Chattanooga: Erlanger Health System plans rate increase

Chattanooga: Erlanger Health System plans rate increase

June 21st, 2011 by Chris Carroll in News

Erlanger Hospital

Moments after Erlanger Health System approved a 5 percent increase on bills to select patients, the hospital announced a seven-figure monthly loss.

None of the hospital trustees present at Monday's Budget and Finance Committee meeting commented on the increase.

The hospital lost $1.2 million in May, records show.

A budget expected to be passed by Erlanger's full board of trustees on Thursday states that "charge rates shall be adjusted not to exceed an aggregate amount of 5 percent increase."

Erlanger spokeswoman Pat Charles said the hike "has very little impact on revenue" and is unlikely to affect area residents who have locally based insurance and prenegotiated fees.

"As a trauma center located off I-75, we do get a number of patients (e.g. from motor vehicle accidents) who are out of network, so these type charges would largely impact those individuals," Charles wrote in an email.

Hospital officials blamed May's hard times on a low birth rate at Erlanger, along with orientation and training expenses for freshly graduated registered nurses and other medical personnel.

"There aren't as many babies being born right now," Erlanger President and CEO Jim Brexler said at Monday's meeting. "And this is hire season."

In April, Chief Financial Officer Britt Tabor attributed that month's $800,000 loss to more medical visits than surgeries, which bring in more money. Medical visits also outnumbered surgeries the last time Erlanger reported a profit - $1 million - in March.

For the present fiscal year, which concludes at the end of June, Erlanger is up $400,000 in profits, but the budget originally called for a $14.5 million profit.

The numbers come during something of a financial maelstrom for Erlanger. Hospital officials are fighting to get the usual $3 million in annual public funding for indigent care from either Hamilton County or Chattanooga, despite handing out $1.9 million in executive bonuses last fiscal year.

Historically, the $3 million has come from a sales tax agreement that spelled out how the county and the city broke down financial responsibilities for agencies jointly funded by the pair, including Erlanger. But the Chattanooga City Council voted to let the 45-year-old agreement lapse in May.

County officials have allocated $1.5 million for Erlanger but haven't promised any more and have told Erlanger officials that the city must make up the difference.

Last week, Chattanooga City Council Chairwoman Pam Ladd said funding is "pretty much off the table" for Erlanger.

In other business, Children's Hospital Medical Director Dr. Alan Kohrt urged the board to consider a $1.3 million project authorizing the renovation of patient rooms and support areas.

Erlanger Board Chairman Dan Quarles pushed for "publicity" surrounding the fundraising effort - the hospital must raise $872,094 to match $500,000 in already-budgeted capital funds - and Kohrt urged "a major event."

Contact Chris Carroll at or 423-757-6610.