published Thursday, April 25th, 2013

Hutcheson Medical Center looks to refinance its debt

Aerial of Hutcheson Medical Center at Fort Oglethorpe, Ga.
Aerial of Hutcheson Medical Center at Fort Oglethorpe, Ga.
Photo by Dan Henry /Chattanooga Times Free Press.

Hutcheson Medical Center leaders support a plan from Catoosa and Walker counties to restructure the hospital's long-term debt.

The plan could mean leasing the Fort Oglethorpe building to another hospital or health care company.

Hutcheson board Chairman Corky Jewell said the counties will help pay off the debts Hutcheson owes stemming from previous administrations. Most notably, Jewell said, the hospital owes Regions Bank about $25 million and Erlanger Health System about $20 million.

The counties would be lending the hospital the money. In time, Hutcheson still would have to repay the counties.

In exchange, the counties have urged Hutcheson to look into leasing its building to another hospital to make sure Hutcheson can pay back the money.

Both sides still are negotiating this agreement. If Hutcheson does lease its building, Jewell said, the doctors and nurses and other staff would become employees of the hospital taking over. Jewell is unsure how much this lease would be worth, or how long it would last.

"It could be five, 10, 15, 20, 30 years long," he said. "Someone might want to go longer than that."

Erlanger could be the hospital to take over. CEO Kevin Spiegel said he hopes to meet with Walker and Catoosa county officials soon to discuss the agreement. Since 2011, Erlanger has partnered with Hutcheson. Former Erlanger official Robert Forgey has managed the hospital, and Erlanger agreed to lend it $20 million.

"I actually am going to keep an open mind in dealing with this," Spiegel said. "I believe what Erlanger does in that community is beneficial and important."

Since partnering with Hutcheson, he said, the hospital's finances have improved. Hutcheson is operating in the black for the first time in seven years, and for the last four months the hospital has performed better than it had projected.

Jewell said it is time to restructure Hutcheson's long-term debt.

"We feel like we have a management team that is good enough to run the hospital and should be on a level playing field," he said. "Up until now, the cards have been stacked against us."

Contact staff writer Tyler Jett at tjett@timesfreepress.com or 423-757-6476.

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