published Tuesday, October 2nd, 2012

Chattanooga hospitals pouring millions into renovations, technology and expansions

Work continues Thursday at Memorial Hospital.
Work continues Thursday at Memorial Hospital.
Photo by Angela Lewis.
CAPITAL BUDGETS

Erlanger: $38 million; new ER at Erlanger East, new Southside Health Center and an operating room at Erlanger's main campus, among other improvements

Memorial: $91 million; part of a 4-year expansion plan that includes revamped operating rooms, a cardiac bed tower, expanded intensive care units and a hybrid operating suite

Parkridge: $16 million; various projects including completing the Parkridge Valley Adult Services campus, a new MRI machine and equipment

Source: Erlanger and Memorial figures are for fiscal year 2013; Parkridge numbers are for calendar year 2012.

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Despite a swiftly changing health care environment and uncertainty over how Tennessee may expand its Medicaid program under federal guidelines, Chattanooga hospitals are pouring millions of dollars into renovations, updated technology and building expansions.

The three largest systems -- Erlanger, Memorial Health Care and Parkridge -- significantly have increased their capital budgets this year.

For the first time in about a decade, Erlanger is spending more in capital projects this year than the amount of its equipment and facilities depreciated, said Joe Winick, senior vice president of strategic planning. Spending more than depreciation means the hospital is improving its equipment, Winick said.

"This takes us to a higher level. This is transformative," said Winick, speaking after a board meeting last week in which trustees approved several million dollars for ongoing projects.

In recent years, Erlanger has spent about $23 million to $25 million a year for capital projects, but last year it dropped down to about $16 million because of financial difficulties. This year, the public hospital has upped those numbers to $38 million, with a focus on expanding and updating its operating capabilities.

Memorial -- whose capital budget has gone from $39 million in 2010 to more than $90 million a year -- is in the middle of a four-year expansion plan that includes new buildings, operating rooms and cardiac facilities, according to spokeswoman Lisa McCluskey.

Parkridge increased its budget to $16 million this year, according to its chief financial officer, Jay St. Pierre.

"We understand how important it is to reinvest in our facilities so that we can provide the best possible care for our patients," St. Pierre wrote in a statement.

Erlanger and Memorial command similar market shares of around 40 percent in the area, while Parkridge has a market share of about half that.

During a recent Erlanger board meeting, hospital trustees asked about improvements to operating rooms and equipment. At least part of the hospital's financial difficulties came after doctors began doing more surgeries at other hospitals.

Winick said the hospital is not focusing solely on improving its operating equipment, but also is spending money on operating room expansion and an upgrade of equipment and suites, as well as a new operating room at T.C. Thompson Children's Hospital at Erlanger.

For Erlanger, capital improvements are not only a way to remain competitive in the market, but also to attract students to the hospital's teaching program, Winick said.

"You want to keep your facilities consistent with the vision of who you are," he said.

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about Mariann Martin...

Mariann Martin covers healthcare in Chattanooga and the surrounding region. She joined the Times Free Press in February 2011, after covering crime and courts for the Jackson (Tenn.) Sun for two years. Mariann was born in Indiana, but grew up in Pennsylvania, Tennessee and Belize. She graduated from Union University in 2005 with degrees in English and history and has master’s degrees in international relations and history from the University of Toronto. While attending Union, ...

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