CARTI Reports Bigger Loss Than Expected

by Arkansas Business Staff  on Monday, Mar. 20, 2017 12:00 am  

The CARTI Cancer Center in Little Rock. (Ken West)

As CARTI works through its financial issues, the Little Rock cancer treatment organization recently posted wider than anticipated losses for the first two quarters of its fiscal year.

CARTI reported a loss of $5.7 million when it budgeted a loss of $2.5 million for the first half of its fiscal year — that is, July through December 2016. Its net patient revenue was $180.5 million when it had expected $185.3 million, according to its financial statement on file with the Electronic Municipal Market Access system.

One of its biggest increases in expenses was the cost of oncology drugs. That expenditure totaled $46.2 million for the two quarters, $2.4 million more than CARTI budgeted.

“Like many in health care, CARTI has definitely felt the cuts in federal reimbursements, impacts from insurance plan changes as well as the rising cost of delivering care for our patients, including the cost of chemo drugs,” CARTI spokeswoman Alison Melson said in an email to Whispers.

In addition, the number of patients CARTI treated in the second quarter was “unseasonably low,” Melson said. But she said those numbers were better in the current quarter.

CARTI is continuing to work with management consultant Berkeley Research Group of Emeryville, California, to find ways to save money. “As an example, we are currently looking at bids from various group purchasing organizations that will help us in savings across the board on everything from office supplies to medical supplies,” she said.

CARTI was forced to hire BRG after reporting an operating loss of $13.8 million for the fiscal year that ended June 30. As a result, the nonprofit failed to maintain the required coverage ratio on the $49 million bond issue that was used to build its four-story center, which opened in November 2015. Meanwhile, CARTI continues the search for a CEO to replace Jan Burford, who retired in February after serving as president and CEO for more than 26 years.

CARTI hired Witt/Kieffer of Oak Brook, Illinois, a leading health care executive search firm, to find a CEO. Melson said that earlier this month the firm spent a few days with CARTI’s board, physicians and senior leadership “to perform an on-site assessment of CARTI’s specific needs and what we are looking for in a CEO.”

Craig Comish, the current chief operations officer, has been named interim CEO.

 

 

Please read our comments policy before commenting.
Search