The future of Hutcheson Medical Center should become clearer in the next couple weeks after board leaders evaluate proposals from two Chattanooga health systems vying for a partnership with the struggling community hospital.
An ad hoc committee including Hutcheson management and board members, county commissioners and medical staff will hear proposals next week from Memorial and Erlanger health systems in separate, closed meetings, committee members said.
Staff Photo by Laura-Chase McGehee/Chattanooga Times Free Press/ Oct 7, 2010 - Hutcheson Medical Center on Gross Crescent Circle in Fort Oglethorpe, Ga. This is to accompany a story on Hutcheson seeking an outside partner (a larger hospital) to help with its financial troubles.
“These two weeks are very critical to the health care issues of North Georgia, and perhaps Chattanooga,” said committee member Leonard Fant, chairman of Hutcheson Health Foundation’s board and former Hutcheson CEO. He’s also the former chief operating officer for Erlanger.
Hutcheson’s board leaders hope affiliating with a larger, nonprofit health system will attract more doctors — and more paying patients — to the 195-bed hospital in Fort Oglethorpe, which is hurting from from losses due to treating patients who can’t pay for their care and lower patient admissions.
Hutcheson provided $5 million in uncompensated care in 2008, according to financial statements, and its average daily patient census has averaged in the 40s, executives have said.
“Survival sometimes takes on a communal or alliance-type scenario,” Fant said.
The committee will recap the two presentations for board members but will not necessarily make a recommendation on either proposal, officials said.
Hutcheson Medical Center, a publicly owned community hospital, is governed by the boards of four entities.
* Hutcheson Medical Center Inc. — The private nonprofit company, created in 1995, operates the hospital. It leases the former Memorial Tri-County Hospital building from the local hospital authority and has a 13-member board to oversee daily operations.
* Hospital Authority of Walker, Dade and Catoosa Counties — The authority owns the hospital building and oversees Hutcheson Medical Center’s 40-year lease through a nine-person board appointed by county commissioners.
* Hutcheson Medical Division — The for-profit sister company to Hutcheson Medical Center was established to operate medical office facilities and practices. Its board oversees Hutcheson’s clinics.
* Hutcheson Health Enterprises — The nonprofit parent company of Hutcheson Medical Center and Hutcheson Medical Division has a 13-person board.
* Hutcheson Health Foundation — The nonprofit foundation was established to raise money supporting the hospital’s mission to serve residents of Walker, Dade and Catoosa counties. Its board has more than 25 members.
Source: Hutcheson Medical Center officials; Hutcheson financial statements
* 2006: Loss of $1.5 million
* 2007: Profit of $766,766
* 2008: Loss of $468,517
* 2009: The hospital declined to release these figures.
Source: Hutcheson financial statements
Dade County commissioners expect a final decision by Dec. 1, said County Executive Ted Rumley.
“I’m just glad it’s coming to a head,” he said. “Right now there’s going to be a big change and we know that, and it’s going to be a change for the better.”
Spokesmen for Erlanger and Memorial hospitals declined to comment, citing a confidentiality agreement with Hutcheson.
Hutcheson Medical Center board chairwoman Martha Attaway said hospital management and medical staff, board representatives and county commissioners have been working to figure out how to pursue a relationship with another hospital.
Dr. Darrell Weldon, board chairman of the Hospital Authority of Walker, Dade and Catoosa Counties, said Hutcheson must focus on core services, including primary care. Larger medical centers can provide more complex services in the region, he said.
“We don’t want to compete with them for the hearts and transplants. ... We want to be able to do community-based medical care,” he said.
The hospital is an extremely valuable asset to North Georgia, said Bebe Heiskell, Walker County’s sole commissioner.
“There’s 150,000 people in the three counties of Walker, Dade and Catoosa and most of them are paying patients,” she said.
Hutcheson is “not faring well ... but that doesn’t mean that’s not a good facility. If they had the right doctors and the right administration, I believe they could prosper.”
SEARCH IS ON
Hutcheson in July hired Community Hospital Consulting of Plano, Texas, to evaluate its finances and determine what kind of partnership could provide support while conserving local control over operations.
