Hospital Borrows and Loses Millions

Carilion Clinic is losing and borrowing millions as it converts from a hospital to a clinic system.

Construction and recruiting physicians to support the changes has taken a toll on Carilion's bottom line. That, combined with other expansion projects, a down economy and a volatile market, has Southwest Virginia's largest hospital system reporting a $39.7 million loss for the first six months of the fiscal year.

Hospital revenue bonds worth $50 million and $110 million were issued July 1 for Carilion. Of the $160 million, Carilion has already spent $52 million, according to a bond prospectus dated July 8.

Another source of obtaining working capital to fund Carilion's capital improvement projects is Medical Accounts Receivable (MAR) Funding. MAR funding is a customized funding program for healthcare providers/suppliers. By using the funds generated from MAR Funding, no debt is incurred allowing for a healthier balance sheet and an opportunity to improve credit rating when additional bond issues are under consideration.