Hutcheson Medical Center to part ways with Erlanger

Hutcheson Medical Center to part ways with Erlanger

August 20th, 2013 by Tim Omarzu in Local Regional News

Hutcheson Medical Center

Photo by Doug Strickland/Times Free Press.

Hutcheson Medical Center plans to part ways with Chattanooga-based Erlanger Health System.

Officials from the board of directors at the Fort Oglethorpe hospital met for about four hours in closed session Monday night and announced this afternoon that Hutcheson is negotiating to end the agreement to have Erlanger manage the hospital. That agreement began in April 2011.

"The management agreement has not met the expectations of Hutcheson's board of directors or the leaders of Walker, Dade and Catoosa counties," Hutcheson Medical Center's board chairman Corky Jewell said in a news release. "A continuation of the agreement would not add value to the hospital."

On June 27, Erlanger signed a letter of intent to lease the hospital long term, but the proposed lease fell through.

Erlanger loaned Hutcheson $20 million that becomes due and payable immediately should Hutcheson terminate its agreement with Erlanger, according to Moody's Investors Service. The debt's repayment is guaranteed by Walker and Catoosa counties. Hutcheson Board of Directors spokeswoman Nathalie Strickland didn't immediately respond to a question this afternoon about when the debt would be repaid.

Chad Young, attorney for Catoosa County, said in the release, "Officials from all three counties are committed to financially supporting Hutcheson while the hospital seeks a different partner."

Hutcheson is expediting a request for proposals and will meet with interested parties in the next two weeks, the release states.

For complete details, see tomorrow's Chattanooga Times Free Press.