Erlanger Health System President Jim Brexler will resign from Chattanooga’s biggest hospital within the next several weeks, the hospital said Friday in a surprise announcement.
Brexler, who began his health care career in 1975, reportedly agreed privately with trustees that it was time to go after seven years at Erlanger’s helm.
No stranger to controversy, he arrived in the midst of a federal investigation into conflicts of interest within the hospital’s contracting and hiring policies. The hospital eventually agreed to a $40 million settlement with regulators. He’s leaving after steering Erlanger through a recession and pushing it into expansion mode, building new facilities and taking over management of other entities.
But disagreements with trustees ultimately led to his departure, though specifics were hard to come by Friday.
“There was no straw that broke camel’s back, but there were a number of things,” said trustee Phyllis Miller.
The hospital declined to make Brexler available for comment.
Trustee Russell King said Brexler used his talents “to do some good things for Erlanger.”
However, “Erlanger is pressure-packed,” King noted. “The average length of service for a hospital CEO is five years. He was here for seven. This was his decision.”
His unexpected departure comes on the heels of Erlanger’s high-profile management takeover of troubled Hutcheson Medical Center. Though the Fort Oglethorpe hospital had hemorrhaged millions of dollars and dozens of North Georgia jobs, Brexler called the partnership “a very positive development” at the time.
His administration also came under fire for its handling of a dispute with its in-house security officers when Brexler made the decision to outsource their jobs to Chattanooga-based Walden Security.
“Jim was very strategic, a big thinker, but we need more of a tactician,” Miller said. “He has done some wonderful things for Erlanger, but there are some things that need to be done now that require a little different skill set — and Jim is ready to go.”
Kim White, secretary for the Chattanooga-Hamilton County Hospital Authority Board of Trustees, said Friday the board “accepted his resignation,” though she wouldn’t specify what circumstances prompted it.
“What the hospital needs and what he needs is going in two separate directions,” White said.
Trustees had never publicly brought up the issue of replacing Brexler, who was reportedly in good spirits at Thursday’s public board meeting.
At the meeting, trustees made no mention of Brexler’s imminent departure, adjourning after a mere 10 minutes following trustee Ron Loving’s unopposed election to the board’s chairmanship.
Still under discussion at the trustee level is Brexler’s 18-month severance clause. A buyout could cost the hospital more than $750,000.
But White said Brexler may continue to work for Erlanger in some capacity, either in a fundraising or consulting role.
“If we can use him in some way at the [Erlanger Health System Foundations], we may try to work out how we can move forward,” she said.
Brexler joined Erlanger as president and CEO in 2004, leaving his old job as vice chancellor of the Louisiana State University Health Sciences Center, where he had served since 1999. As Erlanger CEO, his base pay is $550,000 a year.
Brexler’s second in command, Charlesetta Woodard-Thompson, is vice president and chief operations officer but it’s unclear what her role will be after his departure. Trustees say they will conduct a national search for a replacement.
The news release announcing Brexler’s departure stated the CEO is retiring. The release also touted some of the highlights of his tenure.
The hospital has maintained a strong affiliation with the University of Tennessee College of Medicine at Chattanooga, opened a new hospital branch on Volkswagen Drive, and maintained its A3 bond rating, the release stated.
“With the exception of the [Office of Inspector General, Health and Human Services] settlement of $40 million, my administration has achieved a positive operating income seven of the eight years I have served as the CEO,” Brexler said.
Staff writers Ansley Haman and Judy Walton contributed to this report.
TIMELINE FOR JIM BREXLER
Jim Brexler joined Erlanger as president and CEO in 2004, leaving his job as vice chancellor of the Louisiana State University Health Sciences Center, where he had served since 1999. He stayed for more than years — above average for hospital CEOs, whose average tenure is between three and five years, according to Erlanger trustee Kim White.
November 2003: Erlanger CEO finalists are Jim Brexler, CEO of the health care services division of the Louisiana State University Health Sciences Center in Baton Rouge, and Jim Hobbes, CEO of Sisters of Mercy Health System in St. Louis.
December 2003: Erlanger board votes unanimously to hire Brexler at a salary of $360,000 a year with bonuses up to $108,000.
March 1, 2004: Brexler starts work with task of negotiating with the Office of Inspector General at U.S. Health and Human Services, which is investigating hiring and contract policies at Erlanger.
March 3, 2004: Brexler gives longtime colleague and book co-author Chip Caldwell a $44,000, four-month consulting contract to assess the hospital organization without informing the board, which finds out in May.
March 25, 2004: Brexler authorizes bonuses totaling $160,000 for top Erlanger managers and names former interim CEO Charlesetta Woodard-Thompson as interim executive vice president.
April 2004: Erlanger agrees to pay former chief government relations officer Irvin Overton $800,000 to settle an age- and race-discrimination grievance related to his not being chosen as a finalist for the CEO job.
May 2004: Chief strategic officer David Frum resigns to take a job in Corpus Christi, Texas.
August 2004: Erlanger announces an expected profit of $14 million and bonuses of $100 to $200 authorized for employees.
September 2004: Trustees award Brexler a $20,000 bonus.
October 2004: $19 million profit announced for 2003; certificate of need granted for $68 million expansion of Erlanger’s Gunbarrel Road campus.
November 2004: Hospital loses $10 million in second quarter 2004; cost-control measures announced, including layoffs and elimination of 300 positions over two years.
