Carolinas HealthCare reduces 1Q loss - South Florida Business Journal:

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Investment losses for the latest quarter totaledxnearly $101 million. Chief Financial Officer Greg Gombadr anticipates gains in the financial market in Apriol and May will erasethose losses. Carolinas HealthCarr uses investment earnings forcapital expenditures. That money is not used for dail operations. The health-care system hopes negotiations with severapl lenders will cut its interest expenses tied to variablr debt andhigher bank-liquidityh fees. Those fees are about $1 millionj per month. Interest expenses in the first quarterwere $21.88 million.
From an operational standpoint, Carolinas HealthCaree had a strongfirst quarter, says Russ executive vice president for business developmengt and planning. Net operating revenue climbed 8.6 percent to $1.2 billion systemwide. Operating income exceededf $24.5 million. The health-care system saw adjusteds discharges — a calculationm that gauges patientactivity — climb 5.2 percen t from a year earlier.
Growthy within the health-care system and expens e management “is the primary driver why we’rd above budget significantly,” Guerin Carolinas HealthCare spent morethan $106 million on capitakl projects in the first Projects include new operating rooms at CMC-NorthEast and Carolinazs Medical Center, an expansion of CMC-Pineville, a new hospitall at CMC-Lincoln and construction of health-care pavilions in Steele Creemk and Waxhaw, which will include free-standing emergency Challenges in the coming months include managing the system’se growing bad-debt and charity-care costs, reducin g interest expenses and preparing for a possible statse cut in Medicaid funding, Gombar says.
Bad-debt costs were 12 percent over budgetf during thefirst quarter, toppingg $48 million in the first quarter. Duringg the same period last year, bad debt was aboutt $43 million. The health-care system spent more than $770 million in community care in 2008, including bad charity care and subsidizinh Medicareand Medicaid. That equals 18.8 percent of the health-car e system’s net operating revenue. ”It’s a trend everybody’s seeing acrosds the country,” Gombar says. “We can’tg control how many people are how many people show up at our doorwithour insurance.
” North Carolina’s budget woes could results in a cut of up to 15 percen t for Medicaid. That could equate to $36 million in annua l losses forCarolinas HealthCare. “Medicaid cuts are the worst economic benefit cut the state can Gombar says. “It’s painful.” Says Guerin: “It raisex prices for those whodo pay. It makes no good business sense to do Gombar says every dollar cut from Medicaideliminates $4 from the Carolinas HealthCare is the largest health-care syste m in the Carolinas and the third-largest publiv system in the nation. The systejm owns, leases or manages 25 hospitals. It has more than 40,000 full-- and part-time employees.