New CEO has big plans for T.C. Thompson Children's Hospital at Erlanger

New CEO has big plans for T.C. Thompson Children's Hospital at Erlanger

July 21st, 2013 by Kate Harrison Belz in Local Regional News

Erlanger Health System CEO Kevin Spiegel has ambitious plans for upgrades, including a makeover for Children's Hospital.

Photo by Staff File Photo/Times Free Press.

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T.C. THOMPSON CHILDREN'S AT A GLANCE

Founded: 1929; moved to Erlanger's campus in 1975.

Number of beds: 118

Services include: Emergency Department, Level III Neonatal Intensive Care Unit, Pediatric Intensive Care Unit, Tennessee Craniofacial Center, cardiovascular surgery, cancer and blood disorders, medical genetics, neurology, gastroenterology, nephrology, radiology, urology, pulmonology, psychology, surgery and outpatient surgery.

Sources: Erlanger Health System; National Association of Children's Hospitals and Related Institutions

HOSPITAL HISTORY

1929 -- A hospital for children opens in Chattanooga, after extensive campaigning spearheaded by former Chattanooga Mayor T.C. Thompson. It is a separate entity from Erlanger hospital, located on Glenwood Drive.

1949 -- T.C. Thompson's "Premature Unit" opens.

1975 -- The hospital moves to the downtown Baroness campus, with Neonatal Intensive Care Unit.

1976 -- New four-bed Pediatric Intensive Care Unit opens

2002 -- Erlanger completes a $5 million project to build a new front entrance and triple the size of the Emergency Department.

2010 -- Erlanger spends $2.1 million on renovations to surgical unit.

2013 -- Erlanger budgets $1.4 million for operating room expansion.

Sources: Erlanger Health System; Times Free Press archives

OTHER NEARBY CHILDREN'S HOSPITALS

TENNESSEE

* Johnson City: Niswonger Children's Hospital -- 69 beds

* Knoxville: East Tennessee Children's Hospital -- 152 beds

* Memphis: Le Bonheur Children's Hospital -- 255 beds

* Memphis: St. Jude Children's Research Center -- 78 beds

* Nashville: Monroe Carell Jr. Children's Hospital at Vanderbilt -- 271 beds

GEORGIA

* Atlanta: Children's Healthcare of Atlanta -- 529 beds

* Augusta: MCG Health, Children's Medical Center -- 154 beds

* Macon: The Children's Hospital at the Medical Center of Central Georgia -- 112 beds

* Savannah: Children's Hospital at Memorial University Center -- 100 beds

Source: National Association of Children's Hospitals and Related Institutions

T.C. Thompson Children's Hospital at Erlanger long has prided itself on its sophisticated facilities and physician specialists it says are more likely to be found in a city twice Chattanooga's size.

But Erlanger Health System CEO Kevin Spiegel said the 1970s-era facility is due for a major face-lift -- or full replacement. He hopes to see such a makeover within the coming decade.

"If it were to happen, we're years away," Spiegel said. "But we want to make people aware that this can happen in this community. ... We can build something where patients would rather come here than somewhere else. That's something we need to do in Chattanooga."

A new children's hospital is one of three expansions Spiegel said he'd like to see during his tenure. He also has his sights on creating a world-class cancer center and a neuroscience center.

But none of those dreams will become reality with Erlanger in its current financial state, he acknowledges. The hospital operated nearly $10 million in the red in the most recent fiscal year, and has had its bond rating downgraded over the past two years.

"The first priority all of us have at this point is regaining the financial health of Erlanger," Spiegel emphasized. "That's what this year is about. But at the same time we've got to be looking at the future."

T.C. Thompson Children's Hospital -- which was founded in 1929 -- already has cornered the market when it comes to specialized pediatric care in the tri-state region.

With designation as a comprehensive regional pediatric center, Children's has physicians in nearly every pediatric subspecialty. The hospital's Level III neonatal intensive care unit provides the region's most high-tech level of care for sick and premature infants.

Even so, Spiegel says the hospital has potential to become a "destination" hospital for parents -- and for physicians.

Competition has fueled a construction boom of children's hospitals in the last decade, a yearlong examination by Kaiser Family Foundation and McClatchy Company News has found.

Children's hospitals have spent $16 billion on expansions over the last 10 years, and project to spend billions more in the coming years, the report states.

