Erlanger moves forward to expand East campus into full-service hospital

photo Erlanger East is planning to move forward with a $40 million expansion to turn the satellite facility into a full-service hospital over the next two years. The hospital is located on Gunbarrel Road.

ERLANGER EAST EXPANSION• Oct. 2004: Tennessee officials unanimously approve Erlanger's plans for a $68.7 million expansion at its campus on Gunbarrel Road. The project will be financed by a mixture of cash and bonds, officials say.• July 2007: Erlanger finishes Phase 1 and 2 of the expansion, which includes a full-term nursery and C-section rooms, and imaging center.• 2008: Phase 3, which includes Erlanger's new emergency room, is delayed by turmoil in the bond market and the collapse of Erlanger's financial advisor, Lehman Brothers. The recession stalls the issuance of new bonds.• 2012: After "monetizing assets" of the East campus to raise enough cash to contribute to the financing process and acquiring additional financing, Erlanger begins planning and construction on the new emergency room.• March 2013: Erlanger East opens its emergency department. Erlanger officials say it has served more than 22,000 area residents during its first year of operations.• August 2014: Erlanger opens the Center for Breast Health.• Sept. 2014: The hospital is granted an extension for completing the expansion and announces it will soon begin work on making Erlanger a full-service hospital.Source: Documents submitted to the Tennessee Health Services & Development Agency

photo Site of Erlanger East Campus.

More bulldozers and ambulances are heading toward Gunbarrel Road.

Nearly a decade after Erlanger Health System announced plans to expand its Erlanger East Campus, construction work soon will begin to turn the satellite campus into a full-service hospital, officials announced Tuesday.

The more-than-$40 million expansion will more than double the number of available beds and will bring more specialty surgeries and services such as a cardiac catheter lab to the hospital.

Officials also confirmed that the hospital is trying to bring a hotel to the site - a potential selling point for patients and their families who travel for care.

The goal at the expanded Erlanger East will be to provide "lifestyle medicine" and "predictable medical care" such as planned surgeries, regular cancer treatment and specialist visits. The campus will expand "both vertically and horizontally," said Joe Winick, vice president of planning and development.

Work is expected to begin sometime this winter and be completed in 2016, Winick said.

The announcement also comes as Erlanger weighs initial plans for a completely new children's hospital.

The image of an aggressively expanding Erlanger is a stark contrast from the picture painted earlier this year of a hospital on the brink, freezing employees' vacation time and warning of potential layoffs and failing its bond covenants.

Hospital officials have called the last year a "turnaround year."

The hospital recently posted its end-of-year audit, which included $18 million in operating revenue - a far cry from the $2 million it had originally budgeted for, and $25 million more than what it posted last year.

A big boost came from a $19.5 million federal cash infusion CEO Kevin Spiegel successfully sought to help pay for uncompensated care costs, which amounted to about $86 million this year.

Admissions also jumped, and Erlanger restructured its pension and health benefit plans to stem costs.

Winick said the improvements "position the hospital very well with Wall Street" as it seeks to have bonds issued for the construction project he called crucial for Erlanger to remain strategic.

Craig Becker, president of the Tennessee Hospital Association, said that such an expansion can often be justified as a defensive move.

"You can almost flip the question on its side and ask, in such an environment, how can they afford not to [expand]?" said Becker. "They have likely done their homework about market share in this region. ...That infusion of the federal dollars really helped them out, and they've done a great job of bringing doctors back to the hospital."

If competition is a big motivator, Erlanger is facing plenty of it. Memorial Health Care System just completed its $85 million heart tower in June - part of a massive $318 million expansion project. And Parkridge Health System has also expanded in the last year, adding its Adult Services Campus and buying the former Grandview Medical Center in Jasper, Tenn. to extend its regional footprint.

The Erlanger East campus opened its new emergency department last year and Erlanger officials say it has served more than 22,000 area residents during its first year of operations.

Dr. Phillip E. Jackson, the newly named CEO of Erlanger East, said the aim is to provide "the right mix of necessary services for busy families who live in proximity to Tennessee's largest retail shopping area, the Chattanooga Volkswagen plant, and other major employers at Enterprise South."

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

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