Carolinas HealthCare System in Charlotte, N.C., hopes to cut its 2015 budget by $110 million, officials said at a board meeting yesterday, according to a report from The State.
The planned reduction accounts for 2.4 percent of the system's projected $4.6 billion annual revenue for the primary enterprise next year. Carolinas HealthCare has already cut more than 100 management positions — including two with paychecks of roughly $3 million — as part of its cost reduction initiative, according to the report. Joe Piedmont, the system's president, told The State most of the jobs that were eliminated were vacant or recently vacated. "A handful" of employees have been let go, according to the report.
Carolinas HealthCare CEO Michael Tarwater said the need to cut costs is partly driven by Medicare and Medicaid reimbursement cuts, in addition to North Carolina's decision not to expand its Medicaid program under the Patient Protection and Affordable Care Act. In the first quarter of 2014, the health system reported an operating loss of $5 million on $1.1 billion total revenue for the primary enterprise, although in the second quarter financial performance improved to $56 million in operating income on $2.4 billion in total revenue, according to the report.
More articles on health system finances:
CFO perspective: Finding savings in the annual operating budget
Lean management for cutting costs and a happier hospital
3 recent stories on nonprofit hospital finances