After running an operating deficit in the first quarter of 2014 and announcing cuts of $110 million for the 2015 budget in September, Carolinas HealthCare System CEO Michael Tarwater shared a more positive outlook Tuesday at the system’s final quarterly board meeting of the year.
For the first nine months of the year, the system, which includes 40 hospitals in the Carolinas and Georgia, reported $199 million operating income on $6.3 billion revenue, and net revenue of $346 million for the first nine months of the year. The system’s Charlotte-area facilities reported $146 million operating income on $3.6 billion revenue, and net revenue of $225 million.
“We know that results for 2014 are in fact going to be much better than budgeted,” Tarwater said. “Things improved substantially as the year went on.
“Having said that,” he added, “ the overall picture for future planning remains cloudy. There are still a lot of potential landmines out there.”
Among the looming problems Tarwater named are reimbursement cuts in government health programs – Medicare for the elderly and disabled and Medicaid for low-income and disabled residents. He also mentioned the continued refusal by North Carolina and South Carolina lawmakers to expand Medicaid eligibility to cover healthy low-income adults as allowed by the Affordable Care Act.
Despite the expansion of insurance under that federal law, Tarwater said many patients covered by high deductible plans with high co-pays are unable to cover their out-of-pocket costs for health care.
The increase in patients who signed up for insurance under the federal exchange helped improve the hospital system’s bottom line in the second and third quarters, said CHS President Joe Piemont. He also credited the system’s improved mid-year financial picture to keeping a “sharper eye on expense control” and to its “deliberate” expansion of facilities and services that bring in revenue and take “care to where our patients are.”
In other business, the board honored George Battle Jr. for his 24 years as “a hardworking ambassador of Carolinas HealthCare System.” He has served on the board of commissioners since 1992 and is retiring at the end of the year. He was named a board member emeritus and will remain on the separate Carolinas HealthCare Foundation board.
Battle, who is senior bishop of the AME Zion Church, recalled the days when hospitals in Charlotte were segregated.
“You don’t know how it used to be,” he said. “This is the best hospital in Charlotte. This is the best hospital in the country. Quote me on that. … People come from around the world to come to this hospital.”