Push to overhaul Erlanger Health System's governing board revived by lawmakers

Push to overhaul Erlanger Health System's governing board revived by lawmakers

December 12th, 2013 by Louie Brogdon in Local Regional News

The Erlanger Baroness campus.

Photo by Staff File Photo /Times Free Press.

Here we go again.

Tennessee lawmakers are drafting new legislation that would restructure the governing board of Erlanger Health System. This time around, they may have the support of Hamilton County commissioners -- but they might not need it.

State legislators early this year tried to shrink and streamline the Erlanger board with a private act that required approval from county commissioners, but that effort died in March for lack of support from commissioners. None would make a motion to bring it for a vote -- or even discussion.

But Hamilton County Mayor Jim Coppinger says restructuring still needs to happen.

He told county and state officials during a legislative breakfast Wednesday that his office supports a move to make the Chattanooga-Hamilton County Hospital Authority a nonprofit corporation during the next legislative session, which starts Jan. 14. The move would help Erlanger and the community, he said.

"It is the only genuine public hospital ... that provides a number of services other public hospitals don't," Coppinger said. "Other public hospitals just do triage and send [patients] off. What can help Erlanger is for it to become a 501(c)3 nonprofit."

Commissioners in March didn't like a stipulation that would have committed the county to paying $1.5 million to the hospital and tying future obligations to that base amount adjusted by the Consumer Price Index, a measurement of changes in retail prices in a variety of goods. They also balked at not being able to appoint some of the first members of a proposed self-perpetuating board and said they had been left out of the loop.

The beleaguered public hospital ran a $9.5 million deficit in fiscal year 2012 and $7.9 million in the last fiscal year.

Gerald McCormick

Gerald McCormick

Photo by Contributed Photo /Times Free Press.

Rep. Gerald McCormick, R-Chattanooga, part of the delegation drafting the bill, said legislators have been working with Erlanger and Coppinger to come up with the best solution for the hospital, the county government and the area.

But the county's obligation to the public hospital has not yet been determined. It's also not yet clear whether the bill will need the county commission to survive. It could hit the floor as a private act, which would need the commission's support, or as a state law.

"We could do it with a private act or general law. We haven't decided yet how that will go," McCormick said.

The move is in line with what Erlanger's leadership requested after the previous restructuring effort failed.

Erlanger CEO Kevin Spiegel says the new legislation would modernize Erlanger and bring it up to speed with other major public hospitals.

"[Erlanger is] burdened by a lot of regulations that normal hospitals are not. That's actually costly, and our behavior is costly," Spiegel said.

Those burdens include financial posting requirements and bidding and purchasing rules that government agencies have to follow, he said.

"We have lots of staff who are just devoted to governmental work and we aren't compensated for that," he said. "Our focus is enhancing patient care by providing more staff to take care of the patients as opposed to back-room administrative positions that don't really improve patient care."

County Commission Chairman Fred Skillern says he supports the hospital becoming a nonprofit organization, but he still opposes a perpetuating board and expects the commission is going to look out for Hamilton County taxpayers.

"I just want some assurances for what Hamilton County taxpayers are contributing. If you have a self- perpetuating board, who can the people come to?" Skillern said. "I've never been a fan of self-perpetuating boards where taxpayers are involved with money."

The county now provides $1.5 million per year to Erlanger for indigent care and for care for county inmates. But Spiegel said Wednesday the hospital provided $86 million worth of uncompensated care last year alone.

"We are the second-largest provider of uncompensated care in the state, next to the MED [Regional Medical Center at Memphis]," he said.

The MED is a nonprofit organization -- and a model for what Erlanger hopes to do, Spiegel said. But the MED receives $26.8 million from Shelby County.

Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com or at 423-757-6481.