Wednesday, March 11, 2015
Carolinas HealthCare System's initial financial projections of a shortfall in fiscal 2014 went unfounded as the Charlotte health-care system netted $450.3 million across its footprint.
That's a 18 percent decline from its $548.4 million total in 2013, driven by continued external pressures such as declining reimbursement rates for health-care services. But increased growth in the system's patient base and rising demand for services and helped offset those challenges, Greg Gombar, chief financial officer, said Tuesday at the quarterly meeting of the system's board of commissioners.
For example, the Levine Cancer Institute saw a 21 percent jump in new patient visits, while Sanger Heart & Vascular Institute saw a 17.5 percent increase in the number of invasive procedures it performed.
"The common theme with all the growth is more patients are choosing Carolinas HealthCare," Gombar says.
The Charlotte-based health-care system owns, leases or manages 39 hospitals in the Carolinas. It also operates a network of locations that include free-standing emergency departments, physician practices, nursing homes, and surgical and rehabilitation centers.
Carolinas HealthCare says its net operating revenue grew 8.3 percent to nearly $8.5 billion in 2014. That's up from less than $7.9 billion in 2013.
But operating income jumped 233 percent to $260.9 million. That's up from $78.4 million the previous year.
The operating results were "dramatically different" than initial forecasts for fiscal 2014, which accounted for no expansion of Medicaid and cuts to Medicare reimbursement.
Those pressures were felt as expected, says Joe Piemont, chief operating officer.
But the system saw increased volumes of patients, including emergency department visits, observation cases and outpatient surgical procedures. Patient visits to physician practices rose 9 percent.
The bottom line also received a boost as extensions were offered for patients to buy insurance through Obamacare, Piemont says.
The health-care system's own co-branded offering with insurer Coventry covered nearly 40,000 individuals in 2014.
The health-care system forecasts that its operating margins will be less than 2 percent for 2015.
"In dollar terms, it looks like a lot, but there's not a lot of cushion," Piemont says.
Carolinas HealthCare spent $598 million on capital projects in 2014, down 13.3 percent from a year earlier.
The system wrapped up major construction projects that included the Mindy Ellen Levine Behavioral Health Campus in Davidson and Carolinas HealthCare System Anson, as well as free-standing emergency departments in SouthPark and Harrisburg.
Carolinas HealthCare says it will work to boost the utilization of its existing facilities. That could mean expanding the hours of operation at some facilities or finding ways to reduce wait times for services without investing in new or expanded facilities.
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