Chattanooga's Erlanger Health System facing bleak quarter

Chattanooga's Erlanger Health System facing bleak quarter

January 24th, 2012 by Mariann Martin in News

This is a part of the Erlanger campus as shown near downtown Chattanooga on Wednesday.

Photo by Tracey Trumbull/Times Free Press.

Erlanger Health System will likely continue to lose money for the next three months, as the public hospital's leaders work to bring down costs and increase their surgeries, hospital executives said Monday evening during a Budget and Finance Committee meeting.

The hospital lost $3.9 million in December, bringing the total losses for the fiscal year to $10.3 million. The hospital is cutting costs and improving revenues but it will take some time for finances to improve, hospital leaders assured the committee.

"We continue to have some challenges -- the docs are not returning as quickly as we would like them to," interim CEO Charlesetta Woodard-Thompson told the committee. "You won't see things settling out until April."

After former CEO Jim Brexler left at the end of the year, hospital leaders implemented a labor management plan that included asking certain employees to take some time off before March and accept voluntary buyouts, among other changes.

The goal was to reduce costs to address the revenue issue, stabilize the hospital and then focus on growth, Woodard-Thompson said.

Charlesetta Woodard-Thompson and Britt Tabor listen to discussion about the severance package for former Erlanger Health System president Jim Brexler in this file photo.

Photo by Doug Strickland/Times Free Press.

Last week, the hospital announced it had cut six executive positions, going from 15 positions to nine. Erlanger has not provided information on whether those vice presidents have been terminated or given other positions at the hospital.

Monday evening, Chief Administrative Officer Gregg Gentry said eliminating those positions will save the hospital up to $1.6 million a year.

The next step in the labor management plan is look at manager level positions and then staff positions, he said.

"We are using a voluntary separation process to the best of our ability, but it could lead to an involuntary process," Gentry said.

The December financial report shows costs such as labor, drugs and other supplies are at budget, but have not decreased to account for the drops in revenue, Britt Tabor, Erlanger's chief financial officer told the committee.

Surgical numbers, which are the primary source of revenue for the hospital, continued their decline in December, the financial report shows.

Inpatient surgeries were at their lowest level since January 2011, and make up only about 28 percent of the hospital's patients, Tabor said.

The state average for surgical patients is 36 to 38 percent, and some other local hospitals achieve numbers as high as 46 percent, he said.

Tabor called those numbers "extremely painful."

"I'd rather skip January, February and March," Tabor said after delivering his report. "Things are in place to get things moving, however from an improvement standpoint, the next couple of months we will continue to see negative results. But our goal is to start the fourth quarter of this year on a very strong note."

Contact staff writer Mariann Martin at mmartin@timesfreepress.com or 706-980-5824.