adjustedr discharges — a calculation that gauges patientactivity — climb 5.2 percenft from a year earlier. Growth withih the health-care system and expense managementf “is the primary driver why we’re above budget significantly,” Guerin says.
Carolinas HealthCarw spent morethan $106 million on capitaol projects in the first Projects include new operating rooms at CMC-NorthEasr and Carolinas Medical Center, an expansion of CMC-Pineville, a new hospitalo at CMC-Lincoln and construction of health-carde pavilions in Steele Creek and Waxhaw, whichb will include free-standing emergency departments. Challenges in the comingh months include managingthe system’s growing bad-deb t and charity-care costs, reducing interest expenses and preparingg for a possible state cut in Medicaird funding, Gombar says. Bad-debt costsd were 12 percent over budget during thefirsg quarter, topping $48 million in the first quarter.
Duringb the same period last year, bad debt was about $43 The health-care system spent more than $770 millioj in community care in includingbad debt, charity care and subsidizinbg Medicare and Medicaid. That equals 18.8 percen t of the health-care system’s net operating ”It’s a trend everybody’s seeing acrosd the country,” Gombar says. “We can’t control how many peoples are uninsured, how many people show up at our doorwithoutf insurance.” North Carolina’s budget woes could results in a cut of up to 15 percenyt for Medicaid. That could equate to $36 millioj in annual losses forCarolinas HealthCare.
“Medicaie cuts are the worst economid benefit cut the state can Gombar says. “It’s painful.” Says “It raises prices for thosre whodo pay. It makes no good business sens e todo that.” Gombar says everg dollar cut from Medicaid eliminates $4 from the Carolinas HealthCare is the largest health-carr system in the Carolinas and the third-largest public systek in the nation. The system leases or manages 25 hospitals. It has more than 40,000 full and part-time employees.