published Friday, September 27th, 2013

University of Tennessee, Erlanger officials explore new ties

The Erlanger Baroness campus.
The Erlanger Baroness campus.
Photo by Staff File Photo.

Erlanger hospital and the University of Tennessee are starting talks to "modernize" their affiliation and eventually shift the management of faculty physician practices from the hospital to a joint corporation with the university's College of Medicine.

Erlanger CEO Kevin Spiegel said Thursday the update mainly concerns Erlanger's academic relationship with UT as a teaching hospital, but added that "there will be language in the agreement that really lays the foundation for a joint practice plan."

The relationship with UT and fears that the university was looking for more control over the hospital were major factors of the controversy surrounding Erlanger's CEO search earlier this year.

But Thursday night, state Rep. Gerald McCormick, R-Hixson -- once vocal about his concerns about a UT power grab -- said news of a closer partnership doesn't worry him now that he knows Spiegel.

"The only concern I had was that they were literally going to take Erlanger's name off the sign and put UT's up there, and I'm not worried about that now," he said. "I certainly will keep an eye on it, but I trust Kevin Spiegel to make the right decision to do what's best for the hospital, and I appreciate UT's involvement to improve the hospital."

Dr. Steve Schwab, chancellor of UT's Health Science Center -- which includes the College of Medicine -- gave a "state of the university" presentation to the hospital's board of directors Thursday.

"We live and die with our partner teaching hospitals," Schwab said several times during the presentation.

He said 60 percent of the university's teaching is performed in hospitals and explained how the medical college is poised to "advance the mission in a major way."

Schwab said that independent faculty practices such as those at Erlanger are "not sustainable going forward" because changes in insurance payments and federal policies are creating more and more barriers.

Erlanger currently has contracts to manage practices for many UTCOM faculty members and hospital-employed physicians. UT's plan is for a joint hospital-UTCOM corporation to manage the practices.

Such plans had been drafted in the past but never enacted. Critics said they they were weighted heavily in favor of UTCOM, shifting millions from Erlanger to the university.

But Schwab detailed "huge success stories" of hospitals that had aligned their practices with UTCOM, saying that clinical enterprises had grown and started racking up national rankings.

He gave examples that included of Methodist University Hospital, where Spiegel was CEO before moving to Erlanger.

"We really have to modernize this and strategize to take it to the next level," Spiegel said after the meeting. "We're going to talk about the framework that allows us to go forward [with joint practice plans], but that's really a separate negotiation."

After the meeting, Schwab said that, for now, updating the agreement would focus on updating kind of training programs UT and Erlanger offered together, potentially adding new residencies and fellowships.

"Does Erlanger want to expand its relationship to include basic dental services? To physicians assistants? Do they want more nurse practitioners trained here?" he asked. "That's what we'll be discussing now."

Contact staff writer Kate Harrison at kharrison@timesfreepress.com or 423-757-6673.

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