Hutcheson turns to community for help staving off foreclosure, staying open

photo Walker County, Ga., Commissioner Bebe Heiskell speaks to hospital employees Tuesday in the lobby of Hutcheson Medical Center.

What's next?• Erlanger seeks to foreclose on the hospital Nov. 4• Hutcheson leaders say they plan to file a motion today to delay the foreclosure until after the lawsuit can play out in court.• Meetings are set to offer information about current proceedings and receive public input.If you goPublic hearings on the future of Hutcheson Medical Center will be held tomorrow and next month.• Thursday: 6:30-7:30 p.m. At Catoosa County Civic Center auditorium. Erlanger-held hearing.• Nov. 11: 7-8 p.m., Catoosa County Civic Center auditorium. Hutcheson-held hearing.• Nov. 13: 7-8 p.m., Walker County Civic Center auditorium• Nov. 18: 7-8 p.m., Dade County Administrative Building

Erlanger-Hutcheson timeline• May 2011: Losing nearly $1 million a month, Hutcheson enters a management agreement with Erlanger Health System. Erlanger agrees to provide physicians, executive leadership, strategic planning and a $20.5 million line of credit.• June 2013: Hutcheson posts a profit and announces it will enter a leasing agreement with Erlanger for 10 years. But the agreement falls apart following a study of Hutcheson's financial viability and market share value.• Aug. 2013: Hutcheson severs the management agreement, claiming Erlanger did not hold up its end of the pact.• Sept. 2013: Hutcheson seeks other health care providers to take over management. Only Erlanger and Chattanooga company Lincoln Healthcare submit proposals, and Hutcheson accepts neither.• Dec. 2013: Walker County agrees to back a line of credit alone while Hutcheson crafts "austerity measures," including the suspension of labor and delivery services.Jan. 2014: Erlanger sues Hutcheson, demanding loan repayment of $25 million.Feb. 2014: Hutcheson counter-sues. Its attorney, former Georgia Gov. Roy Barnes, claims Erlanger did not hold up its end of the management agreement.July 2014: Erlanger moves to foreclose and auction the hospital's property.Aug. 2014: A federal judge in Rome, Ga., halts the planned foreclosure, saying that keeping the hospital open is in the public interest and he said overcoming an auction sale could be "insurmountable" for the hospital.Source: Times Free Press archives

FORT OGLETHORPE -- Hutcheson Medical Center has been at the heart of Stephanie Butcher's whole life.

She was born in the Fort Oglethorpe hospital. Straight out of nursing school 20 years ago, she went to work in the hospital's labor and delivery unit. At the hospital, she met the man who would become her husband - now a nurse in the emergency room.

Butcher gave birth to her three children at Hutcheson, including one son who was premature and treated in the hospital's NICU. And she credits Hutcheson doctors with saving her 6-year-old daughter's life when the girl had a violent allergic reaction to an ant bite two years ago.

That is why Butcher stood with dozens of fellow employees and community members in the hospital's lobby Tuesday.

Holding signs and wearing T-shirts that said "Save Lives, Save Jobs, Save Hutcheson," the group called for the North Georgia community to join the hospital's fight against looming foreclosure sought by its former partner, Erlanger Health System. The Chattanooga hospital seeks to recoup more than $20 million owed by Hutcheson.

"Our loved ones deserve readily available health care. Minutes matter," said Butcher, urging her colleagues to sign an online petition, speak at upcoming hearings and call Erlanger's board members.

More than 60 years ago, citizens in Walker, Catoosa and Dade counties were instrumental in Hutcheson's founding, approving a special tax to pay for the hospital's formation.

Now the "Save Hutcheson" initiative seeks to enlist community members to attend public hearings in the three counties scheduled for Thursday and next month.

"This has always been the people's hospital," said Hutcheson CEO Farrell Hayes. "It belongs to the three county governments. But we'll know more from the hearings, about how people feel about keeping the hospital open."

Erlanger seeks to foreclose on Hutcheson on Nov. 4 to collect on the loan it made three years ago when it took over management of the Fort Oglethorpe hospital.

Hutcheson terminated the management agreement last year, but has yet to repay any of the loan. Erlanger spokeswoman Pat Charles said that Erlanger "has never 'sought to close a small community hospital,' as Hutcheson's current CEO alleges," but is following the process outlined in legal documents to recover the $20 million debt.

"Erlanger has strong ties to North Georgia and has made it extremely clear it remains committed to meeting its longstanding and continued support of the health-care needs of North Georgia," said Charles.

She said Erlanger has "taken the high road" in its dealings with Hutcheson, and that the hospital and counties were given multiple opportunities to avoid foreclosure. Hundreds of Erlanger employees live in North Georgia, she said, and those in the Erlanger community "would expect nothing less than recovery of this loan."

LEGAL BATTLES

Under the management agreement, Erlanger loaned $20.5 million to Hutcheson in 2011 and 2012 to help the hospital pay its employees and bills. The loan was secured by the property on Hutcheson's main campus and further guaranteed by Walker and Catoosa counties.

Since the partnership fell apart last year, each side has accused the other of failing to keep its side of the deal. Erlanger sued Hutcheson in federal court this year, demanding repayment of the $20 million.

Hutcheson counter-sued in February, claiming Erlanger mismanaged the hospital, failed to attract the physicians and patients it promised and tried to damage Hutcheson to generate more business for Erlanger.

Erlanger's initial attempt to foreclose in August was temporarily blocked by a federal judge who said that keeping Hutcheson open is in the public interest.

But Erlanger renewed its foreclosure efforts, planning to auction off Hutcheson's properties in Catoosa and Walker counties on Nov. 4.

Hayes said Hutcheson attorneys are filing a motion in federal court to delay the foreclosure until after the lawsuit that Erlanger filed in January can play out in court.

Hutcheson officials say their hospital is a critical community asset, serving 87,000 patients per year and providing more than 800 jobs in the tri-state region.

Walker County Commissioner Bebe Heiskell called the entire situation a "tragedy" and said that Hutcheson's closure would "reap a devastating impact" on the area's economy.

"I don't think this is a fair thing," she said of the foreclosure. "This is not what I signed when I signed an agreement."

Although Hutcheson is more than $60 million in debt, hospital leaders point to signs of recovery, including an operating profit and growth in inpatient volume.

The hospital recently announced plans to reopen its women's center and resume labor and delivery services after suspending them last year.

"If we focus on our problems, we may get paralyzed," said Hayes. "We've got a job to do. We'd like to have our day in court, but we're trying to focus on taking care of the patients."

Dr. Tim Ashburn, the ICU director, mentioned how the hospital recently saved a 43-year-old woman whose collapsed lung had cut off her blood supply.

"What I hear over and over from patients," said Ashburn, "is that they want access to affordable, quality health care without having to leave their community, their county and their state."

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

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