published Tuesday, August 26th, 2014

Erlanger to change financial reporting

Seeking a more “industry-standard” basis of reporting financials, Chattanooga’s public hospital will be switching from its traditional monthly to quarterly financial reports.

Erlanger Health System, which is governed by an 11-member board appointed by public officials, for years has outlined its financial status at monthly board meetings.

But hospital officials said Monday that monthly reports show too many “fluctuations” without giving a clear picture of the hospital’s true financial state.

Officials say the hospital is not mandated to provide the monthly reports to the board — it is just how it has always operated. Bondholders on Wall Street have been encouraging the hospital to change to a quarterly model for a while, said chief financial officer Britt Tabor.

Erlanger management officials also indicated that board members would be receiving more frequent financial metrics in “strategic” briefings, which are not public.

Budget and Finance Committee Chairman Jack Studer said that despite the change, he expected accountability would be maintained through the “high-functioning relationship” between the board and management.

If serious losses occurred in one month — like one month last year that led Erlanger officials to freeze employee vacation — Studer said he would expect hospital leaders to keep the board in the loop.

“That would lead to me as a board member to say, ‘This is something we need to dig into. We need more information about what it is and what it means,’” Studer said. “We can do that when it’s necessary, without doing it every single month.”

If at any point board members feel they are not getting adequate information, Studer said, the board can switch back to monthly reports.

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

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