Erlanger hospital provides more than $80 million in uncompensated care each year, officials say. So Erlanger has a particularly big incentive to ensure Hutcheson’s financial stability so Erlanger doesn’t get saddled with even more indigent patients, said Dr. David Hall, vice chairman of the Hutcheson Foundation board and committee member.
“It’s certainly to Erlanger’s interest that we remain financially viable so the indigent and Medicaid (patients) are cared for out here locally and don’t get fostered off onto them, in addition to what they already have,” Hall said. “They have a financial stake in it.”
A new partnership also could bring changes in the hospital’s governance, which is now shared by five boards, Rumley said. The tri-county hospital authority owns the hospital building and has a board appointed by county commissioners in Dade, Catoosa and Walker. The Hamilton Medical Center Inc. board oversees the daily operations of Hutcheson.
In the future, “you can bet the counties will have more control, more authority, regardless of what it takes,” Rumley said. “There’s no reason to have five boards to operate a hospital that size. ... You need to have a board that actually is in charge of that hospital and not four or five boards that you have different chairmen for.”
Since 2007, when the hospital earned its first profit in years, Hutcheson has made significant investments in renovations and in cancer and cardiology programs.
The 2007 profit of $766,766 prompted the hospital to spend $25 million in 2008 to renovate patient rooms and the lobby, buy equipment and upgrade the Fuller Cancer Center on Battlefield Parkway, according to newspaper archives.
The hospital also spent $1.7 million on a new cardiac catheterization lab that received state approval in 2009, but Hutcheson does not now have an interventional cardiologist to lead the program.
In fiscal 2008, Hutcheson lost $468,000. Hospital officials would not release figures for the fiscal year that ended in September 2009, except to say losses were higher than in the previous year.
President and CEO Charles Stewart said the hospital does not have to release those numbers under the state’s open records law because the final audit is not complete and the numbers have not been discussed in open board meetings. Dr. Weldon said board members have been briefed in closed meetings.
County officials aren’t happy about the delay in receiving the information since they typically get a report on Hutcheson’s finances one or two months after the fiscal year ends, Rumley said.
“That’s just a really touchy thing right now. Normally every year we’re already gotten it,” he said.
Stewart said the recession has boosted Hutcheson’s losses from uncompensated care.
“That has a dramatic impact on our financials, as it does for other community hospitals,” he said.
To deal with the losses, Hutcheson also has also cut services. For instance, it dropped ambulance service to its three-county region in 2008 after losing $700,000 on the service that year, Stewart said at the time.
And the hospital announced last month it had sold its home health arm, Hutcheson Home Health, to Lafayette, La.-based LHC Group.
Officials and board members also say the hospital has lost staff physicians and affiliated community doctors from primary care to pulmonology to cardiology, which affects referrals and patient counts.
Hall said Hutcheson needs more staff specialists in pulmonology, general surgery, cardiology and oncology and a stronger network of primary care doctors to refer to those specialists. A relationship with a larger hospital would help recruit new doctors into those areas, Hall said.
“We badly need doctors out in this community,” Hall said. “Being so close to Chattanooga, any new (physicians) that come into the area, they’re attracted there. That’s the biggest problem.”
He said the listing of hundreds of doctors as Hutcheson staff physicians “means nothing.” Few of them regularly admit and visit patients at Hutcheson, and most practice primarily at Chattanooga hospitals, he said.
If patients must go to Chattanooga to access the pulmonologists, general surgeons or cardiologists who will diagnose their conditions, Hutcheson will miss many opportunities for treatments, Hall said.
To survive, the hospital needs “a much more active and viable medical staff,” he said, but the change may come slowly.
“You can’t just keep losing your medical staff and turn it around all the sudden. ... A lot of these things take time,” Hall said.
Rumley said many Northwest Georgia residents have personal ties to Hutcheson.
He said he was born at Hutcheson when it was called Tri-County Hospital. The counties bought the hospital in the 1950s with funding from residents who agreed to have money taken out of their paychecks, he said.
“People wanted a hospital so badly,” he said. “We don’t want to lose the hospital. That would be a blow to Dade, Walker and Catoosa counties.”
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 ...