published Friday, May 23rd, 2014

Erlanger approves stronger contract with UT

The Erlanger hospital campus is shown from South Crest Drive.
The Erlanger hospital campus is shown from South Crest Drive.
Photo by Angela Lewis.

With the motto “we practice what we teach” dotting advertisements for years, Erlanger Health System’s identity as a teaching hospital has long been one of its biggest selling points.

That identity is becoming even more cemented now that the Erlanger board of trustees approved a long-awaited affiliation agreement with the University of Tennessee.

The 10-year binding agreement — which replaces a decades-old contract — more clearly spells out the two groups’ exclusive relationship in the region, along with financial obligations. And it could pave the way for changes in how Erlanger’s hospital-affiliated practices are run.

The agreement sailed through the board unanimously with no objections from physicians or hospital staff — a contrast from the scene over one year ago when doctors and local legislators voiced worry about a UT takeover of the hospital and its practices.

The contract lacked controversy, said CEO Kevin Spiegel, because it simply formalizes the terms of a relationship that have long been in effect — though not explicitly on paper.

“There is not a lot that’s new here,” he said. “It simply solidifies and modernizes a lot of things that were already in place.”

Dr. Steve Schwab, chancellor at the University of Tennessee Health Science Center, said the agreement enhances an “already successful partnership between” the two organizations.

“Together we are committed to developing an academic medical center that will support and serve this community’s needs now and for generations to come,” he said.

Still, crafting the agreement has been a long, “arduous” process that has spanned years, said UT College of Medicine Dean David Seaberg, who has long pushed for the agreement.

The process has sped up since Spiegel, who has been an assistant professor with UT, took the hospital’s helm last year, Seaberg said.

Already in the last six months, Erlanger has boosted its usage of the UT logo on its advertising and presentations. That will likely continue and increase.

Erlanger is not on the verge of becoming “UT Erlanger,” but the agreement does point toward an increase in UT branding — which Spiegel described as a good marketing move.

The agreement does nothing to change governance of the hospital, meaning UT will not be appointing seats to Erlanger’s board.

At this point, the agreement also does not change commitments that already have been budgeted by the hospital.

Erlanger will continue to spend more than $3 million to shoulder the residency program, while UT will primarily support medical student rotations at the hospital, said Erlanger Chief Financial Officer Britt Tabor.

The agreement does state that UT will work to secure more state funding for Erlanger programs.

A key question in the evolving relationship with UT has been what it means for physician practices affiliated with the hospital.

The affiliation agreement does not tackle that issue, but it states that both parties will work to create a “physician organization,” which could consolidate both the academic and the hospital-based practices under one joint organization.

Currently, the plan is for such an organization to include four local practices made up of doctors who are already Erlanger or UT employees. Still, any physician practice plan will need to come before the board for final approval, Spiegel said.

Spiegel stressed that nothing in the agreement will make the hospital a “closed” staff.

Dr. Tom Devlin, the director of the Southeast Regional Stroke Center at Erlanger — who one year ago shared concerns about potential UT-related changes to physician practices and programs — says he is now confident that Spiegel has “the best interest of the physicians in mind.”

“I think the practice plan is a work in progress,” Devlin said. “But I’m very confident Kevin Spiegel will represent us in a good way.”

Before voting on the agreement Thursday night, Erlanger officials touted the benefits of being an academic medical center — including its 178 current residents and the attraction of high-profile physicians drawn to teaching or conducting research.

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

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