Besides competition, dramatic shifts in treatments and technology also have been a driver for such major projects, said Amy Knight, chief operating officer of the Children's Hospital Association, an industry group.

"As with any hospital, technology and standards of care have changed," she said.

While the current Children's Hospital meets the needs of the community, Spiegel said the facility is "outdated."

"I don't know if I would say it's limiting us, but the industry and the technologies have advanced dramatically over the last 20 years ... the community really needs to embrace the future," he said. "That's only really going to happen with really big capital improvement."

In 2010, the hospital spent $2.1 million renovating its outpatient surgical unit. But at the time, officials said there was no more room to expand, and added that a new building likely would be needed by 2020.

CHANGING DEMANDS, GROWING COMPETITION

Erlanger faces little competition for its services from its local rivals, Memorial Health Care System and Parkridge Medical Center.

But in the world of children's hospitals, competition isn't just with a hospital in the next neighborhood or town. It's with hospitals 200 miles away -- or even further.

"You just have to look two hours in all directions from Chattanooga to see all the change that's been going on," Knight said. "Nashville has a hospital that is fairly new. Atlanta has invested in significant changes in the last five years. Le Bonheur in Memphis has gone through a lot of updating recently."

Le Bonheur, the system from which Spiegel came to Erlanger this spring, finished its 640,000-square-foot children's hospital in 2010.

In Knoxville, East Tennessee Children's Hospital has just announced a proposal for a $75 million expansion and renovation project.

There are a host of reasons why the landscape of children's hospitals has changed so dramatically in the last decade, Knight said.

First of all, children in these hospitals are typically much sicker than the kids in children's hospitals of another era.

Many children who are receiving inpatient treatment at hospitals wouldn't have been alive 30 years ago. Modern medicine has prolonged their lives. There are more children battling chronic, complex diseases, while more common illnesses like asthma are less likely to be treated in hospitals.

Along with more complex care, more complex family dynamics also come into play.

These days, families -- sometimes the whole family -- stay with their hospitalized children as much as possible, creating a preference for more spacious rooms.

More and more rooms in childrens' hospitals are designed to hide or camoflauge scary-looking medical equipment.

As technology has advanced, so have parents' expectations.

"Patients -- and their parents, in this case -- are more and more savvy about the kinds of facilities they're wanting and where their doctors are advising them," Knight said.

The quality of a facility also has become a leveraging tool for many hospitals as they try to angle for prestigious doctors during a time when many children's advocates worry about a shortage of pediatric specialists.

Those physicians are more likely to come to top-notch facilities with special amenities.

Knight cautioned that a nice facility doesn't always equate to better care.

"There are plenty of hospitals that don't have these 'cutting-edge' reputations that are still providing excellent and much-needed care," she said.

More recently, the momentum to expand has been checked by the uncertainties in the changing health care arena, with expected cuts to government programs that go to children's hospital reimbursements, the Kaiser report outlined.

In efforts to manage costs, hospitals also are trying to build children's facilities with greater longevity, Knight said.

Children's hospitals cost more per square foot for the same amount of care as a general hospital. More hospital executives are opting for more "flexible construction" that can be altered easily as decades pass.

Paying for such a development would depend on flexing some major fundraising muscle.

But children's hospitals have the advantage of better targets for philanthropy than general hospitals -- a fact not lost on Spiegel.

"Everybody gets involved in activity like this for children," Spiegel said. "We haven't really harnessed that energy like we potentially could."

Even after sufficient funds are obtained, getting plans under way will be a marathon.

A certificate of need justifying the reasons for a new facility would have to be approved by the state.

Formulating the design itself would be a long process. Decisions would have to be made about the relationship with the main hospital. Will the two be connected and share equipment? Or will the new building be free-standing? How will staffing work?

It's too early to know what those dyanmics will look like, Spiegel said.

While no plans currently are being drafted, discussions are in process. Next month, Spiegel is bringing in a former colleague he said is an expert on children's hospital construction to talk with hospital leaders and physicians about new hospital design and construction.

Meanwhile, the hospital is continuing renovations. The hospital recently completed an overhaul of its fourth floor, and in its capital budget for this fiscal year, Erlanger has budgeted $1.4 million to expand an operating room in Children's.

Contact staff writer Kate Harrison at kharrison@timesfreepress.com or 423-757-6673.