Driven by Hutcheson Medical Center's $7.3 million loss in fiscal year 2009, members of the hospital's board will meet Monday and could decide between two Chattanooga-based nonprofit health systems seeking a partnership with the embattled medical facility.
Board members intend to conduct their meeting in a closed session, even if a vote is held, because they are considering proposals that are not yet public and that are of competitive advantage, Martha Attaway, chairwoman of the Hutcheson Medical Center Inc. board, said in a Thursday e-mail.
HUTCHESON FINANCIALS Fiscal year 2009: Loss of $7.3 millionFiscal year 2008: Loss of $467,517Fiscal year 2007: Profit of $766,766Fiscal year 2006: Loss of $1.4 millionSource: Hutcheson Medical Center
"The HMC board wants a chance to first announce a decision, if it is indeed finalized Monday, to the medical staff and to our employees," she wrote.
Battered by the recession and an exodus of doctors and specialists, Hutcheson is seeking a way to stay in business through a partnership with either Memorial Health Care System or Erlanger Health System in Chattanooga.
Hutcheson's financial picture is grim, but the extent of the difficulty was not clear until yesterday when the amount of the 2009 loss was first made available to the Chattanooga Times Free Press.
Last year's multimillion-dollar loss followed a $468,000 loss the previous fiscal year, according to Hutcheson's income statements.
Financial results for the fiscal year that ended in September are not yet available.
The 13-member Hutcheson Medical Center board oversees the daily operations of the hospital. The hospital building is owned by the Hospital Authority of Walker, Dade and Catoosa Counties and leased to Hutcheson Medical Center Inc., a private nonprofit company.
This month Erlanger and Memorial both pitched potential collaborative arrangements to Hutcheson board members, doctors, county commissioners and other stakeholders. On Tuesday hospital leaders, staff and other community stakeholders convened again to deliberate the proposals they had heard, Attaway said.
The multimillion-dollar loss comes just two years after the hospital seemed on the rebound and recorded its first profit in years in 2007.
But the impact of the economic downturn, rising uncompensated care and dwindling patient volumes prompted hospital leaders to consider collaborating with others to help draw more physicians and patients. In July, Community Hospital Consulting of Plano, Texas, was hired to evaluate Hutcheson's finances and the possibility of a partnership.
Bebe Heiskell, Walker County's sole commissioner, said local residents have expressed deep concern and even affection for the hospital, but often admit to seeking health care elsewhere.
"They want the hospital saved, but they don't go there" for treatment, she said. Resident cites a variety of reasons, including a negative perception of the hospital and the loss of doctors who practice there, she said.
"If they wanted to be admitted but if their doctor no longer practices there, they can't do that," she said. "I don't know what came first, the chicken or the egg, but we've got problems there."
COMPETING PROPOSALS
Officials at Erlanger and Memorial hospitals declined to comment on the pending proposals, citing a confidentiality agreement with Hutcheson.
Both proposals stipulated that the hospital partnering with Hutcheson would have a great deal of authority over Hutcheson's operations, at least until Hutcheson got back on stable ground, Heiskell said.
"They both would have a lot of say in how the hospital is operated. They would run it for a time," she said. "I'm not sure they [Hutcheson's management] want to turn over all their operations to the authority of somebody else, but it looks like that's what needs to be done."
Dr. Lori Emerson, a pathologist and medical director of Hutcheson's laboratory, said opinions are split among hospital staff.
"There's a lot of debate. It seems like generally both of them have their pros and cons. Memorial already has a lot of doctors in the area. The pro for Erlanger is that their missions are very similar [to Hutcheson], in terms of serving the indigent population," she said.
Erlanger is the safety net hospital in Chattanooga, and provided $74 million in uncompensated care in 2009.
Dr. David Hall, vice chairman of the Hutcheson Health Foundation board, said he's eager for the board's vote next week. He was part of the committee that heard the Memorial and Erlanger proposals this month.
"I was personally impressed by the presentations by both hospitals," he said. "I think we need to get on with on it and get something going."
Dade County Executive Ted Rumley said Hutcheson administrators aim to get whatever partnership is established up and running by Jan. 1.
"Memorial and Erlanger, they're really competitively the same," he said. "Both of them are bringing a lot to the board. ... They gotta move on with it. Something's gotta happen."
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