published Monday, July 12th, 2010

Struggling Hutcheson seeks partners


by Emily Bregel

HUTCHESON FINANCIALS

Fiscal 2007: Gain of $767,000

Fiscal 2008: Loss of $468,000, including one-time bond refinancing

Fiscal 2009: Pending

Source: Gerald Faircloth, chief financial officer

The economic recession is weighing on Hutcheson Medical Center in Fort Oglethorpe and to lessen deepening losses, hospital leaders are exploring options, including partnerships with other health care facilities in Chattanooga.

"It's sort of like we've been in a lull, like when you're out at sea and the wind quits blowing. You're just sort of sitting there with no momentum," said Hutcheson Chief Financial Officer Gerald Faircloth.

The hospital hasn't yet had any formal discussions with other hospitals about any joint venture, but a relationship with an outside facility seems likely, said Charles Stewart, Hutcheson president and CEO.

"There are so many unknowns looking farther down the road with health care reform, we will need to be working in close collaboration with someone," he said.

A few years ago, Hutcheson was on the rebound after multimillion-dollar losses in the early part of the decade. The hospital recorded its first gain in years in 2007 with a profit of $767,000, Mr. Faircloth said.

But the recession's onset reversed the hospital's turnaround, especially in the 2009 fiscal year, which for Hutcheson ended last September, Mr. Faircloth said.

Officials still are finalizing numbers for fiscal year 2009, but Hutcheson's bottom line will be deeper in the red than in the previous fiscal year, when the hospital lost $468,000, Mr. Faircloth said.

Hospital officials are considering partnerships with other hospitals in areas including electronic health records and telemedicine. The hospital might create a set-up in which Hutcheson patients could consult electronically with a specialist at a major hospital such as Erlanger while still remaining a patient at Hutcheson, Mr. Faircloth said.

In an e-mailed statement, Erlanger President and CEO Jim Brexler said he is open to a collaboration.

"Erlanger's foremost concern has, and continues to be, meeting the needs of all patients in our region," he said. "To address that concern, the Erlanger Health System stands ready to work with local leadership to ensure continued access to quality health care services."

Parkridge Medical Center spokeswoman Pat Holloway would not comment on the possibility of a collaboration with Hutcheson but said officials knew about the Georgia hospital's financial concerns.

"We are aware of the situation and we're monitoring it closely," she said.

Jim Hobson, president and CEO of Memorial Hospital, said the hospital already works closely with Hutcheson in some areas such as cardiology and is open to future collaboration.

"As we all kind of stare into health care of the future and what that's going to mean, the notion of all of us being open to new kinds of partnerships is something that continues to make sense to me," he said.

Community hospitals face major hurdles in today's economy.

Just last week, Chatsworth-based Murray Medical Center's financial troubles prompted a warning from affiliate Hamilton Health Care System, which owns Hamilton Medical Center in Dalton, Ga., and has lent money to Murray.

Hamilton leaders said the medical center must alter its operations to stem its losses, projected to reach $2.4 million for this year. Otherwise, Hamilton will stop lending the hospital money to cover its operating costs.

Since 2006, Hamilton has lent about $7 million to Murray Medical Center, which is leased from the Murray County Hospital Authority by Murray Medical Center Inc., an affiliate of Hamilton.

More than three-quarters of Murray County residents go outside the county for their health care services, said Lamar Lyle, chairman of the board for Hamilton Health Care System.

"They're in a position where they don't have the volume and don't have the revenue flow to cover their costs. We don't see that trend improving," he said.

TOUGH COMPETITION

A number of Georgia hospitals are seeking partnership with other health care providers to cope with financial woes, said Kevin Bloye, spokesman for the Georgia Hospital Association.

Metro Atlanta-based St. Joseph's Hospital still is looking for a partner hospital to help it control costs after last week abandoning efforts to forge a joint venture with Piedmont Hospital, according to the Atlanta Journal-Constitution.

Ty Cobb Healthcare System, based in Royston, Ga., is collaborating with local doctors to build a physician-owned hospital in Northeast Georgia, Mr. Bloye said.

"We see that as a trend," he said. "There are a lot of creative arrangements that are coming to fruition because it is such a difficult environment. A lot of hospitals are beginning to realize, when they look at their long-term survival, that they're going to need to establish some partnerships for help with that."

Hutcheson officials say that, like most hospitals, its revenues and patient admission levels have been undercut by high uninsured rates among patients, and the loss of paying patients who are deciding to delay elective treatments.

Many patients coming to the hospital's emergency department have delayed preventive care and are sicker and more expensive to treat, Mr. Faircloth said.

