published Saturday, October 9th, 2010

Hospital seeks recovery


by Emily Bregel

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.

  • photo
    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.

CORPORATE STRUCTURE

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

HUTCHESON FINANCIALS

* 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.”

ECONOMIC DOWNTURN

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.

DOCTORS NEEDED

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.”

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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podiebell said...

Hutcheson Medical Center cannot become a statistic of the downwardly spiraling economy. The answer is not in combining it with Erlanger though. Both of these hospitals take on so many indigent cases that, when combined, they would crash and burn. They are also the worst in quality of healthcare by anecdotal evidence. Everyone I know has had repeated bad experiences at both of these facilities. I personally have had horrible treatment from Hutcheson and Erlanger on numerous occasions. I have since stopped using them entirely for emergency and surgical care and now go to Parkridge. Since I currently have insurance it is a luxury I can afford since Parkridge is participating in my insurance plan. The last time I went to the E.R. there I did not wait at all. I was the only patient there. I had driven by Memorial first since it was closer but it was so packed that people were lined up along the walls because there was nowhere to sit down. I received excellent care at Parkridge and even received a discount off my copay since I paid when I left instead of waiting on the bill. I truly felt the disparity in our healthcare system that day. I was one of the privileged few who could walk in and flash a little plastic card and be treated like royalty. I felt horrible for all those poor, sick people that I knew were still waiting to be seen at Memorial as I walked out with my prescription and got into my car, the only one in the parking lot.

It is the separation of poor versus wealthy that has created this disparity in our hospitals. I have seen both sides of the coin so I know why it operates that way. When you have insurance and money there is a certain expectation of quality from your healthcare providers. Basically, you get what you pay for. When you are poor and just begging for anyone to help you, they could send in a medicine man and you wouldn't care as long as you don't have to pay for it. The social bias rests within all of us and is manifested best in our hospital system. We have for profit hospitals that only the insured and wealthy can go to and then we have the "community hospitals" that are really just the dumping grounds for everybody else. Allowing for-profit organizations to push away the bad apples is partially the reason the healthcare system is failing in general. If everyone shared responsibility in the care of the less fortunate then the burden would not exist. It would just be a charitable donation every year.

October 9, 2010 at 8:54 a.m.
champ1 said...

Social bias huh? So I guess the $800,000.00 in one years profits that resulted in a nearly $27,0000,000.00 expansion has nothing to do with Hutcheson's problems...It's always going to be more difficult to give quality care to people who can't afford to even make a minimal fiscal contibution to there own well-being. There isn't enough money out there to make up for this, and truth be told, the rich will always find a way to get better treatment than the average guy. Still, that does not excuse the gross mismanagement of resources that this board has overseen. Their first move should be to replace this board.

October 9, 2010 at 10:31 a.m.
kayro19 said...

Hutcheson would do better if the Chattanooga md's would stop taking their insurance paying patients to Chattanooga, such as cancer care, chemo therapy. Let the locals get their treatments at their local hospital. Yes granted some procedures need to be done at Erlanger or Memorial, but many do not.

October 9, 2010 at 11:41 a.m.
Marathon5454 said...

The populations of Walker and Catoosa Counties have increased by over 50% in the last 25 years. And 25 years ago Hutcheson was in great financial condition. It had renovated facilities and over $20 million in surplus cash. For the management of Hutcheson to manage its way from where it was then to where it is now should warrant a Grand Jury Investigation. Hutcheson's finances were "ran into the ground" at the same time that its primary service area population increased by over 50%. Are Hutcheson's hapless managers trying to convince us that the 50% population increase was all indigent people? Really...those indigents must be the ones building all the new homes in Walker and Catoosa. Come on man. I don't think so. But, the public needs to know what happened and who got rich at the expense of Hutcheson's demise.

A tremendous public asset has been ruined and I call on the government officials of Walker, Catoosa and Dade Counties to order a full scale investigation of the ruination. This newspaper article has the same tired old names still trying to find solutions. I think that they are the problem....not the solution

October 10, 2010 at 5:48 p.m.
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