Hamilton County Commission mulls Erlanger contribution

Hamilton County Commission mulls Erlanger contribution

March 9th, 2014 by Louie Brogdon in Local Regional News

The Erlanger hospital campus is shown from South Crest Drive.

Photo by Angela Lewis/Times Free Press.

Chairman Fred Skillern

Photo by Dan Henry/Times Free Press.

POLL: Should the city and county give $5 million each to Erlanger?

Most Hamilton County commissioners say they will keep an open mind about upping the county's contribution to Erlanger Health System to $5 million - and two say they support the idea. But commissioners want to see a lot more information about how Erlanger would spend it and whether Chattanooga will kick in funds, too.

Last week, hospital officials decided to freeze paid-time-off accruals for 4,000 employees until July. The measure is expected to save the hospital $5.4 million in the last three months of its fiscal year.

To help shore up the health system's finances, Erlanger CEO Kevin Spiegel is asking County Mayor Jim Coppinger and Chattanooga Mayor Andy Berke to include $5 million each in their respective budgets for the hospital.

Both mayors have acknowledged the as-yet informal proposal, but neither has committed to pitching it to their legislative bodies.

"I'm going to go into budget hearings with an open mind, but there's only so much money we have coming in from Hamilton County taxpayers," said District 6 Commissioner Joe Graham, chairman of the commission's finance committee.

Graham said he anticipates the commission will continue giving Erlanger the $1.5 million appropriation it has for years, but any increase will take some vetting.

Commissioners haven't heard from the Board of Education, which takes about half the county's budget. And it's too early for them to know what the general government departments will need, Graham said.

"Without knowing the financial situation, I just can't make a decision," he said.

Those sentiments were echoed Thursday by Commissioners Marty Haynes, Larry Henry, Warren Mackey and Chester Bankston.

"The conversation is much too early to render an opinion, because we have had no input or contact with Erlanger as of late," Mackey said.

But District 5 Commissioner Greg Beck and District 8 Commissioner Tim Boyd say the county should pony up more for the struggling public hospital. Both said Chattanooga should provide funds, as well.

Erlanger had budgeted a multimillion-dollar loss this year, but it also faces about $14 million in federal and state cuts. And the hospital estimates it will spend $91 million in uncompensated care this year.

"I know Erlanger has a large indigent care bill out there that our contribution at this time doesn't come anywhere near helping," Beck said. "I would have no problem with a small increase in our contribution -- especially if the city is going to make a contribution, as well."

As far as how much he thinks county taxpayers should put up, Beck said, "$5 million would be a good start."

Boyd doesn't know anything about Spiegel's conversation with the mayors -- who are ultimately responsible for bringing such proposals to the commission or council -- but he would support increasing spending.

"It's important to understand that $1.5 million of contribution to that hospital pays for about a day of operation. So that's 1/365th of operations we are supplying," Boyd said. "As far as how important that hospital is to the region, I think that's shy of what our contribution should be."

Chairman Fred Skillern said he is recusing himself from any votes or discussions about Erlanger, citing a $3 million personal donation he and his wife made to Memorial Health Care System in December.

Commissioner Jim Fields did not return telephone calls late last week.

Commissioners killed a private act last year that would have restructured the hospital's governing board and tied the county's contribution to the consumer price index, a measurement of changes in retail prices of certain goods. They said then they would not increase the county's appropriation unless commissioners had a say over who sat on the hospital's board.

A new bill in the General Assembly would allow Erlanger's board, the politically appointed Chattanooga-Hamilton County Hospital Authority, to create an additional operating board, which would run the hospital as a 501(c)3. Commissioners would have no say in whether that bill passes.

Spiegel said the big plan is to get Erlanger linked to a funding mechanism called the Public Hospital Supplemental Payment Pool. The pool, which the Regional Medical Center in Memphis and Nashville General Hospital have used for four years, allows public hospitals to transfer money they receive from local government entities and have that money nearly tripled through a series of federal and state exchanges.

Spiegel said that with city and county appropriations of $5 million each, Erlanger could draw down $30 million in federal funds.

He has said it's unclear why Erlanger was not included in the pool when it was created in 2010.

Erlanger's waiver attempting to tap into that pool already has Gov. Bill Haslam's approval but is awaiting CMS approval.

Staff writer Kate Harrison contributed to this report.

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

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