But the hospital also is ceding valuable patient referrals to other hospitals who employ doctors or operate clinics in the North Georgia area, including Memorial Hospital, Parkridge Medical Center and Erlanger.

For example, Memorial operates an eight-physician family medical practice on Battlefield Parkway that treats about 14,000 patients. Parkridge also employs a number of physicians in the area and operates Parkridge Medical Associates of North Georgia, and Erlanger South Family Medicine sees patients in Ringgold, Ga.

"When you have hospitals in rural areas that have larger regional facilities nearby that are putting outpatient centers in those areas, it makes it extremely difficult for those (rural) hospitals," Mr. Bloye said.

Hutcheson is focusing on boosting its own primary care physician presence to re-establish a strong referral base, Mr. Faircloth said. The hospital has added at least three primary care physicians in the last year and a half, he said.

"Physicians are key to our success," he said.

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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Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
JimH said...

As a firefighter forced to retire after my second back surgery, the best relief from pain that I know is regular exercise and sound diet and rest, and the need for any medication is always worrisome. So when a Hutcheson affiliated clinic began posting signs that any prescription for “pain” or “nerve” or such medications, would require an office visit every single month, I confronted my favorite but now-former doctor with the obvious:

does Hutcheson not trust its long-standing patients, or its own physicians, or does it just want to generate more income? I clearly hit a nerve and won’t quote his response, except to say he soon-after found work elsewhere, and I also have since wanted nothing more to do with Hutcheson.

A recent request for a three year old lab record has only gotten me that “they may (or may not) be found” in some warehouse, and no word since. It may be that (qualified) “Physicians are key to [Hutcheson’s] success,” but actually serving and caring for patients’ needs could be helpful for all concerned.

Sincerely,

James Henderson

July 12, 2010 at 1:53 a.m.
mkelley said...

I was in ICU there in November and it wasn't the Hutcheson I knew. Morale is down, jobs are being cut and the quality is just horrible. I had to go back in to the hospital, just because they "missed" a couple of symptoms and problems I had while I was in.

They're losing money because of bad business decisions, not because of the economy. Buying new furniture when buildings of furniture sat unused. Running off physicians who made money, killing programs all while making their management team larger.

They need a money manager. The people of Catoosa, Dade, Walker should get more - after all, at one point they owned the hospital.

July 12, 2010 at 9:57 a.m.
kb4242 said...

I am an employee of Hutcheson Medical Center and I have been a patient there as well. I have never worked in a better place where I enjoy going to work everyday because I love the work I do and I love the people I work with. There are problems in every hosptial across America. You will never find a perfect hospital. I have been to Erlanger, Memorial, and Parkridge. Never have I had a perfect experience at any of these hospitals. Yes, mistakes happen. Everyone is human. The employees of Hutcheson are fighting for their lives when it comes to needing to merge with local hospitals. Not only are jobs at stake, but people's houses, their ability to take care of their families, and being able to survive in a horrible economy. If you don't work in healthcare then there is no way you can understand the cutbacks, the restraints insurance companies have put on us, and the demands of non-compliant and difficult patients and family members. It takes special people to work in healthcare. I pray everyday that something comes along to help save Hutcheson, because that is where I started my career, and that is where I would still like to be when I retire.

July 12, 2010 at 9:48 p.m.
wdraper said...

I have worked with Hutcheson Medical Center for almost twenty years and I have had the need of their health care services and surgical services. I feel everyone employed there does their very best to give that little extra in caring for the patient. It seems that some people want to express only the unpleasant experiences they "may" have had, which is usually only a small part of the entire experience they had, how sad. Guess we all want our 15 seconds of fame. I whole heartily recommend Hutcheson Medical Center to anyone needing the health care services offered there. The community should be proud to have such a fine facility in their area and should request, or maybe demand, the services of Hutcheson Medical Center whenever their primary care doctor says hospital care is needed.

July 12, 2010 at 10:20 p.m.
firefightmatt said...

I agree that the economy could have some effect on the hospital, but the economy doesn't change the fact that people are still sick and need hospitals. Most people in the area know the tract record of Hutcheson and when they come to making that decision they choose to go else where. Especially when people need treatment in the areas of cardio, stroke, and even ortho. Hutcheson can't come through with treatment. It seems they are hurting themselves.

July 14, 2010 at 11:14 a.m.
mkelley said...

Hutcheson's problems started before the economy tanked. They had a good series of profitable years, but then they ran off Physicians and cut staff.

As to the allegation that I "may" have had an unpleasant experience, I can show you the bills of what it took to fix what they ignored.

July 15, 2010 at 4:53 p.m.
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