Erlanger's slip at Hutcheson

Erlanger's slip at Hutcheson

July 11th, 2011 in Opinion Times

Erlanger officials refused to disclose the price of a contract with a Texas-based consulting group for a study on staffing at Hutcheson Medical Center when they were asked about it by a reporter for this paper, Chris Carroll. A day later they relented and revealed the figure: $480,000.

Their reluctance to reveal the cost of the contract with Community Health Corp. suggests that Erlanger officials are embarrassed about the cost of a study for something they ought to have known prior to their agreement to manage Hutcheson; or, that they wanted to conceal the purpose of the study. Either way, Erlanger's weaseling makes the hospital's management look bad, and raises further doubts about the arrangement they have entered at Hutcheson.

Neither is reassuring. Just before Erlanger signed a management agreement and took control of Hutcheson, the Fort Oglethorpe hospital laid off 75 employees as a result of an earlier management plan conducted by Community Health Corp. Subsequently, Erlanger Health System failed to publicly disclose that it had signed a contract with the same consulting group to draft a personnel "action plan," at a cost of $40,000 a month for 12 months.

That omission followed other meetings between Hutcheson and Erlanger officials which were conducted without public notice and out of public view.

Erlanger, a quasi-governmental entity, is covered by the state's Sunshine Law. That requires the hospital authority to provide public notice of its meetings and to open them, and its records, to the public and the media.

Violations of the Sunshine Law can compromise the legality of acts and decisions taken outside the law. They also raise doubts about Erlanger's credibility. In the case of its acts with respect to Hutcheson, they raise further doubt about the efficacy and viability of its management contract with the North Georgia hospital.

Hutcheson was failing when Erlanger stepped in to save it. The hospital had recorded seven-figure losses for several consecutive months, and had cut its staff drastically. Erlanger officials have held out the hope that they will not significantly reduce staff further, and that their investment of up to $20 million in credit to the hospital will restore it to good health and allow it to continue providing service in North Georgia.

The apparent premise underlying the agreement is that Erlanger's expertise in managing its main campus and its satellite units is transferable to Hutcheson, and will enable it to make Hutcheson viable again.

But that's a risky proposition. Given intense competition from Memorial and Parkridge hospitals, Erlanger itself has had only narrow profits. It has also had to cut back severely at its Erlanger North unit in Red Bank.

If it is to revive Hutcheson, it will have to re-establish a patient base that has dwindled with the flow of doctors' practices away to the metro region's larger hospitals. But Erlanger itself has experienced a loss of doctors' practices in its ancillary buildings. And that's occurred alongside a disproportional rise in its own administrative overhead.

The applicable maxim is that hospitals don't have patients; doctors do. If Erlanger can't bring doctors to Hutcheson, and if its own bloated administrative staff needs expensive consultants to determine staffing at a small and declining hospital like Hutcheson, what, exactly, is the point of Erlanger attempting to manage Hutcheson, and inject $20 million there?