published Tuesday, December 31st, 2013

Hutcheson Medical Center in Fort Oglethorpe gets one-year loan extension

Hutcheson Medical Center
Hutcheson Medical Center
Photo by Doug Strickland /Chattanooga Times Free Press.
  • photo
    Bebe Heiskell, sole commissioner of Walker County, attends a news conference at the Walker County Courthouse Annex on Friday in LaFyette, Ga. Heiskell announced her proposal to extend the line of credit for Hutcheson Medical Center to $3.4 million to cover operating costs prior to the Oct. 25 deadline for the request for proposals.
    Photo by Maura Friedman.
    enlarge photo

LaFAYETTE, Ga. — Hutcheson Medical Center has another year to repay $6 million it borrowed from Walker and Catoosa counties. And the financially troubled Fort Oglethorpe hospital has another $1 million line of credit backed by Walker County, if it needs it.

That's the upshot of a special meeting that Walker County Sole Commissioner Bebe Heiskell held Monday afternoon -- the day before the $6 million line of credit through Regions Bank was due to be repaid.

"We are extending this credit, because we want the community and hospital staff to know that we support Hutcheson's future as an independent medical center," Heiskell said in a statement.

Hospital spokeswoman Stacey Kaufmann doesn't think that Hutcheson will need to tap the $1 million line of credit that Walker County backed Monday.

"We don't foresee needing it," she said.

That's partly because Hutcheson got a boost to its bottom line late last week, when the publicly owned hospital netted about $2 million in Medicaid money for facilities that treat indigent patients through the Disproportionate Share Hospital program.

The interest rate on Hutcheson's $6 million line of credit increased from 1.75 percent to 2 percent. When the money is due on Dec. 31, 2014, Hutcheson will owe $6,321,000 on the $6 million line of credit and $1,033,500 on the $1 million, which also has a 2 percent annual interest rate.

Earlier this year, hospital leaders severed a management agreement with Erlanger Health System. Then board members decided to operate Hutcheson independently after revealing only two health care organizations responded to requests for proposals to manage the hospital. To trim expenses, executives proposed "austerity measures" that board members approved on Dec. 18. The Women's Center's labor and delivery services will shut down starting today. Dubbed "The Place Where Babies Come From," Hutcheson's Women's Center has been open since 1988, though babies have been delivered at the hospital since it opened in 1952.

Kaufmann said it won't be until noon today that the hospital knows how many of the 37 employees affected by the Women's Center closure will have taken jobs elsewhere at Hutcheson.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or 423-757-6651.

about Tim Omarzu...

Tim Omarzu covers Catoosa and Walker counties for the Times Free Press. Omarzu is a longtime journalist who has worked as a reporter and editor at daily and weekly newspapers in Michigan, Nevada and California. Stories he's covered include crime in blighted parts of metro Detroit and Reno, Nev.; environmental activists tree-sitting in California's Sierra Nevada foothills; attempts by the Michigan Militia to take over a township¹s government in northern Michigan. A native of Michigan, ...

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