Erlanger at Hutcheson serving more, losing less

Erlanger at Hutcheson serving more, losing less

July 5th, 2012 by Mike O'Neal in Local Regional News

Administrators of Erlanger at Hutcheson see a glimmer of light at the end of the tunnel in their quest to restore the hospital's financial health.

The financial report for May 2012, given during last week's meeting of the hospital boards, was the best in two years, according to Chief Financial Officer Farrell Hayes.

Crews recently installed Erlanger at Hutcheson signs at the hospital's campus in Fort Oglethorpe.

Photo by Mike O'Neal

"This was our best month since May 2010," he said.

Though the hospital lost $481,000 this May, it was vastly better than the $1.3 million it was budgeted to lose and far less than the several millions lost since the first of the year. It was also half what the hospital lost during the same month in the previous year.

"We want to be back in the black," Hayes said. "We aren't, but we are trending that way."

Strapped for cash, patients and doctors, Hutcheson Medical Center was in default on a $35.5 million bond issued in 2007, losing about $1 million a month and in danger of closing when it entered into a management agreement with Erlanger Health System last year.

The area's two public hospitals, Chattanooga-based Erlanger and Fort Oglethorpe-based Hutcheson, effectively became partners May 26, 2011. In addition to lending its name, Erlanger agreed to provide a line of credit - as much as $20 million - to help Hutcheson through a time of regeneration.

The turnaround process was not expected to happen overnight. The best case scenario was to have the hospital break even sometime in the fall, but recent reversals prompted the board to expect a return to profitability not occurring until early in 2013.

That is why the report for May, with its less-than-expected loss, was such a pleasant surprise and an affirmation of the hospital's financial recuperation.

"Every individual who works at our facilities has contributed to the improvement of Hutcheson's bottom line, and it is encouraging to see our efforts pay off," President and CEO Roger Forgey said when the finance committee report was presented.

Forgey and Hayes point to rising patient volumes, particularly outpatient and emergeny room visits, improved payment rates and lower staffing costs as being key to May's losses being half what they were for the same month one year ago.

"We know there is significant work ahead to secure the hospital's long-term viability, but it is evident we are heading in a positive direction," Forgey said.