published Saturday, April 2nd, 2011

Hutcheson hears pitch from for-profit hospital firm

by Emily Bregel
David Ashburn, center, listens to discussions during a meeting of Hospital Authority trustees on Friday. The meeting covered many of the hospital's current issues.
Staff photo by Jake Daniels/Chattanooga Times Free Press
David Ashburn, center, listens to discussions during a meeting of Hospital Authority trustees on Friday. The meeting covered many of the hospital's current issues. Staff photo by Jake Daniels/Chattanooga Times Free Press

FORT OGLETHORPE—Trustees of the Hospital Authority that owns Hutcheson Medical Center heard a brief pitch from a for-profit hospital management firm that specializes in rural hospitals, at a special called meeting Friday night.

“Do investor-owned hospitals provide care to the poor? I’m proud of what we do for the poor,” said Alan Levine, of Naples, Fla.-based Health Management Associates, in his presentation. “We have hospitals in Florida that (have) 25 and 30 percent of their patient days are Medicaid and charity (care to the poor). And those hospitals are profitable, folks.”

Even as Hutcheson leaders and board representatives inch closer to finalizing a partnership deal with Erlanger Health System, legal counsel for the Hospital Authority board sought alternative proposals last week, issuing a request for information open to all — for-profit and nonprofit companies.

Six health systems or hospitals replied with interest, including Parkridge Medical Center and Memorial Health Care System in Chattanooga, who did not submit full proposals, said Don Oliver, legal counsel for the authority.

That request for information was issued in response to questions last week from the Hospital Authority board Chairman Darrell Weldon, who asked what the back-up plan was if the Erlanger deal fell apart, Oliver said.

Levine said the hospital shouldn’t rush into an agreement with nonprofit safety-net hospital Erlanger.

“Make sure you consider all your options,” he said. “Unfortunately the analogy I use is ‘making a decision with a gun to your head,’ because you’re facing some serious financial issues here. Sometimes those are when the worst decisions get made.”

Hospital leaders have been engaged in talks with Erlanger since entering into a 60-day due diligence period in late October. The partnership is aimed at saving the ailing Fort Oglethorpe hospital, which is losing $1 million a month and is in default on a $35 million bond issue.

Only five trustees — the minimum required for a legal meeting — were present at the meeting, out of nine total members. Present were board vice chairman Bill Cohen, Steven Ellis, Bill Chapin, Daniel Jewell, Bill Cohen and David Ashburn.

Board Chairman Darrell Weldon was not present at the meeting, after he issued a notice canceling the called meeting on Thursday. But legal counsel for the board and Daniel Jewell sent emails later that day emphasizing that the meeting would go on as scheduled. They suggested efforts to cancel the meeting were intended to undermine the board’s authority.

Hospital trustees temporarily tabled one motion until more trustees could review it. The motion would have put Hutcheson Medical Center Inc. on notice that it had violated the terms of the Hospital Authority’s lease agreement and risked termination of that agreement, a 40-year lease first signed in the mid-1990s.

Delaying the vote would help unite trustees, said trustee Ken Rhudy, who listened in on the meeting by phone and could not cast a vote. “The momentum we have built has fallen by the wayside. The only way to rebuild it is by getting everybody in the room to talk.”

Under the motion the lease agreement could be terminated after 90 days if Hutcheson Medical Center Inc. failed to remedy or take “reasonable steps” to remedy the problems in that time, the motion said.

Those violations include failure to maintain bond covenants, including meeting a minimum of 45 days cash on hand, required under the terms of the lease, Oliver said.

Trustees scheduled another meeting for Wednesday, April 6, to address that issue.

They then went into closed session to discuss changes their legal counsel had suggested to the latest version of the Erlanger management agreement and related documents, which are under a confidentiality agreement.

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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HMCEmployee said...

Would somebody put a gag on Bebe Heiskel and Don Oliver, who shouldn't even be allowed to practice law, by the way. Instead of furthering her own agenda, the stupid b>>ch needs to pay attention to what the hospital as a whole wants and we want this management merger with Erlanger!!!!! WE DO NOT WANT TO EVER BECOME A FOR PROFIT FACILITY!!!!!!!!!!!!!! Bebe needs to shut up and take her butt out of this area for good -- and take the idiot Oliver, who self appointed himself at the attorney, with her. They can run their schemes elsewhere, but leave HMC the heck alone.

April 2, 2011 at 11:49 a.m.
littleoleme said...

Hospital employees do not get to dictate who partners with HMC. Even though I empathize with the horrible situation the employees are facing by wanting to retain their jobs and therefore their paychecks, I do not want to jump at a "quick" fix to merge with Erlanger. The fact of the matter is that Erlanger is NOT the only game in town regardless of how the hospital board may view it.

April 2, 2011 at 12:16 p.m.
HMCEmployee said...

Well you know, maybe they should listen --- had they listened to the "nothing employees" they would have known a freaking long time ago that they needed to boot Stewart because he was taking us down the drain. Maybe it's about time that the top dogs listened to the people who are actually doing the work and knows whats going on -- instead of showing up once a month for a free meal, pay attention to the people that work there day in day out.

April 2, 2011 at 6:57 p.m.
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