published Tuesday, April 26th, 2011

Erlanger begins Hutcheson transition


by Chris Carroll
  • photo
    This is the campus of Hutcheson Medical Center in Fort Oglethorpe. Staff File Photo by Angela Lewis/Chattanooga Times Free Press

After numerous meetings and political delays, Erlanger Health System has been authorized to manage Hutcheson Medical Center, the Fort Oglethorpe hospital losing physicians, patients and $1 million a month.

Beyond that, what’s-next details are scant. Erlanger officials are expected to begin a 30-day transition period this week by developing a strategic plan with input from Hutcheson’s top brass.

“That’s really the first step,” Erlanger President and CEO Jim Brexler said Monday. “Can’t take many actions unless you’ve got plans.”

Hutcheson, which has been serving between 40 and 50 patients a day, employs about 800 people. The hospital announced 75 layoffs earlier this month, and officials have not said whether more will occur.

A late draft of the management agreement between the hospitals states that Erlanger and Hutcheson will “transition those employees for which there is no foreseeable need at the hospital.”

Erlanger is expected to gradually funnel up to $20 million in credit into Hutcheson. A $15 million physician recruitment plan is mentioned in a document summarizing the agreement, but officials said it’s a preliminary figure.

Separately, Erlanger’s Budget and Finance Committee held its monthly meeting Monday night where members approved a $350,000 “income guarantee” for an orthopedic surgeon.

Erlanger reported a $1 million profit and total admissions in March reached the highest level since August 2008, according to a financial statement distributed to committee members.

MARCH FINANCIALS - ERLANGER
  • March income: Gain of $1 million

  • Year-to-date income: Gain of $2.4 million

  • Last year, year-to-date income: Loss of $1.1 million

Source: Erlanger financial statements

Still, the hospital missed its budgeted monthly profits by about $700,000. Erlanger Chief Financial Officer Britt Tabor attributed the gap to more medical visits than surgical visits, which generate more revenue.

Paving the way for Erlanger, trustees from two operating boards at Hutcheson formalized their resignations Monday night, ceding operating power to the Hospital Authority of Walker, Dade and Catoosa Counties — a nine-member group of political appointees that owns the hospital building and oversees its lease.

Several Hospital Authority trustees blamed the other boards for mismanagement at Hutcheson. The Hospital Authority’s pro-Erlanger vote was contingent on replacing members from both operating boards with the Hospital Authority’s own trustees.

Contact staff writer Chris Carroll at ccarroll@timesfreepress.com or 423-757-6610.

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