published Monday, February 14th, 2011

Hutcheson's reticence prompts official complaint


by Emily Bregel

CORPORATE STRUCTURE

Hutcheson Medical Center, a publicly owned community hospital, is governed by the boards of five entities.

* Hutcheson Medical Center Inc.: A private, nonprofit company that leases the building and operates the hospital.

* Hospital Authority of Walker, Dade and Catoosa Counties: Owns the hospital building and oversees the lease. Its nine-person board is appointed by county commissioners.

* Hutcheson Medical Division: For-profit sister company to Hutcheson Medical Center operates medical offices and practices. Its board oversees Hutcheson's clinics.

* Hutcheson Health Enterprises: Nonprofit parent company of Hutcheson Medical Center and Hutcheson Medical Division.

* Hutcheson Health Foundation: Nonprofit fundraising foundation for the hospital.

Hutcheson Medical Center's resistance to open records laws has irked county commissioners and trustees of the Hospital Authority of Dade, Catoosa and Walker Counties.

Commissioners have said the publicly appointed hospital authority board, which oversees operations of hospital operator Hutcheson Medical Center Inc., have been kept in the dark about important financial information.

The Georgia Attorney General's office confirmed that the authority's new financial adviser, Ed Wall, filed a complaint in December with the Georgia Attorney General's office because of his difficulty getting financial documents from HMC through open records requests. The complaint shows Hutcheson tried to charge Wall $1,000 for retrieving public documents.

Financial data about Hutcheson that had been discussed only behind closed doors has trickled out over the past few months.

Hutcheson lost more than $7 million in both fiscal 2009 and 2010, according to unaudited financial statements and officials.

In this fiscal year, which began Oct. 1, the hospital has lost on average $1 million every month.

As of two weeks ago, Hutcheson had only 12 to 15 days of liquid cash on hand, Chief Financial Officer Gerald Faircloth said at a hospital authority board meeting last month. That doesn't count $10 million in frozen capital assets that could not be used for operating expenditures anyway.

The hospital has not released audited financial statements from fiscal 2009 and 2010.

At their Jan. 27 quarterly meeting, hospital authority board members voted to create a collaborative transition committee that would be involved in the Erlanger Health System partnership discussions, giving the trustees a voice in the negotiations.

Trustees of the hospital authority have not yet seen a copy of a draft proposal submitted to Hutcheson's administration by Erlanger.

At the meeting, Hutcheson officials and trustees debated whether finances should be discussed in closed session. Hospital authority trustees pushed for more transparency.

Ultimately, legal counsel for the hospital authority and Aston & Bird attorney Glenn Thomson, who represents Hutcheson Medical Center Inc., agreed that financial information must be discussed in an open session.

"We need to be doing our business in the light of day," trustee Steven Ellis said.

More: Clock ticks for Hutcheson as hospital's losses mount

about Emily Bregel...

Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...

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