May 2005: $7.6 million loss reported for the first 10 months of 2004-05 fiscal year after profits of $19 million in 2003 and $25 million in 2002.
Erlanger CEO Jim Brexler, middle, speaks as a representative of the Hamilton County health care leadership group about the good that Project Access has brought to low-income and uninsured area residents. At left, Project Access Chairman Joe Cofer listens along with Memorial CEO Jim Hobson, right.Photo by Dan Henry.
August 2005: Brexler rejects up to $108,000 in bonus pay, saying struggling hospital can’t afford it.
October 2005: Board agrees to pay $40 million to settle a U.S. Health and Human Services investigation over offering incentives to doctors in exchange for referrals.
January 2006: Three top hospital officials leave: Chief Financial Officer Marvin Kurtz resigns, Chief Medical Office Melvin Twiest retires and Chief Information Officer Brad Brown announces he will retire in March.
March 2006: Trustees OK $5.9 million expansion of maternity care at Erlanger East, first phase of $68 million revamp of Gunbarrel Road campus.
August 2006: Brexler hires Doug Fisher, former staffer for U.S. Rep. Zach Wamp, as government relations representative.
February 2007: U.S. President George W. Bush visits Erlanger to promote health care proposals.
March 2007: Trustees OK $2.6 million purchase of Galen Imaging facility behind Erlanger’s Gunbarrel Road campus, eye future construction of new building.
April 2007: Erlanger agrees to pay contractor $300,000 to create a 10-year facilities plan.
June 2007: Hospital officials project $7.2 million profit for 2007, $16 million for 2008.
November 2007: Trustees increase Brexler’s annual pay by $190,000 to $550,000, the first raise in his base salary since he was hired in 2004; the hospital announces it lost $6.2 million on operations in the first half of the 2008 fiscal year.
February 2008: Erlanger organizes the second emergency medicine residency program in Tennessee.
Staff Photo by Allison Kwesell/Chattanooga Times Free Press - Erlanger CEO Jim Brexler (left), BlueCross CEO Vicky Gregg (center) listen as UTC Accounting professor, Greg Thibadoux (right) speaks during a health care reform forum sponsored by the American Society of Women Accountants at the Chattanoogan.
March 2008: Erlanger trustees sell LifeForce helicopters to private vendor Med-Trans for $12.1 million and transfer 16 pilots, saving $20 million in replacement costs.
June 2008: Losses for the year through May hit $12.3 million; fiscal 2009 budget projects $11.5 million profit and 200 job cuts.
July 2008: Citing low patient loads, Erlanger closes its burn unit, despite protests from community that burn patients must now travel to Augusta, Ga.
August 2008: Brexler announces engagement to Doug Fisher’s daughter, Kelly.
September 2008: Total losses in fiscal 2008 hit $15.6 million; Brexler blames late federal reimbursements.
January 2009: Hospital announces plans to cut $10 million from spending in the second half of fiscal year, including about 80 jobs; hospital ends 2009 fiscal year with $10 million profit.
October 2009: Brexler awarded $198,000 bonus, part of $1.7 million in management bonuses in 2009-10.
November 2009: An Erlanger security officer uses a Taser on a rowdy patient being transferred from the hospital to Moccasin Bend Mental Health Institute. The patient dies and the Tennessee Bureau of Investigation becomes involved. An autopsy shows blood clots caused the patient’s death.
April 2010: Erlanger signs non-bid contract with Walden Security to manage security on an interim basis at $10,000 a month; hospital denies any relation to November patient death.
June 2010: Erlanger projects $9.2 million profit in 2011 fiscal year.
August 2010: Hospital restructures management, splitting duties previously handled by Chief Operating Officer Charlesetta Woodard-Thompson among four people who will report to Brexler.
October 2010: Hospital reports $8.58 million operating profit for 2010 and says executives will receive bonuses.
October 2010: Hutcheson Medical Center partners with Erlanger in hopes of financial resuscitation.
November 2010: Erlanger announces plans for $4 million in employee raises but excludes top management, who will be paid bonuses; hospital is $450,000 in the black for the year.
December 2010: Brexler given $192,395 bonus, part of $1.9 million in bonuses for 123 managers for 2010.
January 2011: Brexler spends a week in his own hospital after falling from a ladder and injuring his back and shoulder.
Staff Photo by Angela Lewis/Chattanooga Times Free Press Erlanger President and CEO Jim Brexler, center, talks about a partnership between Erlanger Health System and Hutcheson Medical Center on Thursdsay during a news conference at Hutcheson. Hutcheson board of directors Chairman Martha Attaway, left, and President and CEO Charles Stewart, right, listen.
March 2011: Name change at T.C. Thompson Children’s Hospital sparks months of protest from community and supporters.
March 2011: Trustees outsource hospital security to Walden Security for $2.3 million a year, nearly twice the cost of in-house services.
April 2011: Hutcheson and Erlanger strike a deal that extends a $20 million line of credit to the North Georgia hospital and allows Erlanger to choose Hutcheson executives. Erlanger shows $800,000 loss.
May 2011: Hospital tallies $1.2 million loss.
June 2011: Erlanger announces and approves 5 percent price increase.
July 2011: Monthly loss is $1.3 million.
August 2011: Erlanger agrees to pay $388,000 to the Ritz-Carlton hotel chain for employee training, with options for extensions.
October 2011: Hospital loses $1.07 million in first quarter.
Sources: Newspaper archives, Erlanger financial documents
Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...