CHI Memorial on Monday said it plans to take over management of Cornerstone Medical Center, formerly Hutcheson Medical Center, in Fort Oglethorpe.
The hospital on Gross Crescent, built in the 1950s with federal funding and contributions from local mill workers, is no stranger to upheaval in recent years.
In 2011, with Hutcheson hemorrhaging about $20 million a year, Erlanger Health System took over management. Erlanger provided administrators and a $20 million loan. But in August 2013, Hutcheson's board voted to kick out Erlanger. Then Hutcheson sought Chapter 11 bankruptcy protection in November 2014. Then the hospital shut down in December 2015.
Days later, in bankruptcy court, ValorBridge Partners bought the hospital for $4.2 million. A portfolio company of ValorBridge's, ApolloMD, had actually been running the emergency department at Hutcheson prior to the purchase. This would be the company's first attempt at running an entire hospital. They renamed the operation Cornerstone, in reference to the honor bestowed upon the mill workers who contributed to the hospital about 60 years earlier.
Now, the hospital will undergo another leadership change.
ValorBridge approached Memorial's leadership several months ago about taking over Cornerstone's management, according to Larry Schumacher, CHI Memorial's CEO.
"It seemed like a natural fit for us to be involved with this and to hopefully help bring back the level of service and the level of clinical care that is needed in this area," Schumacher said.
In 2011, former Hutcheson CEO Charles Stewart said, Memorial approached him about managing Hutcheson. But Hutcheson's board ultimately voted to go with Erlanger at the time, in part because Erlanger committed to loaning Hutcheson $20 million.
Since the Hutcheson-Erlanger management agreement, Memorial continued to build a presence in North Georgia and boasted primary care clinics in LaFayette, Chickamauga, Trenton and Ringgold.
Now that presence reaches back into Cornerstone's halls, where on Monday, Memorial took over day-to-day operations and employees received the news.
"Memorial is a respected brand in that market," said Lisa McCluskey, vice president of marketing for CHI Memorial Health Care System. "They see it as a sign of stability and opportunity for the future."
Schumacher said time will tell exactly what services the facility will offer, but it's possible it will expand beyond Cornerstone's emergency, laboratory, radiology and pharmacy services.
"I think there are a lot of needs to be really addressed and we need to determine how to deliver the best care," he said, adding that ambulatory, emergency care, hospitalization, some surgery, cancer treatment, diagnostics and pediatrics are some services needed in the area.
"The ability to provide health care in rural areas is going to continue to be challenging in the foreseeable future but for many communities hospitals are a primary need," Schumacher said.
The new agreement with Memorial comes less than a month after the U.S. Court of Appeals ruled that Walker County's local government still owes Erlanger Health System $8.7 million, a holdover from that 2011 management agreement. But Schumacher said he believes Memorial has the right skills and management to overcome the challenges former teams faced.
"We figure it out. We work through it," he said. "We figure out how to serve the community in the best way we can."
Cornerstone and Erlanger did not have statements prepared as of press time.
Contact staff writer Elizabeth Fite at efite@timesfreepress.com or 423-757-6673.