Lawmakers announce revamp of Erlanger board

Lawmakers announce revamp of Erlanger board

January 24th, 2013 by Staff Report in Local Regional News

Erlanger Hospital

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Hamilton County's state lawmakers will introduce legislation next week to revamp the board of Erlanger Health System, according to a release.

The release from House Majority Leader Gerald McCormick and Sen. Todd Gardenhire, both Chattanooga Republicans, said the bill "revises the governance structure of Erlanger Health System and the Chattanooga-Hamilton County Hospital Authority."

"Erlanger is one of our region's most valuable and critical assets. The size, scope, and mission of Erlanger and T.C. Thompson's Children's Hospital have grown in the last 37 years, and how the Authority is governed at the board level must also evolve," said Rep. McCormick.

"With now over $500 million in assets and $500 million in revenues, this is the next step in an ongoing process towards providing corporate oversight consistent with similar enterprises."

"These changes are necessary to equip Erlanger to more effectively compete in an intense and everchanging industry. This is certainly no reflection on the existing board, but recognition of marketplace realities given the corporate environment in which this public entity must operate."

According to the statement, the new Board of Trustees will consist of nine members reflective of our community: Seven voting members, plus one non-voting representative of academia, and one non-voting physician member with current or past staff privileges at Erlanger. Members will serve three-year terms and no member may serve more than three terms.

The board will be self-perpetuating similar to most corporations and nonprofit organizations. Upon the vacancy of any seat for any reason, the remaining board members will fill the vacancy by majority vote.

The legislation is being prepared and will be formally introduced when the General Assembly on Monday, the release stated.

The county's state lawmakers first talked about reforming Erlanger's governance structure during last year's session. The hospital's board of trustees had just forced out the third consecutive CEO, Jim Brexler, after the hospital drove away doctors and lost more than $6 million in five months.

After trustees began interviewing three CEO finalists, McCormick wrote them Dec. 19 asking them to slow-walk the decision because the delegation is crafting legislation amending Erlanger Health System's governance. Trustees held a secret meeting Dec. 27 and said they would stick to their original timetable, but search committee chairwoman said last week she had told McCormick the vote might be pushed up.

Hearing from some trustees that the CEO vote could come as soon as tonight, McCormick sent another letter, signed by all seven delegation members, warning trustees again not to make a hire that could end with a costly contract buyout if the hospital's governance changed.

The board of trustees is scheduled to meet at 6:30 p.m. today.

For complete coverage, see Friday's Times Free Press.