Catoosa wants equal seats on Hospital Authority

Catoosa wants equal seats on Hospital Authority

March 7th, 2012 by Mike O'Neal in Local Regional News

Losses continue to mount, but Hutcheson Health System board members say the Fort Oglethorpe-based hospital's fortunes are surely - but slowly - changing.

Something else that might change, and more quickly, is the structure of the hospital's board and the manner in which its directors are chosen.

The financial report given during last Wednesday's board meeting showed losses for January, though high, were less than projected in the annual budget.

The hospital lost about $983,000 during the month; nearly $120,000 more than the same month one year ago, but hospital officials said that is not as bad as it seems at first glance. During January 2011, nearly twice as many surgeries were performed and the hospital had nearly twice as many patients and still lost about $860,000.

And while revenue lags, over the past four months Hutcheson has steadily trimmed expenditures even as it adds staff and services.

One area that is showing gains is the observation rate, according to newly installed CEO and President Roger Forgey.

"That is a good sign," he said. "Observations leads to admission."

Years of accumulating losses led Hutcheson last year to either close, seek a financial bailout or partner with another health care facility. On May 26, 2011, Hutcheson entered a management agreement with Chattanooga-based Erlanger hospital that included a guaranteed $20 million line of credit and changing its name to become Erlanger at Hutcheson.

The hospital has used more than $7 million of that credit, money which is backed by the three counties - Catoosa, Dade and Walker - that jointly own the hospital's buildings and property.

Catoosa and Walker each pledged $10 million as collateral for Erlanger's loan, and that is why Catoosa County's Board of Commissioners is asking the state to change the rules regarding the Hutcheson Hospital Authority board.

The Catoosa County Commission held a called meeting last Friday with the sole purpose of gaining equal representation on the Hutcheson board of directors.

"During negotiations with Erlanger, this was raised as a likelihood," County Attorney Skip Patty told the commissioners after presenting proposals to change the makeup of the Hospital Authority board.

At present, the counties have differing numbers of trustees. Walker has four voting members, Catoosa has three and Dade has two.

"The present method was fine when $10 million wasn't on the line," Patty said. "This board of commissioners has a $10 million stake and should have direct control of who represents the county."

The resolution passed by the commissioners calls on the state's General Assembly to amend the number of trustees. The proposal calls for Walker and Catoosa to each have five members and Dade to have three members on the board.

The local act that created the Hospital Authority (adopted in 1947 by Walker and Dade and in 1951 by Catoosa) and determined how many trustees would serve was unchanged for years.

About 17 years ago the Authority, which owns the grounds and facilities, created two nonprofits, Hutcheson Medical Center Inc. and its parent company, Hutcheson Health Enterprises Inc.

HMC Inc. leased the buildings and assumed day-to-day operations of the hospital. In return, HMC agreed to provide care to all, whether affluent or indigent or somewhere in between.

Catoosa Commission Chairman Keith Greene said there had been some talk about the makeup of the hospital board, but it was not an issue as long as the lease arrangement was in place.

But when Hutcheson began hemorrhaging cash and Erlanger was called on to staunch the flow of red ink by providing new management and a new source of funding, things changed.

"It didn't really matter until we had money in the game," Greene said.

He and his fellow commissioners agree that for an equal investment in the hospital's future Catoosa should have equal representation.

A second factor is that when the hospital opened its doors in 1951 there was a sizable population difference among the three counties which was reflected in the Hospital Authority's makeup.

Things have changed over the years, and Walker and Catoosa have nearly the same number of residents according to Census 2010.

Greene said that, again, parity in population should mean parity in representation.

A second resolution adopted by the commission would give each county control over its representatives on the Hospital Authority board. At present, the board can refuse any nominee. The proposed amendment would allow each county's governing body to select whomever it chooses to serve on the Hospital Authority board, with that nominee to be appointed during the Authority's next regular meeting.

Both resolutions were signed Friday and transmitted to the local delegation for consideration during this session of the Georgia General Assembly.